Eskom has published a request for proposals (RFP) to allow private operators to lease land around its coal-fired power stations to build solar farms to supply the grid with electricity.

Under Eskom’s plan, the state-owned company will lease parcels of land in Mpumalanga – home to many of its coal-fired power stations – so that private power producers can build renewable energy capacity at these sites.

“The commercial process is based on auctioning suitable land at or near power stations for the development of renewable electricity generation sites, with the evaluation process favouring quick delivery of additional generation capacity to the system,” Eskom said in a statement on Tuesday.

The publication of the RFP comes after public enterprises minister Pravin Gordhan announced in December that Eskom would make large tracts of land it owns in Mpumalanga available to investors wanting to build private power generation plants.

Eskom has 89 000 acres of land in the province, little of which is being utilised. The idea is to make this land available, on a rental basis, to the private sector to build renewable energy facilities, Gordhan said.

“This initiative is intended to allow investors accelerated access to our existing grid, and to enable investment in renewable energy next to our coal-fired power stations, to demonstrate our commitment to be part of the ‘just energy transition [to renewables],” said Eskom CEO André de Ruyter in a statement on Tuesday.

The publication of the RFP comes as Eskom once again struggles to keep the lights on due to a shortage of generating capacity at its ageing and unreliable coal fleet.

20-year lease

“The maximum amount of electricity generation capacity per project will be capped at 100MW to make use of the recently promulgated upper limit for embedded and own generation, and the lease will be for a minimum period of 20 years,” Eskom said. The land will remain the property of Eskom for the duration of the lease.

Eskom explained that recent legislative amendments allow power generators to “wheel” electricity through the transmission grid, subject to wheeling charges and connection agreements.

“Investors will be able to enter into bilateral agreements with customers, on terms that they agree, while Eskom will provide the transmission infrastructure to evacuate the electricity. This arrangement is a precursor of the electricity market that is enabled by the legally separated transmission company,” De Ruyter said.

“It is estimated this programme could add further generation capacity, estimated at up to 4GW, to the national grid over the next few years,” Eskom said. “The key objective for the leasing of land initiative is to provide relief to the constrained electricity system in as short a time as possible. Among these is the need to bring relief to the system by adding as many megawatts as possible in the shortest possible time, thus increasing the ability to do maintenance, reducing load shedding and the usage of open-cycle gas turbines.”