Eskom postpones IPP signing with Redstone

(Gianluigi Guercia, AFP)
(Gianluigi Guercia, AFP)

Johannesburg – Eskom postponed the signing of a 20-year power purchase agreement (PPA) with Redstone Solar Thermal Power Project, intended to happen on Thursday July 28 2016.

The agreement would have seen Eskom buy 100 MW from the project for an estimated R50bn for the duration of the contract, according to a statement by the power utility.

The reason for the postponement was due to conditions by both parties not being fulfilled. Eskom spokesperson Khulu Phasiwe was not able to share what those conditions were.

This follows reports that Eskom indicated it will prevent any further power purchase agreements with South Africa’s Independent Power Producers (IPPs) without engagement over the matter.

Read: De Lille: Let Cape Town buy Eskom's unwanted IPP energy

The Department of Energy (DoE) launched the Renewable Energy Independent Power Producer Procurement Programme (RE-IPPP) in 2011. It called for 3 725 MW of renewable energy technologies. So far 2 145 MW of renewable energy capacity has been connected to the grid.

Phasiwe told Fin24 that Eskom does not “dispute” that it wrote a letter to the Minister of Energy Tina Joemat-Pettersson. News reports state that Eskom cancelled the new round of RE-IPPP bids. “We have not cancelled anything,” he said.

The policy of RE-IPPP is in the domain of the Department of Energy (DoE). “They are the ones who introduced it … further developments are done by the DoE,” he said. “All we did was write a letter to set up a meeting to clarify some of the issues we are having.”

Read also: Momentous day for black-owned IPP gas

It is expected that 1 030 MW from the RE-IPPP Programme will be commissioned during 2016/17. This includes 504 MW from wind, 510 MW solar PV, 4 MW hydro and 11 MW landfill. Under the DoE gas peaker programme, the 670 MW from Avon came into commercial operation last week.

The cost of Eskom’s existing PPAs will be recovered through the regulatory clearing account process, as approved by the National Energy Regulator of South (Nersa). 


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