Local power bids to get preference

By Bloomberg Time of article published Aug 28, 2014

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THE DEPARTMENT of Energy wanted to increase localisation in the process of commissioning renewable power projects, Energy Minister Tina Joemat-Pettersson said yesterday.

The government is seeking to cut coal use for electricity and is adding 3 725 megawatts of renewable energy capacity by the end of 2016 through five rounds of tenders, three of which have been allocated.

That may help Eskom meet demand as the power utility struggles to fund maintenance and expansion.

“For the next round we want to intervene so that local players do have a fair share” of contracts, the minister said in a panel discussion in Johannesburg. “Obviously we can do nothing about those that have already been decided on.”

The department will name the preferred bidders in a fourth round of the renewable energy projects on November 24, according to its website.

“The first round, as you heard, gave 20-year contracts to companies and there was only a small percentage of localisation,” Joemat-Pettersson said after the discussion. “There’s obviously some good in the model, but there are obviously some weaknesses.”

Eskom is building Africa’s two largest coal-fired power plants to meet demand and fend off the threat of blackouts. The government planned to construct nuclear facilities that would become operational in 2020, Deputy President Cyril Ramaphosa said last month.

“We’re working on different models and once we have the models sorted out we will be able to make the announcements,” Joemat-Pettersson said of the plans to build a nuclear facility. “Just like with the independent power producers, there’s private sector involvement so there are different models.”

Eskom had connected 21 renewable energy projects by independent producers, with 1 076 megawatts capacity, to the grid, the power utility said in its annual report last released month. – Bloomberg

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