By Antony Sguazzin.
Eskom Holdings SOC Ltd. announced that it will no longer reserve the transmission capacity it had agreed to set aside for winners of a tender for emergency power provision that didn’t meet a 31 December deadline to complete their financial arrangements.
The decision is a blow for Karpowership, the Turkish provider of ship-mounted power plants, and further reduces the likely impact the 2021 program will have in making a dent in the almost daily power outages that are crippling South Africa’s economy.
Only a fraction of the 2 000 megawatts of power generation capacity awarded is being built after a number of the 11 successful projects failed to reach so-called financial close. Karpowership’s three gas-fired projects, which have been beset by lawsuits and challenges from environmentalists, account for 1 220 megawatts of the total.
Eskom’s decision means that the transmission capacity, which is in short supply in South Africa, can now be awarded to other projects, and those of Karpowership and the other bidders are no longer guaranteed access if they proceed.
ACWA Power Co. is one of the successful bidders that’s yet to announce whether it’s achieved financial close. Scatec ASA is proceeding with three solar power projects to supply 150 megawatts.
Karpowership didn’t immediately respond to a request for comment.
The four projects that have lost preferential access to the grid were initially supposed to reach commercial close at the end of July 2021.
Following the issuing of the original budget quotes in 2021, the IPP Office (IPPO) announced several postponements of their scheduled commercial close dates.
“Consequently, several budget quote validity period extensions were requested by customers and Eskom duly considered these requests and granted extensions,” Eskom said.
But in July 2023, the IPPO indicated that the projects’ long stop date for commercial close was fixed at 31 December 2023 and budget quotes’ validity periods were further extended to 31 December 2023 to enable these projects to reach commercial close.