Eskom: There is such a thing as too much renewables

Facebook
Twitter
LinkedIn
Reddit
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.”

15 September 2022
Bifacial PV modules will be the dominant solar PV technology globally within one or two years; in the utility-scale sector, their market share is already above 70%. This webinar will provide a clear view on the successful implementation of bifacial technology, maximizing system performance and minimising LCoE.
4 October 2022
Solar & Storage Finance USA, the only event that connects developers to capital and capital to solar and storage projects, will be back in November 2022.

Read Next

August 15, 2022
German energy company RWE’s onshore renewables business has undergone a dramatic change in fortunes on 2021, with 1H 2022 seeing the unit return to profitability following a poor H1 2021 performance, while during the first half of the year the company invested €2 billion (US$2.04 billion) in the expansion of its green portfolio.
August 15, 2022
The US House of Representatives on Friday passed the Inflation Reduction Act (IRA). The largest climate package in US history will now move to the desk of President Joe Biden, where it is expected to be signed into law as early as today.
August 11, 2022
German project developer Energiequelle has entered the Polish renewables market with an eye on 30 projects with more than 1GW of capacity.
August 10, 2022
Iberdrola has commissioned the 590MW 'Francisco Pizarro' PV project in Extremadura Southwestern Spain, which is Europe’s largest solar plant.
PV Tech Premium
August 4, 2022
PV Tech Premium unpicks South Africa's recently unveiled policy measures aimed at tackling the country's energy crisis and boosting renewables deployment.
August 3, 2022
Spain has started the process to celebrate a fourth round of renewables auction in November with 1.8GW of solar capacity to accelerate its electrification.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 7, 2022
15:30 AEST (UTC +10)
Solar Media Events
September 14, 2022
London
Solar Media Events
October 4, 2022
New York, USA
Solar Media Events
October 11, 2022
Virtual event