20-year power purchase agreement postponed – Eskom

Agreement would have seen power utility buy 100MW for estimated R50 billion

A 20-year power purchase agreement with Redstone Solar Thermal Power postponed until further notice

28 July 2016

A 20-year power purchase agreement that Eskom was supposed to have signed with Redstone Solar Thermal Power Project today has been postponed until further notice.

The postponement is purely on conditions precedent not being met.

The agreement would have seen Eskom buy 100MW from the project for an estimated R50 billion for the duration of the contract.

The Department of Energy launched the Renewable Energy Independent Power Producer Procurement Programme (RE-IPPP) in 2011, which called for 3 725MW of renewable energy technologies. Capacity under existing signed agreements is expected to be in commercial operation by the end of 2018. Eskom concluded power purchase agreements (PPAs) with successful bidders. We have received assurance from the National Energy Regulator of South Africa (Nersa) that these PPAs costs will be treated as a pass-through for revenue regulation purposes, and will be recovered through the regulatory clearing account (RCA) process.

To date, we have contracted for 3 901MW of renewable IPP capacity, of which 2 145MW has been connected to the grid.

We expect 1 030MW from the RE-IPPP Programme to be commissioned during 2016/17, including 504MW wind, 510MW solar PV, 4MW hydro and 11MW landfill. Under the DoE gas peaker programme, the 670MW from Avon came into commercial operation last week.

Furthermore, the contracts awarded under bid windows 3.5, 4 and 4.5 are expected to be concluded during the 2016/17 financial year.

Issued by Eskom Media Desk, 28 July 2016