12 August 2010 – South Africa’s power utility Eskom expects to almost double the level of generating capacity that its grid will get from independent power producers (IPPs) by next March, a senior official said on Wednesday.
Eskom, which is battling to raise some of the R385-billion needed to pay for new capacity in Africa’s biggest economy, is keen to have private players enter the market to boost supply and cut its own cost of building plants.
"Eskom has signed up around 215 MW of generation capacity from IPPs in the last few months, and we anticipate to get that up to 400 MW, essentially doubling it, by March 2011," Kannan Lakmeeharan, divisional executive system operations and planning at Eskom, told Reuters.
Lakmeeharan, who earlier briefed lawmakers at parliament, said, however, the the doubling of capacity depended on IPP board approval for two new contracts.
"Two contracts have been sent to the IPPs for their final approval after negotiations were completed, and we are waiting for responses. We are waiting for their boards to approve them," he said.
Lakmeeharan did not want to divulge the names of the companies involved, except to say they were local. Eskom has already signed IPP agreements with petrochemical company Sasol and independent producer Ipsa, he said.
Local media reported in June that Eskom has also signed a contract with paper group Sappi.
Business and Eskom agree there is potential for more co-generation projects capable of producing between 1 000 and 3 000 MW, although some appear to be self-generation options rather than co-generation.
"There are some options where companies have own generation ability, such as discard coal which they could convert into electricity, like Anglo American and Xstrata have indicated publicly," Lakmeeharan said.