Bilateral power deals to fuel South Africa’s wind energy future

The South African Wind Energy Association (SAWEA) is anticipating that bilateral power purchase agreements (PPAs) with corporates and municipalities could benefit South Africa, as the domestic demand for energy increases. Deals like these are likely to gain momentum once Eskom’s transmission and system operator functions are unbundled from the utility.

Currently, Eskom carries a debt of R440-billion ($30 billion), which it increases every day.

The PPA’s come after Minister of Public Enterprises, Pravin Gordhan, said Eskom would have depleted its funds by the end of October, had the government not injected R23 billion ($1.5 billion) to keep the power utility company afloat for at least three years.

Speaking on a webcast hosted by the GWEC, SAWEA chairperson Mercia Grimbeek said the longer-term prospects were also positive for wind generators to enter into bilateral PPAs with energy-intensive companies, mines and municipalities looking to either lower their carbon emissions or diversify their sources of electricity.

More than 6 400 Megawatts (MW) of renewable energy capacity has been procured through the Renewable Energy Independent Power Producer Procurement (REIPPP) program, with wind accounting for 62 percent of that procured capacity. There are 36 wind projects where with an aggregated capacity of 3 366 MW.

Public Enterprises Minister Pravin Gordhan is expected to release a policy paper outlining the government’s approach to the unbundling of Eskom in the coming weeks.


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