Related Stories By Gabriel Manyati Published: 20120319
SA woos private power firms

Johannesburg - South Africa is implementing an independent power producer programme for renewable energy technologies in a bid to enable the government to reach its goal of supplying 3 725MW of renewable energy by 2016.

The Department of Energy is soliciting information from potential co-generation, coal, natural gas and hydro project developers to test the appetite for these power schemes. If there is interest and the state procures such power, it will create another entry point for private-sector participation in South Africa’s energy sector.

Power utility Eskom has — via its medium-term power purchase programme — signed up 376MW from Sasol, Sappi, Ipsa and Tangent Mining.  The department said the request for information would be used to develop a procurement process. It said, “This (request for information) is for the (department) to understand the market to ensure the successful implementation of the (integrated resource plan for electricity).”

Depending on the response, the department could request potential developers to submit proposals for projects in September.

Energy Department director-general, Nelisiwe Magubane, said last week that the request for information was in response to unsolicited bids the department had received, which it cannot consider in terms of existing legislation. The department said it wanted responses from developers with ready projects where comprehensive feasibility studies had been completed.

Buying additional power from the private sector is important to prevent power shortages.

“It is a risk-mitigation plan. We want people who can deploy that power quicker,” Magubane said.

Co-generation projects — where an industrial facility uses its waste to produce heat or electricity — could be deployed quicker, she said.

Magubane said the request for information would also assist the department with the price path for such power. She said the request was part of the implementation of the integrated resource plan for electricity, IRP2010, which guides investment in new capacity up to 2030.

Doug Kuni of the South African Independent Power Producers Association said this was the best way forward as Eskom could not build new plants quickly enough. “Private power producers have been looking for opportunities for over nine years. South Africa needs an independent grid and a market operator that will procure power from all producers.

“At the moment there is no competition for Eskom. This (request for information) creates competition among developers, not with Eskom,” Kuni said.