Eskom extends Short Term Power Purchase Proposal deadline

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.