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HomeBusinessSouth Africa: Eskom Launches Three Programmes to Procure Power for National Grid

South Africa: Eskom Launches Three Programmes to Procure Power for National Grid



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Eskom launches power purchase programme to secure 1 000MW to bolster constrained generation capacity

As part of the broad measures to address the loadshedding crisis, Eskom has today launched three programmes to procure much needed power for the national grid.

Initially the programmes will focus on generators capable of supplying more than one Megawatt to the grid. Over time the threshold will be lowered to enable smaller producers to participate.

The combined impact of the programmes, predicted to exceed 1 000MW, will make an important contribution towards reducing the loadshedding burden on consumers.

The aim is to sign the first power supply agreement during the course of the current week, and for the power to start flowing through the grid as soon as possible.

These are:

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

The standard offer approach allows Eskom to purchase electricity at an established price calculated at the avoided cost of own generation (including long term energy purchases from independent power producers).

The standard offer allows for a static price, which is established each year based on the regulatory approved cost recovery and covers the variable cost of generation.

It also allows for a dynamic price option where the price is set day-ahead for each hour of the following day, indicating the avoided cost of generation based on internal scheduling of generators.