Independent power by end 2010

Cape Town - Government has vowed to have the necessary policies in place to allow independent power producers (IPPs) to supply electricity to the national electricity grid by the end of this year.

Minister in the Presidency Collins Chabane said on Friday IPPs will deliver a minimum of 10% of South Africa's power needs in three years' time.

"Once the rules and regulations are in place and people have gone out to tender, that will determine it [the pace at which this plan will advance]," said Chabane.

He was emphatic about the fact that this was not a move to private power generation, adding it will also not see electricity prices rise further.

"We are not privatising," Chabane said. "We need to bring into play other power producers. We can't escape IPPs, especially if we go to green energy."

He said public or private ownership of electricity generation does not determine whether power is cheaper or more expensive.

"If Eskom can produce electricity at a certain rate - that will the market price," Chabane said. "That is the price IPPs will produce it at."

President Jacob Zuma said in his state of the nation address on Thursday evening that an independent system operator separate from Eskom Holdings is to be established.

The independent operator, it was later explained by presidency officials, will buy the power generated either privately or from Eskom, and distribute it. This will avoid any conflict of interest that Eskom may have suffered. - Fin24.com