Eskom: There is such a thing as too much renewables

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Eskom Generation's pilot wind-farm facility at Klipheuwel in the Western Cape, South Africa. Source: Flickr/Warren Rohner

The battle between South Africa’s utility Eskom and renewable independent power producers (IPPs) continues with legal confirmation that IPPs can force Eskom’s hand to force it to sign the power purchase agreements (PPAs) under the government’s procurement programme.

A legal opinion was sought by the South African Renewable Energy Council (Sarec) on behalf of 37 IPPs who are awaiting PPA contracts. David Unterhalter, senior advocate at the Johannesburg-headquartered firm Webber Wentzel issued a legal opinon letter which confirmed that preferred bidders are entitled to take Eskom to court to enforce a signature for the outstanding PPAs.

Eskom originally told PV Tech in August that the reason for the delay was due to an overcapacity of renewables that were causing strain on the country’s grid. Sarec's council chairperson Brenda Martin also argued that Eskom was resisting due to the price of renewable energy resources.

“It is not clear to us why [Eskom] chose that moment to decide that renewable is too expensive,” she said in a statement. “It would seem to us that when you make an early investment that you will realise the benefit of that investment in time that that logic and flow of process would be understood by everyone.”

Indeed, former Eskom CEO Brian Molefe and his successor acting CEO Matshela Koko have both expressed opinions that he tariffs under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) are high; subsequently causing increases in electricity tariffs.

Eskom for its part told PV Tech that contrary to reports that it is refusing to sign PPAs, it has signed with more than 60 companies.

“As far as renewable IPPs are concerned, many people have been misleading everyone, saying that Eskom is refusing to sign these IPPs. What they are conveniently not saying is that currently Eskom has signed over 60 companies, and is getting just over 3,000MW on a regular basis from these companies,” said Eskom spokesperson Khulu Phasiwe.

Phasiwe also emphasised that part of the delay was due to an oversupply from its own generation, eliminating the need for renewables altogether:

“The irony is that we have our own capacity of 1,333MW and we are not even using half of that amount,” he said. “We are not refusing to sign contracts. We are protecting the company to make sure we avoid financial risks.

“Why should we be almost forced by some of these companies to buy something that is beyond what we can afford?”

Phasiwe cited a R63 billion (US$ 4.6 billion) deal for 100MW of CSP over 20 years that Eskom denied signing. “We as a company, we have the right to start asking questions about some of these projects. We were saying to them, how is it possible that we are going to spend R63 billion on 100MW which is not guaranteed? And it’s a solar project. So when the sun is not shining, we are not going to get that electricity.”

Read Next

PV Tech Premium
June 12, 2021
With South Africa faced with ongoing power cuts, Jules Scully explores the how solar PV can help decarbonise the country’s coal-heavy grid while providing energy security.
June 11, 2021
South Africa’s solar sector has welcomed a new reform that will increase the country’s licensing exemption threshold for embedded generation projects from 1MW to 100MW.
June 8, 2021
Solar PV and wind will continue to be the cheapest sources of new electricity generation capacity in Australia, even when integration costs are included, according to new research from the country’s science agency, CSIRO, and the Australian Energy Market Operator.
June 2, 2021
Scatec will develop three projects in South Africa totalling 540MW of solar and 225MW / 1,140MWh of battery storage after being awarded preferred bidder status through a government tender.
June 1, 2021
Almost two thirds of people working in the solar industry expect to see double-digit sales growth this year, according to initial findings from a Global Solar Council survey.
May 18, 2021
Developers will need to install the equivalent of "the world’s largest solar park roughly every day" by 2030 to support global net-zero emissions targets, according to a new report.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021