WATCH: Is it time to break up Eskom?

Cape Town - The SA Renewable Energy Council has accused Eskom of abusing its power and suggests the power utility be split to separate the generation component from the grid component

Speaking to Fin24's Matthew le Cordeur, the director of the SA Renewable Energy Council said Eskom isn't set up to welcome or foster competition.

"In fact, it is set up to behave like a monopoly," said Mark Pickering.

"Eskom is using its monopoly power to prevent access to the market for new entrants."

He was referring to the power utility's refusal to enter into power purchase agreements (PPAs) with preferred bidders arising from government’s Renewable Energy Independent Power Produce Procurement Programme.

Brenda Martin, the chairperson of the SA Renewable Energy Council, said the reasons provided by Eskom to not sign about 37 agreements can be refuted.

"What we are told by Eskom is that the renewables are unaffordable, the grid is constrained and can't cope with more renewable power and that in time renewables would just be too expensive".

Martin said Eskom has made use of outdated prices for renewables. According to her, renewable energy is the cheapest at 62 cents per kilowatt an hour compared to coal and nuclear that is over R1.

She explained that Eskom decided to look at one of the more expensive technologies in relation to other renewables as a reason to stop signing PPAs.

The SA Renewable Energy Council is of the view that Eskom is in favour of nuclear. "We feel that they are inclined towards nuclear procurement right now," said Martin.

Pickering claimed that Eskom is abusing its position as it controls both the grid and the bulk of generation.

"We think that Eskom needs to be disaggregated - in other words we need to separate the generation component from the grid component."

He said the grid component should behave independently of who ever is supplying power into the grid.

READ: Eskom fires starting gun on nuclear plan

Eskom recently released the Request For Information (RFI) for the procurement of nuclear power stations as part of the broader Nuclear Build Programme.

The RFI forms the non-financial part of the overall request for proposals (RFP), which requires Treasury’s sign-off before it can be published. That is due to be released in the first half of 2017.

It is the first step leading to the appointment of one or more foreign specialist suppliers, who will work will the South Africa team in the construction of the new fleet of nuclear power stations.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot