Eskom turns to IPPs, private companies to help stave off loadshedding

Eskom launches three programs to procure 1,000 MW for the national grid from Independent Power Producers in light of ongoing challenges.

Eskom,South Africa’s State-owned power utility company, launched three programs on 19 September to procure 1,000 MW for the national grid from Independent Power Producers (IPPs) and large companies with their own generation capacity.

This is expected to make an important contribution to the Stage 6 and Stage 5 loadshedding that has affected the country over the last couple of weeks as Eskom struggles to meet the national power demand due to a combination of planned maintenance and unscheduled breakdowns of its coal-based fleet of ageing power stations.

Eskom programs

The Standard Offer Programme will procure power from companies who have existing generation capacity for a period of three years.

The Emergency Generator Programme will procure more costly power during periods when the grid is significantly constrained. The program allows for IPPs to provide energy daily to compete with the Eskom generators in the internal market, based on offer price and availability.

Lastly, the Bilateral Power Import Programme will secure imports of power to the country from neighboring countries.

South African President Cyril Ramaphosa announced an energy plan on 25 July to resolve the country’s ongoing energy crisis. While the largescale renewable projects mooted in the energy plan are long-term interventions, the action plan “sets us up to make the right decisions and move us in the right direction.”

However, for these to start having an impact, they need to be implemented with the utmost urgency,” said Janice Foster, Managing Director – Energy at leading consulting engineering and infrastructure advisory firm Zutari. Foster says she is “optimistically confident” about the outcome of the energy plan.

A global problem

While in South Africa the current energy crisis has resulted in of years of loadshedding, many of the challenges behind this are not unique to South Africa. “Globally we see different parts of the world facing an energy crunch that might look different but are based on some of the same fundamental issues,” said Foster.

South Africa is currently facing challenges in implementing its transition to renewable energy due to international demand for components.