Eskom extends Short Term Power Purchase Proposal deadline

14 April 2020

Electricity utility Eskom has extended the
deadline for responses to a request for proposals (RFP) to participate in its Short-Term
Power Purchase Programme (STPPP). Owing to the imposition of a 21-day lockdown
in South Africa in response to the Covid-19 pandemic, the initial deadline of
April 30 has been extended to May 11.

Having halted the STPPP programme in 2017,
Eskom reintroduced it when it was forced to declare stage 6 load shedding last
December. Through the STPPP Eskom intends contracting with those South African
or regional entities able to supply short-term power, at an affordable rate, so
as to reduce a supply gap that had developed as a result of poor production
rates at its new coal-fired power stations, as well as its under-maintained
coal fleet.

Whilst Eskom is still completing its analysis
of the potential impact the COVID-19 pandemic will have on demand post-
lockdown, it is clear that supply will not meet demand. Eskom is in need of
inexpensive, short-term supply solutions. This explains why the bidders must
demonstrate a commercial operation date of no later than 31 December 2020, with
power purchase agreements limited to 36 months.

Once bids are received on May 11, Eskom will
evaluate the offers and seek board approval to enter into negotiations with
potential suppliers. Contracts are, thus, not likely to be signed until
mid-June at the earliest.

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