Eskom leases land to four independent power producers

Eskom leases land to four independent power producers

Eskom on Friday signed a land lease agreement with four independent power producers to add additional generation capacity to the struggling power grid.

Eskom CEO Andre de Ruyter May 2022

The four companies will set up their plants at two of Eskom's power stations in Mpumalanga to produce new clean energy generation capacity.

The struggling power utility issued a request for proposals in April this year, which was followed by the selection process.

The four companies that won the bid are HDF Energy South Africa, Red Rocket SA, Sola Group and Mainstream Renewable Power Developments South Africa.

Eskom CEO Andre de Ruyter says the generators will be connected to the grid within the next 24 to 36 months.

"The investors will lease a total of 6 184 hectares of land for a period of 25 to 30 years each and contribute an estimated 2 000MW to the national electricity grid. Eskom will be issuing new tenders for other parcels of Eskom land every quarter going forward, with a view to enabling and accelerating investment in new renewable generation capacity.

“The bidders will now do comprehensive feasibility studies to determine which technologies they will be implementing at each site - wind, solar and battery storage. The exact generation capacity will only be known once the studies have been completed.

 “The bidders will sell the electricity on a bilateral basis to customers that will sign power purchase agreements with the developers. The electricity will be wheeled across the Eskom grid, generating revenue for Eskom from its existing assets," said De Ruyter.

 He believes the agreement will attract an estimated investment of  R40 billion.

"Eskom plans to make more land available around its power stations and other sites where there is sufficient grid capacity to connect renewable energy producers. Eventually, up to 30 000ha can be made available for similar projects. The next phase of land will focus on properties around the Kendal and Kusile power stations in Mpumalanga, as well as the retired Ingagane Power Station in Newcastle, KwaZulu-Natal.”


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