RE: Eskom to release land for renewables16 Dec 2021 08:34
During the recent COP26 climate negotiations in Glasgow, Scotland, South Africa received an offer of $8.9-billion from France, Germany, the UK, the US and the European Union to support its just energy transition.
The lion’s share of the offer, which still needs to be converted into either grants or concessional loans, would be directed towards Eskom’s repowering and repurposing initiatives, with the balance earmarked to help South Africa progress its plans for electric vehicle manufacturing and green hydrogen production.
De Ruyter listed converting the pledge into firm transactions as one of his top four priorities for the coming six months.
He listed the other three priorities to include:
finding a solution to Eskom’s outstanding municipal arrear debt of R42.5-billion;
securing a structural solution to the utility’s unsustainable debt position, which currently stands at R392-billion; and
addressing the poor performance of its coal generation fleet, the energy availability factor from which had fallen to about 65%.
De Ruyter did not expect the land-release programme to become a major source of new revenue, but rather to provide the impetus for much needed generation capacity on land that had limited commercial value to Eskom.
Most of the land is designated for agricultural use, with some currently leased out for grazing and other portions despoiled.
The Minerals Council South Africa reacted positively to the announcement, saying it could help address constraints to investments in renewable-energy projects.
Minerals Council member companies had a potential renewables project pipeline of 3.9 GW worth more than R60-billion in potential investment.
“The announcements by Minister Gordhan and Eskom management today are great news for not just mining companies but the broader economy.
“We are finally starting to see a break in the log jams that have constrained much-needed investments in renewable energy projects, taking pressure off Eskom and greening our members’ credentials,” Minerals Council CEO Roger Baxter said in a statement.
Business Leadership South Africa (BLSA) also welcomed the move, stating that if the maximum take-up of Mpumalanga land was utilised, there was potential to add up to 2 GW to the country's supply.
"Given Eskom’s constrained financial situation which makes access to capital expensive, this is an innovative way to add new capacity to the electricity system, including leveraging Eskom assets to incentivise the expedited establishment of generation capacity.
"These assets include access to land (with established environmental approvals) and proximity to grid connection points, among others," BLSA said.
South Africa Wind Energy Association chairperson Mercia Grimbeek described the move to deploy renewable power in Mpumalanga as key to South Africa’s just energy transition, as it would make the province a priority area for green investment.
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