Nersa considering four near-term IPP contracts worth 413,5MW

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The National Energy Regulator of South Africa (Nersa) has confirmed that it is currently considering four separate power purchase agreements (PPAs) concluded between State-owned power utility Eskom and independent power producers (IPPs), involving a total of 413,5 MW.
Nersa tells Engineering News Online companies include: energy and chemicals group Sasol, which is installing gas turbines at Secunda, in Mpumalanga; a little-known company called Tangent Mining, which reportedly has power-production potential in the Free State; paper and pulp group Sappi, which has cogeneration prospects in KwaZulu-Natal; and Bethlehem Hydro, a microhydropower plant, also in the Free State.
Eskom recently confirmed the finalisation of power-purchase agreements (PPAs) under its medium-term power-purchase programme (MTPPP), which sets a ceiling selling price of 65c/kWh.
Systems operations and planning head Kannan Lakmeeharan has also indicated that a total of six MTPPP programmes, with five separate IPPs, are at various stages of development and that the first PPAs could yield between 200 MW and 300 MW by July this year.
“Hopefully, the full 400 MW will be operational by March next year,” Lakmeeharan said.
Nersa is currently considering the first four PPAs and has confirmed with Engineering News Online that a determination will made, “once all processes have been completed”.
Nersa spokesperson Charles Hlebela says that, for 2010/11, it is anticipated that at least 185 MW will be brought on line, with the full 413,5 MW to be operational by 2012/13.
“However, we still expect to receive more applications under MTPPP,” he added.
Under the recently approved multiyear price determination for 2010 to 2013, Nersa set aside a specific revenue requirement for the MTPPP capacity, most of which will be cogeneration capacity, and a further 1 000 MW associated with the renewable energy feed-in tariff, or Refit.
However, Eskom is convinced that there is potential for a further 1 000 MW to 3 000 MW worth of cogenerated, or own-generated, electricity within the medium term, while the potential for renewable energy was even more material, but would entail longer lead times.
However, the PPA guidelines for the Refit projects still have to be published, while a cogeneration feed-in tariff regime is also not in place, having only been mentioned as a possibility.
Much will also hinge on the final content of the second integrated resource plan, or IRP2010, which will provide a rolling, and reviewable, generation-mix framework for the next 20 years.
Consultation has begun on the IRP2010, which should lead to the publication of a draft document in the next month. A public participation programme is expected to follow and the final IRP2010 should be published by September.
Engineering News

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