The Department of Mineral Resources and Energy has managed to complete its first refinancing agreement with an independent power producer (IPP), which is part of an initiative to lower electricity tariffs. The department issued a statement on Monday in which it announced that it had concluded a refinancing agreement with the ACWA Power’s Solafrica Bokpoort Concentrated Solar Power (CSP) power plant. It is part of a refinancing initiative launched by the department in October 2019. All IPPs (64 projects) of the bid windows 1 to 3.5 were invited to participate in the initiative, with the aim to reduce the wholesale price of electricity.
Eskom CEO Andre de Ruyter outlined a streamlined approach on Monday to the vertical separation of the State-owned utility into three businesses of generation, distribution and transmission, which he said could accelerate the process of establishing an Eskom-owned independent transmission system and market operator (ITSMO) without the threat of any debt default. Speaking at the release of the group’s interim results to the end of September, De Ruyter again emphasised the importance of creating the ITSMO to support much-needed generation investment by independent power producers (IPPs) and indicated that the target date for the creation of a separate transmission entity remained December 2021.
Global electricity demand is projected to fall by about 2% this year – the biggest yearly decline since the mid-twentieth century and far larger than what followed the global financial crisis in 2008/9, which resulted in a drop in electricity demand of 0.6% in 2009, the International Energy Agency (IEA) reports. In its inaugural ‘Electricity Market Report’, published on December 14, the IEA states that the contraction in demand this year is a result of the Covid-19 pandemic and its impact on economic activity.
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