Energy: Unbundling Eskom good for IPPs – analyst
The push for renewables in SA continues with proposed restructuring at national energy utility, Eskom, boding well for the sector, and government increasingly embracing the technology, writes Legalbrief. SA’s plan to split Eskom into three units in a bid to get it back on track should make it easier for renewable energy plants to supply the national grid, notes aBusinessLIVE report. With Eskom in dire financial straits and straining to meet demand, the government has reverted to courting independent renewable energy producers to help power the economy. President Cyril Ramaphosa, Energy Minister Jeff Radebe and the Treasury have all recently heralded solar and wind-powered plants as the answer to meeting SA’s future electricity demands, citing falling costs and environmental considerations. The government also needs private investors to help fund new infrastructure: Eskom, which generates about 95% of the nation’s power, cannot afford to maintain its ageing coal-fired plants, never mind build new ones, and the Treasury has no cash to spare. It is imperative to make it easier for renewable energy producers to supply the national grid because financiers are becoming increasingly reluctant to fund coal-fired projects amid a global move towards more environmentally friendly forms of energy, according to Radebe. The shift will be aided by improvements to batteries and other technological advances, he said. ‘Big centralised power generation plants will disappear and be replaced by distributed generation, mini-grids and batteries,’ Radebe told reporters earlier this month. The government needs to translate its renewed enthusiasm for green power into action by swiftly finalising its energy policy and seeking bids to build new plants if the industry is to realise its full potential, according to Peter Attard Montalto, the head of capital markets research at research company Intellidex.