Eskom set to renegotiate purchase agreements with IPPs

The state-owned company’s CEO Andre de Ruyter said that the move was meant to reduce the net cost to the country’s electricity consumers.

Picture: EWN

JOHANNESBURG - Eskom plans to renegotiate power purchase agreements with independent power producers (IPPs).

The state-owned company’s CEO Andre de Ruyter said that the move was meant to reduce the net cost to the country’s electricity consumers.

There have been disputes between Eskom and trade unions over the IPPs for years now.

Organised labour at Eskom may view this move as a victory on their part, following years of protests and court action over the IPPs.

De Ruyter said during a systems update briefing on Thursday that some of the financing arrangements with the producers were potentially suboptimal.

"This is something that, in particular, colleagues from organised labour have been calling for and we have done analysis on that and we believe there are opportunities for us to engage with those IPPs with a view to reducing the net cost to the South African electricity consumers."

The IPP programme was meant to allow the private sector to introduce generation technologies that were non-core functions of Eskom as electricity supply options.

However, labour and some energy experts have criticised the programme’s costing format, saying that Eskom was getting a raw deal.