- Eskom will secure 1000MW of electricity from providers who generate more than 1MW.
- The programme will be opened up to smaller producers over time.
- The programmes include plans to purchase power from other African nations which have additional capacity.
To address the consistent threat of loadshedding, Eskom is turning to other businesses for an assist.
On Monday the utility announced three power procurement programmes with a view to purchasing 1 000MW of capacity from power producers. Bizarrely, however, Eskom has made the decision to limit this programme to providers who have more than one megawatt to contribute to the national grid.
The utility has said it will lower this threshold “over time”.
Eskom launches power purchase programme to secure 1 000MW to bolster constrained generation capacity pic.twitter.com/sFrLnaSDJp
— Eskom Hld SOC Ltd (@Eskom_SA) September 19, 2022
“The limitation is purely logistical at this stage. As indicated in the press release it is intended to lower the threshold over time as systems and resources are allocated to the procurement from numerous small scale embedded generators,” senior manager market operator at Eskom, Keith Bowen told Hypertext via email.
This does make sense as suddenly being flooded with applications from hundreds of sub-1MW power producers would likely only cause more delays, and there is clearly no time left to delay.
The three programmes Eskom announced are as follows.
The Standard Offer Programme
Here, Eskom will procure power from companies which have existing capacity for a period of three years. The offer allows Eskom to purchase electricity at the avoided cost of its own generation. Each year a static price based on regulatory approval and the variable cost of generation will be set.
“It also allows for a dynamic price option where the price is set day-ahead for each hour of the following day, indicating the avoided cost of generation based on internal scheduling of generators,” Eskom explained.
The Emergency Generator Programme
This will see Eskom procuring more expensive power during periods where the grid is significantly constrained. Independent providers will provide power to Eskom and will be selected based on the offer price and the capacity on offer.
The Bilateral Power Import Programme
The utility will secure imports of electricity from neighbouring countries. To be clear, Eskom is already using 200MW from the Southern Africa Power Pool, this goes further than that.
“Several countries have expressed an interest in selling additional surplus power to South Africa. The programme will provide a mechanism to access such opportunities,” the utility said.
How quickly does Eskom want to get these plans off of the ground? This week according to a media statement.
“The aim is to sign the first power supply agreement during the course of the current week, and for the power to start flowing through the grid as soon as possible,” Eskom said.
South Africans have reacted to this news with cynicism and we aren’t surprised. Among the many concerns raised is one that Eskom will announce in a year that it has been paying for power it never received.
We don’t want to count our chickens before we hatch, but we hope that there is sufficient oversight at Eskom regarding this programme. The utility has been bled dry over the years and South Africa simply can’t afford for this to happen again.
