Eskom wants to open the taps for private producers and other countries

 ·26 Mar 2024

Minister of Electricity Kgosientsho Ramokgopa says that Eskom is looking to increase the amount of power it can procure from private generators and neighbouring countries – quadrupling the current limit from 1,000MW to 4,000MW in hopes of easing rolling power cuts in the country.

“There are an extraordinary amount of players who are coming on stream and saying that we can contribute to the resolution of this [electricity] crisis,” said Ramokgopa at a media briefing on Monday (25 March).

Eskom has been implementing various strategies for procuring more power – one of which has been the Standard Offer Programme announced back in 2022.

This programme buys excess power from existing Independent Power Producers (IPPs), large industrial companies and neighbouring countries at a fixed cost.

“It also allows for a predictable tariff, which is adjusted each year based on the regulatory-approved cost recovery mechanism and covers the variable cost of local generation,” said Eskom.

Explaining the programme, Ramokgopa said that “essentially it is [Eskom] going out to the market, both domestically and internationally, to say those who have got excess generating capacity, please make it available to us [at a predetermined tariff].”

Since Eskom started this procurement initiative, it has had a ceiling of 1,000MW, which could and was planned to run for three years (however, the minister consistently refers to two).

Ramokgopa said that this was then “oversubscribed” to 1,130 MW.

Thus, a proposal to increase the ceiling to 4000MW and remove the two-year timeframe has been taken to Eskom’s board for approval.

Read: South Africa enters high alert for winter load shedding

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