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Momentous day for black-owned IPP gas company

Jul 25 2016 20:27
Matthew le Cordeur

Cape Town – A 670 MW independent power producer (IPP) open cycle gas turbine plant started commercial operation on Monday, signalling a new era for a black-owned power producer.

Avon Peaking Power consists of four units and is located in Shakaskraal, about 10 km inland from Ballito in KwaZulu-Natal.

It is jointly owned by Engie, black-owned company Legend Power Solutions (LPS), Mitsui and the Peakers Trust, which represents the local community.

The launch comes days after Eskom indicated it will prevent any further power purchase agreements with South Africa’s IPPs without engagement over the matter, as the power utility gears up to become a nuclear provider through the 9.6 GW nuclear new build programme.

READ: Eskom's IPP move places SA on nuclear watch

Amid this concern for IPPs, the Avon plant has been designed so it can adapt to benefit from gas-to-power development plans, Avon Peaking Power said in a statement on Monday.

This could be of future use to Eskom regardless of the nuclear developments, as gas power can provide a flexible supply of power to handle peak periods of demand.

Avon and its sister power plant – the 335 MW Dedisa facility that went live at the end of 2015 in Port Elizabeth – are South Africa’s first large IPPs initiated by the Department of Energy (DoE).

They will supply electricity to Eskom under a 15-year PPA awarded by the DoE on a build, own and operate basis.


The operation of the plant will create permanent direct and indirect jobs for the local community over the 15 years of the PPA, the company said.

“Up to 1 500 jobs were created during construction with an achievement of 4 000 000 manhours,” it said, adding that “88% of jobs were reserved for black employees, of which 63% were skilled.

“The construction of the Avon and Dedisa power plants demonstrate the strength of the partnership between the South African government and the private sector,” said Arnaud de Limburg, CEO of Avon Peaking Power.

“The start-up of Avon, only a few months after Dedisa will be instrumental in supporting South Africa’s industrial growth ambitions.

READ: The roles of private sector and Eskom in renewable energy

“The plants will provide much needed power and energy security during peak demand periods. They will equally benefit the socio-economic development of the communities surrounding each project.”

The success of Avon and Dedisa Peaking Power paved the way for the IPP model in South Africa, said Mohamed Hoosen, chairperson of Avon and Dedisa.

“Continuing with this pioneering spirit the project intends to enter its next development phase as an anchor load for gas conversion through the DoE driven introduction of natural gas to South Africa,” he said.

The Avon Peaking Power in Shakaskraal. (Photo: Supplied)

It has been a long road of “patience, unwavering tenacity and commitment to meaningful participation by black people in the energy sector”, said Mpho Scott, chairperson LPS.

“We are proud to be part of these history making events,” he said. “Our two power plants, Avon and Dedisa are contribution over a 1 000 MW of power to help with energy security in our country.”

Avon and Dedisa now provide LPS with a springboard into the gas economy, it said.

“LPS is developing a gas strategy using the expertise of the LPS shareholders gained over the last 20 years in the power and gas industry.  

“LPS intends investing in additional gas infrastructure as the country’s gas economy and Gas IPP programme unfolds and are preparing for the bidding round of the programme.”


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eskom  |  electricity  |  ipp  |  gas  |  nuclear
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