IPP8 Mar 2014 07:56
I smell poop......
MAR 07, 2014
Eskom to procure ‘at risk’ short-term IPP power while longer-term deal is debated
"LONGER-TERM FRAMEWORK
But Eskom also stressed that a longer-term framework was required to enable it to enter into IPP contracts beyond May and confirmed that discussions were under way with government to secure such an arrangement.
Public Enterprises Minister Malusi Gigaba revealed recently that these discussions were under way between the Department of Public Enterprises, the DoE, the National Treasury and Eskom to secure the resources to resume purchases and to pursue yet additional supply-side opportunities.
Energy Minister Dikobe Ben Martins said in early February that the DoE also planned to initiate the long-awaited procurement processes for new baseload and cogeneration IPP projects by the end of March.
The bidding processes would be pursued in line with the determinations issued on December 19, 2012. Under the baseload determination, 2 500 MW had been allocated for coal-fired IPP projects, 2 652 MW for baseload or mid-merit natural gas capacity and 2 609 MW for domestic and imported hydro-electricity prospects.
In addition, the DoE planned to procure 474 MW from near-term natural gas projects as outlined under the Medium-Term Risk Mitigation Plan, which also included a further 800 MW allocation for cogeneration capacity arising from biomass, industrial waste and combined heat and power sources.
However, many in the private sector argue that, in the absence of an independent system and market operator, or ISMO, the full potential of IPPs will not be felt.
Serious questions have, therefore, been raised about the stalling of the progress of the ISMO Bill in Parliament, with Business Unity South Africa arguing that the legislation was urgently required to create a more competitive environment for energy supply and to provide greater energy security in future.
But Eskom chairperson Zola Tsotsi argued that the Bill was “not compatible” with what existed in the South African context.
“The Bill is meant to deal with a market mechanism, and if you look at the capability of the IPPs versus Eskom as a supplier there is no condition for a market mechanism to exist,” Tsotsi said, while calling for market participants to “be practical”.
He also stressed that the Bill would have a material impact on Eskom’s balance sheet, which was currently already reliant on government guarantees to enable it to raise the debt required to fund its build programme.
But Dames added that Eskom had done everything requested of it to prepare for the legislation and that he “would also like to know where's the Bill”."
Http://www.engineeringnews.co.za/article/eskom-to-procure-at-risk-short-term-ipp-power-while-longer-term-deal-is-debated-2014-03-07/rep_id:3182
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