Andre de Ruyter, CEO of Eskom , said that while he is in favour of allowing companies generate their own power, there will be significant initial costs if they are to sell their excess generation into the South African grid.
Mining and industrial companies have been frustrated by regular power cuts, and have been pushing the Government to allow them to build their own power plants to ensure security of supply. They also want to sell surplus power to other customers.
The Government has said that Eskom will eventually be split into generation, transmission, and distribution divisions. De Ruyter said: “There is about $1.2 billion that must be invested in order to accommodate the entry of IPPs into the grid. Somebody needs to pay for that, and it can’t be Eskom without recovering that cost in one way or another.” He said that the entry of private power producers into the industry would enable Eskom to carry out more maintenance on its ageing plants, and allow it to replace plants that are due to close.