Wednesday, August 11, 2010

South Africa's independent power starts generating...

Hopefully we'll see this gain momentum...

Cape Town - MPs heard on Wednesday that at least 215 megawatts (MW) of privately-generated electricity has already been commissioned and is being fed into the power grid. Another 400 MW is expected to be operational by March 2011.

According to Steve Lennon, a divisional executive with Eskom, six projects have been agreed with five independent power producers. Four contracts are already finalised and have been approved by the electricity regulator (Nersa).

The other two have been sent to the producers for their final approval after completion of negotiations. A price of R1.25 per kilowatt/hour has been agreed, with contracts extending from 15 to 20 years.

"Business and Eskom's assessment is that the potential for more co-generation projects is there," Lennon told parliament's trade and industry committee, "possibly 1 000 to 3 000 MW based on various studies. Some of this appears to be self-generation, rather than co-generation."

He told the committee that the current price trajectory and possible energy conservation measures are already providing an incentive for businesses to do this, removing the need for subsidy.

The renewable energy feed-in tariff also provides for about 1 025 MW and just over 1 000 MW from the open-cycle gas turbine programme by 2013.

Lennon said that Nersa still need to finalise the final power purchase agreements and criteria to be used by the "single buyer" office in Eskom's system operations division. However, the regulator has indicated this could happen within the next two weeks.

"Eskom will commence the procurement process once the power purchase agreements and selection criteria are issued," he said.

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