Eskom on Friday signed lease agreements with investors behind private power producers for the construction of renewable energy plants on the state-owned utility’s land in Mpumalanga.

The successful bidders are HDF Energy South Africa, Red Rocket SA, Sola Group and Mainstream Renewable Power Developments South Africa. The companies will deploy a mix of solar, wind and battery storage technologies.

This is the first batch of such agreements to be signed and consists of land parcels around the Majuba and Tutuka power stations, it said.

The new facilities will be connected to the grid within two to three years of their financial close, with the projects still subject to environmental, land zoning and other regulatory approvals.

The signing of the agreements on Friday comes after Eskom issued a request for proposals in April in an effort to boost electricity generation capacity in South Africa through the construction of renewable power generation facilities by the private sector.

“Investor appetite for land with grid connection was demonstrated by the fact that the bids were three times oversubscribed, offering a good indication that further land parcels will receive favourable consideration,” Eskom said in a statement.

The investors will lease a total of rougly 15 000 acres of land for 25-30 years each and contribute an estimated 2GW to the national grid.

Quarterly tenders

“Eskom will be issuing new tenders for other parcels of Eskom land every quarter going forward, with a view to enabling and accelerating investment in new renewable generation capacity,” it said.

The first batch of successful bidders will now conduct “comprehensive feasibility studies to determine which technologies they will be implementing at each site — wind, solar and battery storage”.

“The exact generation capacity will only be known once the studies have been completed. The bidders will sell the electricity on a bilateral basis to customers that will sign power purchase agreements with the developers. The electricity will be wheeled across the Eskom grid, generating revenue for Eskom from its existing assets. No national treasury guarantee will be issued … and there will be no risk to or burden on taxpayers or on Eskom.”

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Eskom plans to make more land available around its power stations.

The next phase of the project will focus on properties around the Kendal and Kusile power stations in Mpumalanga, as well as the retired Ingagane power station in Newcastle in northern KwaZulu-Natal. “These parcels will be offered to the market in the coming months,” Eskom said. – © 2022 NewsCentral Media