South Africa could dispose of some of Eskom Holdings SOC Ltd\u2019s coal-fired plants and allow households to sell electricity back into the grid as part of a restructuring of the state-owned power utility.<\/p>\n
The stations could be sold through a series of auctions and would include related staff contracts, coal-supply contracts and environmental obligations, according to an economic policy paper the National Treasury released for public comment on Tuesday. The plan could raise R450 billion ($29 billion), the Treasury said, citing an independent study.<\/p>\n
The disposal of coal plants would be tied to a power-purchase agreement at a pre-defined, station-specific tariff, according to the paper.<\/p>\n
Details of the proposal give another glimpse of the many options being considered to get Eskom back onto a sustainable footing and start reversing the damage the indebted company\u2019s finances have brought onto the economy and the nation\u2019s budget.<\/p>\n
President Cyril Ramaphosa said in February Eskom would be split into transmission, generation and distribution businesses. The utility told senior managers last week that will take long as three to five years.<\/p>\n
Selling plants may be opposed by labor groups, including the National Union of Mineworkers, that see privatization as resulting in job losses.<\/p>\n
\u201cOur thinking as the NUM is that the selling of power stations or whatever will not help Eskom,\u201d Paris Mashego, the union\u2019s energy coordinator, said by phone. Selling the plants to private investors also wouldn\u2019t solve the issue of emissions that it\u2019s trying to reduce, he said.
\nSolar Panels<\/p>\n
The move to allow non-state entities to become power producers would signal a new commitment for investment in the sector. The pace of private renewable projects stalled after the government signaled a preference for nuclear energy, but deals were signed last year and the Department of Energy has said more would be welcome.<\/p>\n
\u201cEskom\u2019s unwillingness to sign independent power-purchase agreements with bidders in the past\u201d has undermined investor confidence, the Treasury said. Enabling the independence of the single buyer\u2019s office \u201cwill ensure the sustainability of independent power producers,\u201d it said.<\/p>\n
The option was also proposed on a smaller scale. The government would avoid large capital spend on power infrastructure if the system would allow households and business to sell excess electricity generated through solar panels back into the grid, Treasury said.<\/p>\n
The government is giving Eskom a 128 billion-rand bailout over the next three years to keep it afloat and has appointed a chief restructuring officer to oversee the unbundling of the company, which doesn\u2019t have a permanent chief executive officer yet.<\/p>\n
\u201cWhile Eskom\u2019s pressing short-term operational challenges have abated somewhat, another crisis is on the horizon,\u201d the Treasury said.<\/p>\n