We don’t ‘procrastinate’ – Eskom hits back at Mantashe over emergency power supply
Eskom’s response comes after Mantashe said on Thursday that the utility was hesitant about purchasing emergency power.
- Eskom CEO André de Ruyter has denied that Eskom is suspending emergency power projects, saying the utility has yet to make definitive deals.
- Eskom would be remiss to make deals without knowing the trade terms, he said.
- While the utility has identified a number of projects that could potentially be funded by the R131 billion green funding announced at COP26, it is now up to an intergovernmental task force to negotiate deals.
Eskom CEO André de Ruyter responded to accusations by Mineral Resources and Energy Minister Gwede Mantashe that the utility was delaying the government’s purchase of emergency electricity, including at from electric vessels.
“It’s a little difficult to sign a deal when you don’t know what that deal looks like,” De Ruyter told media in a briefing on Friday. “It’s not something we resist, but we have to have all the facts on the table.”
Eskom’s response comes after Mantashe said Thursday that Eskom was hesitant about emergency power supplies, including the three Karpowership projects. “They come and go. They don’t want this… they don’t want that. But this ability has been released to them,” Mantashe said in an interview with Newzroom Afrika.
De Ruyter, however, said Eskom has yet to see the final power purchase agreement from the Office of Independent Power Producers (IPP).
“This is clearly a key part of trade deals… and we would be in breach of our fiduciary obligations to Eskom as a legal entity if we were to enter into deals without knowing the key trade terms we are signing for.”
He added that the maximum price methodology of South Africa’s National Energy Regulator (Nersa) was not ultimately discussed between Nersa, the IPP office and the Ministry of Mineral Resources and Minerals. energy (DMRE). There are still issues to be resolved on issues such as the link between tariffs and currency, gas and other prices.
Despite this, De Ruyter said emergency power projects face other bigger challenges. The Karpowership projects in particular have been denied environmental permits to operate in three ports. The program is also the subject of a lawsuit brought by DNG Energy, a bidder who claims to have lost to Karpowership due to the manipulation of the tender.
The DMRE meanwhile extended the financial close date to the end of January 2022, despite Mantashe’s previous insistence that no extensions be granted.
“I don’t think Eskom is – when it comes to emergency power purchases – the party delaying the process,” De Ruyter said.
Mantashe also pointed out Thursday that the DMRE recently awarded bids for the purchase of 2,600 MW of green electricity under the fifth tender window of the government’s renewable energy supply program.
De Ruyter said Eskom is completing all of its internal governance processes regarding the fifth round of renewable energy supply, although it has yet to receive final documentation from the IPP office. “We plan to conclude our internal review on this matter by March 2022, which is the required date for completion on our side, according to the PPI officer’s program milestones,” he said. declared.
De Ruyter said that Eskom had no interest in delaying the arrival of new capacity in the network, but that it had to be done on reasonable commercial terms.
“I do not particularly want to be designated a delinquent director by accepting a contract that we have not seen and whose commercial terms are not fully understood,” he said.
Some R131 billion in potential concessional financing for South Africa’s energy transition, as announced at the recent United Nations Climate Change Conference (COP26), is also expected to bring new electricity to the grid.
Clear green strategy
Eskom, said De Ruyter, has a clear strategy for using these funds to help with its decarbonization program and has identified a number of projects on the generation, transmission and distribution side, expanding and strengthening the network being a key element. initiative.
De Ruyter stressed that the funding included Eskom, but was not exclusively for the public service.
“It is important to stress that the political announcement that was made at COP26 was an intergovernmental announcement. The process of negotiating the agreements now will be led by a technical task force which will be led by a number of officials from various ministries, ”he said.
“It is headed by a number of ministers who are involved in overseeing this process and providing the necessary guidance and Eskom, of course, is looking forward to the conclusion of this process so that we can start this very important and urgent program of be able to accommodate new production capacities on the network. “