Green Light for Eskom to Buy IPP Power

Johannesburg – The minister of Public Enterprises, Lynne Brown, on Friday gave Eskom the go-ahead to sign power-purchase agreements with independent power producers (IPP) who form part of SA’s independent power scheme.

Brown approved Eskom’s application to buy additional renewable energy such as wind or solar power from producers involved in last bid windows of South Africa’s much-hailed renewable programme.

“The conclusion of the power purchase agreements to enable the implementation of the outstanding projects under bid windows 3.5, 4 and 4.5 of the Renewable Energy Independent Power Producers Programme is critical to implementation of the national energy policy as articulated in the Integrated Resource Plan of 2010,” Brown said in a statement.

The IPP programme ground to a halt when Eskom refused to sign further agreements about two years ago, citing financial woes.  The decision put a hold on both the programme and investment into renewables flowing into the country.

On January 11 2018, Eskom submitted an application to Brown under Section 54 of the Public Finances Management Act to purchase the additional energy.   The minister approved the application on Friday.

“South Africans have reason to feel very proud of the progress the country has made adding renewable energy to the energy mix,” she said. “There are risks to Eskom’s financial and operational stability in the medium term, among others, that must be mitigated. ”

She added that South Africa is committed to reducing its carbon footprint.

Brown said she requested that Eskom work quickly to implement the decision in order to avoid further delays.

“I have also written to the Ministers of Energy and Finance requesting that we discuss how to address Eskom’s genuine concerns through expediting a revision of the Government Support Framework Agreement,” Brown said.

Finalising amendments to the National Energy Regulation Act would enable Eskom and South Africa’s national energy regulator Nersa to efficiently and effectively resolve deadlocks relating to tariffs and regulatory frameworks by including a predetermined appeal mechanism, she concluded.