Eskom land lease could see SA get 1800 MW boost to the grid

play article
Subscribers can listen to this article
Eskom has identified 18 companies to lease land to for renewable energy projects.
Eskom has identified 18 companies to lease land to for renewable energy projects.
Getty Images
  • Eskom has selected 18 companies to lease land to develop renewable energy projects.
  • They will add 1 800 MW of generation capacity to the grid.
  • None of the lease agreements have been signed yet, as the companies require environmental impact assessments.

South Africa's constrained power system could soon get a 1800 MW generation boost.

Eskom on Thursday confirmed that it had selected 18 companies to lease land to for the development of renewable energy projects.

The power utility in December announced plans to lease portions of its land in Mpumalanga to potential renewable energy projects to help bolster generation capacity. The land is close to transmission lines, which ensures grid access for the projects. Eskom launched the tender process in April.

The initiative leverages off regulatory changes, allowing licence exemptions for generation facilities of up to 100 MW.

In a statement, Eskom said that none of the contracts had been signed, as the companies need to obtain environmental impact assessment clearance.

"The companies cannot be named, as no contracts have been signed as yet. Eskom will make an announcement of the successful companies once all the processes have been finalised," the statement read. 

More income, less red tape

The bids will cover 4 000 hectares of land, out of a total 36 000 hectares that are available.

"The current projects will bring online a total of 1 800MW generation capacity, once connected," the statement read.

"We hope to sign the land lease agreements with the successful bidders by August," said Eskom CEO Andrè de Ruyter.

"This shows what can be achieved with reduced red tape and the impact of the liberalisation of the energy sector. This additional capacity will be added to the grid without any cost to the taxpayer."

Eskom is set to earn some income from the leasing of land. The projects will also enter into sale agreements for the electricity with third parties.

Eskom is currently implementing Stage 2 load shedding due to breakdowns of generation units which are constraining the grid. 

Get the biggest business stories emailed to you every weekday.

Go to the Fin24 front page.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can 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. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
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