Eskom has released finer details of its plan to procure 1 000MW from independent power producers (IPPs), saying for now its focus is on entities capable of supplying more than one megawatt to the grid.
Over time, the power utility Eskom says, the threshold will be lowered to enable smaller producers to participate.
Eskom adopted an emergency posture over the weekend, approaching IPPs yesterday to procure 1 000MW to add to the grid.
This followed Eskom losing five of its generating units, with a combined capacity of 2 400MW, leading to higher levels of power cuts.
However, it says as part of the broad measures to address the load-shedding crisis, it launched three programmes to procure the much-needed power for the national grid.
“The combined impact of the programmes, predicted to exceed 1 000MW, will make an important contribution towards reducing the load-shedding burden on consumers.
“The aim is to sign the first power supply agreement during the course of the current week, and for the power to start flowing through the grid as soon as possible.”
Eskom revealed its three-tiered strategy on IPPs, saying it has the Standard Offer Programme, which will see the company procure power from companies that have existing generation capacity for a period of three years.
“The standard offer approach allows Eskom to purchase electricity at an established price calculated at the avoided cost of own generation (including long-term energy purchases from independent power producers).
“The standard offer allows for a static price, which is established each year based on the regulatory approved cost recovery and covers the variable cost of generation. It also allows for a dynamic price option, where the price is set day-ahead for each hour of the following day, indicating the avoided cost of generation based on internal scheduling of generators.”
Next in line is the Emergency Generator Programme, which it says enables the power utility to procure more expensive power during periods when the grid is significantly constrained.
“The programme allows for independent generators to provide energy daily to compete with the Eskom generators in the internal market. The independent generators will supply into the grid based on the offer price and availability provided.”
Eskom’s third approach is the Bilateral Power Import Programme, which it says is to secure imports of power to the country from neighbouring countries, as several countries have expressed an interest in selling additional surplus power to South Africa.
“The programme will provide a mechanism to access such opportunities. Eskom is already importing electricity from some of its neighbours via the Southern African Power Pool, an average 200MW that is being used to augment Eskom generation capacity when the grid is constrained.”
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