Rush to provide private power

Johannesburg - Private consortia have presented Eskom with plans for building 23 different coal-fired power stations, which could raise the country's electricity capacity by about 50% between 2012 and 2017.

There is even a proposal for a commercial solar-powered plant among the 27 preferred applications from independent power producers that Eskom has accepted as pre-qualifying applications for its programme.

The other applications are for the construction of a liquid gas-fired power station, a petroleum gas plant and a smallish hydro-electric station, Eskom spokesperson Andrew Etzinger announced on Monday.

The total generation capacity included in the private applications is some 20 000MW. Eskom's entire basic generation capacity is currently about 40 000MW.

In recent weeks the power utility has indicated that the country's electricity reserve (reserve margin) will again reach the international acceptable level of 15% of peak demand only by 2014, at the very earliest. Even should the independent generators start to deliver by 2012, most would only come on stream by 2014.

Anglo American indicated its involvement when senior officials at the mining giant last month complained that the process was so cumbersome.

"Most of the applicants are international companies with black economic empowerment partners," says Etzinger.

By the end of November the 27 preferred applicants will be asked to make formal proposals before end-May next year.

Deals will be signed in the first quarter of 2010, and the projects should deliver their first electricity to the network between 2012 and 2017.

The contracts will have a 25-year term.

"The process is taking so long because the independent producers now need to conclude a comprehensive negotiation process with their shareholders, funders and suppliers, as well as compete for power-purchasing contracts with Eskom. This is an extremely complex and time-consuming process," Etzinger explains.

- Sake24