South Africa’s state-owned electricity utility, Eskom Holdings SOC Ltd., has issued a request for proposals (RFP) for the leasing of portions of its land in the coal rich province of Mpumalanga, for development of renewable energy projects by independent power producers (IPPs).
The land will be availed via an auction process for renewable energy projects of up to a 100 megawatts (MW) and will be leased for a minimum of 20 years per project.
Eskom’s land in Mpumalanga is in close proximity to its existing power stations in the province. Development of renewable energy projects next to Eskom’s coal power stations will help accelerate connection of the projects to existing transmission lines, and provide South Africa with much needed power.
“The initiative is intended to allow investors accelerated access to our existing grid, and to enable investment in renewable energy next to our coal-fired power stations, to demonstrate our commitment to be part of the just energy transition,” said Eskom’s Chief Executive, André De Ruyter.
South Africa is currently experiencing recurring blackouts due to Eskom’s ageing coal power generation fleet constantly breaking down. Eskom supplies over 90% of the country’s electricity needs.
According to the South African Wind Energy Association (SAWEA), the development of renewable energy projects in the province of Mpumalanga will remove significant barriers, and increase the country’s energy availability factor, as it will drive the production of much-needed new clean power in a corner of the country that has always been home to coal.
“This move to deploy renewable power in Mpumalanga, will play a key role in South Africa’s Just Energy Transition as this Province will become a priority area for green investment, thereby increasing South Africa’s clean energy portfolio and allowing for higher levels of renewable power penetration,” explained Mercia Grimbeek, Chair of SAWEA.
Eskom expects that at least 1 000 MW of renewable energy projects could be developed under its leased land in the initial “trial phase”. The utility hopes that around 4 000 MW to 5000 MW of renewable energy capacity could be added in the country’s coal belt when some of its coal-fired power stations are eventually retired.
Development of renewable energy projects in Mpumalanga is part of Eskom’s Just Energy Transition strategy. The Just Energy Transition strategy seeks to ensure the communities of coal mining areas are not negatively affected by the shutting down of coal mines and coal power generation stations, and are included in the new green energy sector.