Eskom insists that it is processing budget quotes for independent power producers (IPPs) seeking to connect to the national grid, in line with agreed timelines, and that it is making every effort to debottleneck the process so that much-needed new generation capacity can be introduced speedily.

COO Jan Oberholzer indicated during a load-shedding briefing that the utility was seeking clarity from both the IPP Office and the Department of Mineral Resources and Energy regarding recent statements indicating that financial close on 25 wind and solar projects had been delayed from the end of April to accommodate the issuing of budget quotations by Eskom.

In a note published on April 28, the IPP Office stated: “In line with Eskom timelines for the issuing of budget quotations, the first 14 projects are scheduled to achieve financial close by the end of July 2022, while the remaining 11 projects are expected to achieve financial close by the end of September 2022”.

Distribution GM Agnes Mlambo added that Eskom’s records indicated that it remained on schedule and “aligned to the timelines that we agreed with the IPP Office”.

She noted that most of the grid connections arising from Bid Window 5 (BW5) of the Renewable Independent Power Producer Procurement Programme were in the form of self-build projects, but that Eskom still needed to approve the designs.

“If all the information is submitted on time, and there are no delays from Eskom’s side, we are still on course to approve on time and be aligned to those timelines.”

Eskom told Engineering News separately that the alignment between IPP applications and grid connection capacity availability was a key concern.

"It appears that many IPPs are focusing at the Northern Cape where grid capacity is becoming a challenge," Eskom said.

However, it also insisted that, where for budget quotes were paid on time and where designs were submitted on time, it had delivered in line with agreed timelines.

CEO André de Ruyter, who has been calling for the urgent injection of up to 6 000 MW to decrease pressure on the load-shedding-prone network, said Eskom has “absolutely no incentive to delay the issuing of budget quotes” and had also beefed up the capacity of its grid access unit, which had historically handled very few applications.

However, he also stressed that a budget quote represented a binding commitment that could be made only once the designs were approved.

“In some instances, the IPPs do not provide sufficient information for our engineers to complete their designs as quickly as the IPP would expect.

“So, there are inefficiencies in the process from that perspective, and we can’t willy-nilly give budget quotes based on inadequate information because, eventually, we as an organisation have to pick up the tab.”

De Ruyter said the utility was making every effort to ensure it was not the bottleneck and made an appeal for IPPs to approach Eskom directly to address any problems rather than venting frustrations anonymously on social media.

He also stressed that Eskom executives had a fiduciary duty to ensure that the power purchase agreements (PPAs) arising from procurement processes, such as BW5 and the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), were not onerous.

Financial close for the RMIPPPP projects has been shifted four times and DMRE director-general Jacob Mbele told lawmakers this week that the new date was now the end of May.

“We certainly have no aspiration to be declared delinquent directors by signing contracts that contain provisions that may be onerous in future years.

“Therefore, we do take a lot of care to ensure that, when those PPAs are signed, they meet the requirements of good corporate governance and that we can hand on heart go to the shareholder and say that as a board we have done our duty towards the entity.”

Controversial matters, he added, could take some time to resolve, but “we really would like to make sure that these agreements, which are more than 20 years in duration, are done properly and that we don't have any comebacks afterwards”.

De Ruyter also stressed that while the most recent delays might be adding months to the process, they would not delay projects by years, as had been the case when Eskom refused to enter into new PPAs and effectively halted any new procurement from 2014 until the launch of BW5 in 2021.

“And that's the real problem - that is why we now face a constraint,” he said, indicating that the recent State Capture report provided some indication as to the reasons behind the decision of “some of my predecessors” to delay the procurement process.

Eskom, De Ruyter added, had a constructive relationship with the IPP Office and there was an agreement regarding a new target date for the conclusion of the PPAs.

“I understand that people want to see capacity on the grid.

“We are not trying to frustrate the process or delay the process, but we cannot jettison our fiduciary duty to the organisation.

“We are all working very hard, and we are making very good progress, so I really don't want to engage in a round of finger pointing.

“Let's rather concentrate on getting those agreements done and dusted as soon as possible so that we can get the capacity on the grid.”