The Independent Power Producer initiative to be expanded to alleviate electricity supply constraints

Posted On Wednesday, 24 February 2016 16:14 Published by
Rate this item
(0 votes)

Efforts are being stepped up to alleviate electricity supply constraints, with government preparing to expand the Independent Power Producer (IPP) initiative, said National Treasury.

Independent Power Producer

“Government is stepping up initiatives that will alleviate the electricity supply constraint over the medium term,” government said in the Budget Review, as Finance Minister tabled the 2016 budget.

Co-investment with the private sector has already added 2 045MW of renewable energy to the electricity grid. Contracts have been awarded for projects that will add another 6 377MW over the medium term.

“Government is preparing a major expansion of the IPP initiative to contribute base-load energy capacity,” said the Budget Review.

Later this year, the Minister of Energy will announce preferred bidders for 1 000MW of coal projects. Private investment of about R45 billion is anticipated and a second round of coal projects is expected to add 1 500MW to the grid.

Meanwhile, a gas-to-power IPP programme is also under preparation, with a view to contributing 3 126MW of electricity generation through investment in liquefied natural gas facilities and power plants in the ports of Richards Bay, Coega and Saldanha Bay.

This initiative will draw on investment by state-owned companies and the private sector. It will also create opportunities for upstream investment.

Over the longer term, government has identified the need to expand production of nuclear power within South Africa’s overall energy mix.

“Nuclear power involves substantial upfront costs, and government will only expand such capacity at a scale and pace that is affordable after a thorough and transparent tender process,” it said.

Over the past year, electricity availability was bolstered with the completion of the first unit of the Medupi power station and the Sere wind farm. Further projected capital investment by Eskom totals R155.3 billion over the medium term. This includes continuing work on the Medupi and Kusile power stations, and strengthening of transmission and distribution grids.

Additional units from the Ingula power station will be connected in 2017.

Last modified on Wednesday, 24 February 2016 23:28

Most Popular

Thavhani City set for more growth in 2021 as its Motor City and medical developments accelerate

Feb 15, 2021
Thavhani_City_Locality_Layout
Thavhani City mixed-use urban precinct in Thohoyandou, designed to be the future economic…

It’s cheaper to buy than to rent a home in 2021

Feb 08, 2021
Carl_Coetzee_BetterBond_CEO
If the past year has taught us anything, it is how important our homes have become to us.

Brand new residential development in La Lucia 60% sold through Pam Golding Properties

Feb 15, 2021
Kent_Exterior
Such is the consistent high demand for centrally located, well-priced residential…

Optimistic budget masks a number of key risks

Feb 25, 2021
Maarten_Ackerman_Chief_Economist_and_Advisory_Citadel
Finance Minister Tito Mboweni’s budget has been received very positively, as demonstrated…

Relief at no increase in personal tax, says Dr Andrew Golding

Feb 25, 2021
Andrew_Golding_Golding_PropertyGroup
Relief at no increase in personal tax, says Dr Andrew Golding, chief executive of the Pam…

Please publish modules in offcanvas position.