Eskom CEO Hits Back at Energy Ministers Accusations of Delays in Procurement of Emergency Power

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  • Eskom CEO André de Ruyter has hit back at accusations by South Africa’s Mineral Resources and Energy Minister, Gwede Mantashe, that the utility was delaying government’s procurement of emergency power. 

In an interview yesterday on local news television channel , NEWSROOM AFRICA, Mantashe accused Eskom of “toing and froing” over the Karpowership and other winning bids for the 2000MW risk mitigation emergency power procurement programme. “On the emergency procurement which we released much earlier, they [Eskom] are toing and froing. They don’t want this they don’t want that. But that capacity has been released to them,” Mantashe said.

In a live press briefing this morning, De Ruyter responded to Mantashe’s accusations. “It is a bit difficult to sign an agreement when you don’t know what that agreement looks like. This is not something that we are resisting, but we do have to have all the facts on the table.”

De Ruyter added that Eskom was yet to have sight of the final power purchase agreement from the Independent Power Producers (IPP) Office.

“Clearly this is a key element of the commercial arrangements. We would be remiss in fulfilling our fiduciary duties towards Eskom as a legal entity, if we were to enter into agreements without knowing what the key commercial terms are, that we are signing up for.”

He added that the maximum price methodology from the National Energy Regulator of South Africa (Nersa) hasn’t been finally addressed between Nersa, the IPP office and the Department of Mineral Resources and Energy (DMRE). There are some issues still to be ironed out on matters like the linking of the tariffs to currency, gas and other prices.

De Ruyter highlighted that the Risk Mitigation IPP Procurement Programme and in particular the Karpowership bids face other bigger challenges. The controversial Karpowership bid has been marred by environmental impact study non-compliance and a court battle involving a losing bidder who claims the tender was rigged. Read more

“I don’t think that Eskom is – in as far as the emergency power procurement is concerned – the party that is delaying the process,” De Ruyter said.

Mantashe on  Thursday also highlighted that the DMRE has recently awarded bids for the procurement of 2 600 MW of green power through the fifth bid window of government’s renewable energy procurement programme.

De Ruyter said Eskom was fulfilling all of its internal governance processes in relation to the fifth round of renewable procurement, despite not yet having received final documentation from the IPP office. “We expect to conclude our internal review on this by March of 2022, which is the required date for completion from our side, according to the IPP officer’s programme milestones,” he said.

De Ruyter said Eskom has no interest in delaying new capacity from coming into the grid, but it had to be at reasonable commercial terms. “I don’t have any particular desire to be designated a delinquent director by agreeing to a contract that we haven’t seen and where the commercial terms are not fully understood,” he concluded.

Author: Bryan Groenendaal


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