Friday, January 21

Eskom considers R106bn in wind and solar investment by 2030


Eskom Holdings, which supplies nearly all of South Africa’s electricity from coal-fired power plants, is considering spending R106 billion ($ 7.2 billion) on wind and solar power by 2030.

The investment plan, which Eskom could carry out on its own or in partnership, is the most detailed demonstration yet of the company’s ambition to move away from coal by taking advantage of the country’s abundant wind and solar resources.

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The state company expects to spend R61.75 billion on wind power and R44.25 billion on solar power by the end of the decade, a company presentation seen by Bloomberg shows. Some of the projects are planned at coal plant sites that are scheduled to close. Eskom confirmed the filing and costs without elaborating.

The potential investment is part of a plan previously communicated by CEO Andre de Ruyter to borrow money from development finance institutions for projects that would reduce emissions from a company that accounts for two-fifths of South Africa’s greenhouse gas production. .

While President Cyril Ramaphosa has established a commission to advise him on climate change, Eskom’s plans have been publicly opposed by Gwede Mantashe, his energy minister, who says such a transition could eliminate thousands of coal-dependent jobs.

The presentation describes three phases for investing once the funds and regulatory approvals have been obtained.

In the first phase, which would run from 2022 to 2023, 246 megawatts of photovoltaic solar energy could be built at the Arnot, Duvha, Lethabo, Majuba and Tutuka coal-fired power plants. Another 100 megawatts of solar generating capacity could be built at Komati, the first of the old power plants scheduled to shut down, and 19.5 megawatts of solar power at the Sere wind power plant site.

Concentrated solar

The second phase, which would last from 2023 to 2025, could see the construction of a 750 megawatt concentrated solar power plant at Olyvenhoutsdrift in the North Cape and 600 megawatts of PV added in Sere.

The company may also look to build 300 megawatts of wind power at Kleinzee on the northwest coast of South Africa and 200 megawatts of wind power at Aberdeen in the Eastern Cape province. Another 250 megawatts of renewable power generation capacity could be built at the sites of the decommissioned coal-fired power plants.

The third phase foresees the construction of another 2,950 megawatts of photovoltaic solar capacity between 2025 and 2030, as well as 3,100 megawatts of wind power.

Eskom already has a debt of around 400 billion rand, mainly due to an excess in the cost of construction of two coal-fired power plants. Debt from development finance institutions is generally cheaper than loans from commercial lenders.

So far, almost all of South Africa’s investment and planned investment in renewable energy has been done by private companies. Eskom has no plans for more coal plants, but is considering investing in gas and battery storage plants. The company’s annual revenue is approximately $ 13.5 billion.

© 2021 Bloomberg


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