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Jan 21, 2008

Eskom to invite more cogeneration projects, hopes to fast track some

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© Reuse this Africa’s biggest power producer, State-owned Eskom, will run another round of bidding for electricity cogeneration, after having received proposals for 5 000 MW in the first bidding process, a senior official said on Monday.

This amounted to about one-eighth of the utility’s current installed capacity, and these projects that got the go ahead would start contributing power to the grid around 2012.

Eskom Enterprises MD Brian Dames said that the capacity-constrained company was now looking at inviting more companies to bid to supply it power “over and above” the current bidding process.

He was speaking after Eskom’s top brass met with representatives of its biggest industrial customers. There were over 130 officials from 38 companies.

“Given the current situation, we are considering running another round, and hopefully we can do a lot with that, and include more parties, and bring some of those proposals forward,” he said at a media briefing in Midrand.

All of the bidders, which included steel giant ArcelorMittal South Africa, sugar cane producers, and biomass producers, had asked for an extension to Eskom’s February bidding cut-off date, which it pushed back to May, Dames said.

The South African power utility had run into severe generating capacity problems since January 10, with national shortfalls reaching levels of 2 500 MW – almost the size of a large power station.

Dames said that while most of the bidders had indicated they could start supplying power from early 2012, Eskom was hoping to push some projects forward, and was looking at ways to incentivise this.

He said that the power parastatal had already signed a cogeneration agreement with petroleum products firm Sasol.

“The ball is now in their court to actually build the plant,” Dames stated.

He added that some of the cogeneration bidders wanted the contracts duration to be extended by a few years to 25 years.

Eskom was hoping to get finality on the legal and commercial framework for cogeneration within the next month.

It was Eskom’s initial aspiration to add 900 MW of power to the grid from cogeneration sources.


Edited by: Mariaan Webb
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