Independent power producers (IPPs) organise to take on Eskom
If Eskom cannot run a simple business of supplying efficient and affordable power to the people, I believe the whole electricity generation sector should be opened up to the private sector – just like the cellular phone and broadcasting industries. Eskom should just be one of the players with no authority.
In light of the current constenation about Eskom’s pending 145% tariff increase, I dusted up a recent interview with Doug Kuni, managing director of the South African Independent Power Producers Association (SAIPPA) by Chris Yelland, managing director of EE Publishers.
In this interview, Chris Yelland, managing director of EE Publishers, questions Doug Kuni, formerly from Eskom Generation, now a private consultant and managing director of the newly formed South African Independent Power Producers Association (SAIPPA), on the issues surrounding Eskom and IPPs in South Africa
Mr. Kuni, to what extent do you believe that South Africa needs IPPs and industrial co-generation as part of the solution to South Africa’s generation capacity crisis, and what advantages do IPPs bring?
If one looks at the future supply-side requirements of the economy of South Africa, it is clear that Eskom, on its own, does not have the resources to meet the demand. The country will need the participation of IPPs. Cogeneration is potentially a quick and effective response as there are many potential participants already in the economy. By Eskom’s own estimation, a potential of about 900 MW from industrial cogeneration exists. The advantage of IPPs is that these plants are not on Eskom’s balance sheet. Further, IPPs share risk in the transaction. When Eskom builds plant, all risk is passed through to the consumer and taxpayer. IPPs can also build and operate faster and more cost effectively than Eskom.
