Government forces Eskom to sign PPAs



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Windpower Monhtly

SOUTH AFRICA: Cautious optimism marks wind-sector reactions to the South African government’s 1 September promise to unblock a two-year, 2.38GW backlog of renewables projects, 1.4GW of which is wind power.

Energy minister Mmamoloko Kubayi said state grid operator Eskom would be forced, by contract, to sign all outstanding power purchase agreements (PPAs) by 28 October.

In return, all developers must renegotiate power sales prices originally made at the end of 2015 in bidding rounds 3.5 and 4.

At face value then, South Africa’s wind development is set to restart, albeit with commissioning of pending projects now scheduled for 2021, rather than 2019 as initially envisaged.

Since the government set up its renewables procurement plan, known as REIPPP, in 2011, the country has installed more than 2.8GW of renewables, including nearly 1.5GW of wind power.

But in 2016, following three successful bidding rounds, Eskom refused to sign off PPAs for the 2.38GW of winning bids in rounds 3.5 and 4.

Eskom cited overcapacity resulting from the country’s economic downturn and slumping energy demand, although critics suspected the regulator was reserving capacity for coal and nuclear companies.