SA calls for power producers

18 August 2008

South African state-owned power utility Eskom is seeking statements of qualification from both national and international companies that want to invest in the country as independent base load power producers.

In 2003, the South African government decided that future power generation capacity would be divided between Eskom, which would produce 70% of the country’s electricity needs, and independent power producers generating the remaining 30%.

Further to this, Cabinet decided in 2007 that Eskom would be the sole buyer of electricity generated by independent power producers.

In a statement this week, Eskom said that its multi-site base load independent power producer programme would be developed on a build-own-operate basis, with an envisaged contract term of 25 years.

“Under this programme, Eskom’s total requirement ranges from 2 100 megawatts to approximately 4 500 megawatts, with a minimum plant capacity of 200 megawatts,” the statement read.

According to the utility, it will act as the single dispatcher with the power purchase agreement being structured on an availability basis, as is customary for base load independent power producers.

Under such a structure, Eskom will pay capacity charges based on the availability of the plant, while the independent power producers will also be required to enter into an equivalent term agreement with a fuel supplier to procure fuel supply.

“Shareholder arrangement criteria are being finalised and are envisaged to include a minimum of 25% shareholding to be allocated to black economic empowerment compliant investors,” Eskom said.

According to Eskom, interested parties are required to select sites inside South Africa as determined by access to fuel, transmission infrastructure and water sources, while connection to the Eskom transmission grid shall be made in compliance with the terms of the SA Grid Code as published by the National Energy Regulator.

The tender closes on 5 September and notices of pre-qualification will be issued to successful pre-qualified Developers on 19 September. The request for proposal is targeted to be issued on 13 October, with final bids closing on 11 May 2009, while financial closure is scheduled for 7 December 2009.

Eskom recently began construction on the Kusile coal-fired base load power station near Witbank in the Mpumalanga province, while work on the Medupi coal-fired base load power station, situated near Lephalale in the Limpopo province, began in April this year.

The first of Medupi’s six generating units will be commissioned by early 2011, with the last unit scheduled for commissioning by January 2015. The first of Kusile’s six generating units is scheduled for completion by 2013, followed by the completion on an additional unit after every eight months.

SAinfo reporter

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