- Eskom will provide 6,184 hectares of land to 4 IPPs for them to build up to 2 GW new renewable energy capacity around its existing power stations
- HDF Energy, Red Rocket, Sola Group and Mainstream Renewable Power will now conduct feasibility studies to decide which technology do they wish to install
- Power generated will be wheeled across the Eskom grid to buyers under bilateral agreements with developers
South Africa’s sole electricity utility Eskom has signed 1st batch of land lease agreements with 4 independent power producers (IPP) to bring online around 2 GW of clean energy capacity to the grid within next 24 months to 36 months around Majuba and Tutuka power stations in Mpumalanga province.
The 4 successful bidders for these land lease agreements were identified as HDF Energy South Africa (Pty) Ltd, Red Rocket SA (Pty) Ltd, Sola Group (Pty) Ltd, and Mainstream Renewable Power Developments South Africa (Pty) Ltd.
In all, the agreements have been signed for 6,184 hectares of land with a duration of 25 years to 30 years each. Winners, selected through a competitive selection process, will now carry out comprehensive feasibility studies to determine which clean energy technologies they will implement on the land secured out of wind, solar, and battery storage.
Power generated by these projects whose exact capacity will be determined post feasibility studies, will be sold on bilateral basis to customers under direct power purchase agreements (PPA). However, it will be wheeled across the Eskom grid. This way, the utility will be able to make money out of its existing assets.
Eskom termed this as an innovative step to find the ‘quickest way possible and within our scope of influence to boost the country’s generation capacity’. These are estimated to bring in SAR 40 billion investment to the awarded lands that are traditionally associated with coal-fired electricity generation, it added.
“Eskom’s land leasing program is a first of its kind and can be used as a case study in the electricity supply industry (ESI) in terms of partnering with private electricity generators to accelerate the connection of additional capacity to the national grid to improve the reliability of supply,” said Eskom Group Chief Executive André de Ruyter.
Going forward, the state-owned utility will offer properties around Kendal and Kusile power stations in Mpumalanga, as well as the retired Ingagane Power Station in Newcastle, KwaZulu-Natal for the next phase of land lease agreements. Winners will be selected via a competitive process to be launched in the coming months. In all, Eskom plans to give up to 30,000 hectares of land for similar projects.
Main objective behind the land lease agreements is the ‘dire need to alleviate pressure on the system by adding as many MWs as possible in the shortest possible time, thus increasing Eskom’s ability to conduct maintenance at its existing fleet, reducing loadshedding and the usage of open cycle gas turbines (OCGTs)’, added Eskom.