Eskom endorses private power producers

South Africa’s Eskom Holdings SOC Ltd. is scrutinising contracts to buy power from a government program for private developers to quickly bring on board additional generation.

The state-owned utility started scheduled power cuts for the first time in almost a month on Monday, cutting 2,000 megawatts from the grid.

That was due to breakdowns that affected a range of units, including at one of its newest stations, and as heavy rains complicated pumped-storage capacity, Eskom Chief Executive Officer Andre de Ruyter said Tuesday in a briefing.

It’s had to reduce the amount of long-needed maintenance on core coal-fired stations in order to keep more capacity running.

Eskom has called for as much as 6,000 megawatts of additional generation to stabilise supply, and the government has rolled out programs to add renewables and capacity that could be connected to the grid as soon as possible.

But the processes have been stalled by delays that include legal suits.

Some solar projects may also have difficulty reaching financial close due to rising supply chain costs, people familiar with the information said last month.

The utility is “carefully scrutinising documents” related to the emergency power plan, also known as the risk-mitigation programme, because it has a duty of care to avoid financial hardship, De Ruyter said, declining to provide more detail.

Eskom is “making good progress” and could see that generation online by next year or 2024, though it’s difficult to assess when the contracts will be concluded, he said.

Eskom is taking other measures to add capacity, including issuing a request for proposals to lease parcels of land for a minimum of 20 years for quickly built renewable projects of up to 100 megawatts, according to a company statement.

Investors will have “accelerated access” to the grid through the program that will see clean energy projects built near coal plants, De Ruyter said.

South Africa last week opened a round to add 2,600 megawatts of renewable energy projects, the so-called sixth bid window, with submissions due on 11 August.

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