Green light for Eskom to buy renewable energy

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Eskom CEO André de Ruyter.
Eskom CEO André de Ruyter.

The National Energy Regulator of South Africa (NERSA) has paved the way for government to buy energy from renewable energy independent power producers (IPPs).

This after the regulator provided its concurrence to a Section 34 ministerial determination, issued earlier this year, which opened the way for the procurement of 6 800MW of wind and solar PV power.

The move will boost SA’s energy mix at a time when power utility Eskom is struggling to keep the lights on, leading to the parastatal resorting to load-shedding.

In a statement yesterday, Eskom said it is pleased to note that NERSA has concurred with the ministerial determination for the procurement of 11 813MW of electricity generation infrastructure, as issued by the minister of mineral resources and energy in February 2020.

This is part of the power infrastructure to be procured under the Integrated Resources Plan of 2019 (IRP2019) over the years to 2030, says the utility.

The IRP stipulates that an additional 6 800MW will be obtained from renewable sources, 513MW from storage, 3 000MW from gas and 1 500MW from coal.

“Given the current supply constraints, this additional generation capacity is urgently required, and will be an important contribution towards ending load-shedding and ensuring energy security for the country,” says Eskom CEO André de Ruyter.

Eskom says it is looking forward to collaborating with the Department of Mineral Resources and Energy and the IPP Office to enable an accelerated execution to bring additional capacity onto the grid in the shortest space of time possible.

Brighter times ahead

Responding to the latest development, renewable energy industry body the South African Wind Energy Association (SAWEA) says while the country continues to struggle with the crippling effects of prolonged load-shedding, recent indicators point to a light at the end of the tunnel that is lit by renewable energy.

SAWEA notes that within a short week, NERSA opened the way to procure new renewable power.

It notes that in that week, Eskom also launched a daily power generation data platform that clearly demonstrates transparency, while Eskom’s CEO has been reported as saying new energy generation sources will need to be clean and green.

“We are hopeful that together these indicators mean that policy and procurement can work hand-in-hand to enable a green power revolution that will support the economic growth that is so desperately needed in South Africa,” says Ntombifuthi Ntuli, CEO of SAWEA.

SAWEA portends that the country’s continued power crisis is a problem that will keep recurring unless the country executes decisive policy initiatives and implements the IRP2019, and this development is the next step to making this happen.

“It is clear from the IRP2019 that the new generation capacity should come from low-cost and reliable renewable energy sources, such as wind and other clean power technologies, especially as renewables can be rolled out within a period of 18 to 24 months, so it is the most feasible option to close the short-term capacity gap and give the country a chance to catch its breath,” explains Ntuli.

The industry body adds that it seems De Ruyter agrees with this sentiment, as he reportedly acknowledged the global shift to renewable energy.

It points out that another win for the renewable sector is the recent issuing of draft regulations by the Department of Mineral Resources and Energy, which paves the way for municipalities to be able to procure their own power from IPPs.

Once that regulation is approved, SAWEA says it will open a new market segment for renewable energy procurement.

“We have also seen an increased interest from the private sector, particularly the members of the energy-intensive users’ group, to procure power directly from independent power producers,” says Ntuli.

The industry is ready and eager to help close the energy supply gaps created by Eskom’s reduced Energy Availability Factor and the decommissioning plan tabled in the 2019 IRP, she adds.

Renewables confidence

Meanwhile, consultancy firm Kearney is of the view that the renewables industry can emerge from the COVID-19 pandemic as one of the more confident sectors.

According to a recent report released by Kearney, global lockdowns have highlighted the need for universal clean electrification, as the natural environment has seemed to rejuvenate spectacularly in the wake of reduced human activity and offered a glimpse of what a cleaner world could look like.

“This glimpse will undoubtedly spur the already significant traction towards renewable energy supply that we had seen in the pre-COVID years,” suggests Prashaen Reddy, a partner at Kearney.

Reddy notes that renewable energy was declared by the International Energy Agency to be the most resilient supply of energy during the COVID-19 lockdowns.

Therefore, he adds, in spite of the lockdown-induced downturn, there is more enthusiasm for sustainability-driven investments as energy production around the world is being decarbonised.

“This is an era in which consumers are loyal to Earth-conscious brands, and players across all echelons are now incorporating environmental considerations heavily within their roadmaps to economic recovery,” says Reddy.

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