South Africa is forging ahead with a plan to create a new state-owned power company by converting three coal-fired plants into gas-burning generators to ease the nation’s energy crisis.
State power utility Eskom Holdings SOC Ltd. generates most of South Africa’s electricity and has subjected the country to rolling blackouts since 2008 because its old and poorly maintained facilities can’t keep pace with demand. The proposed new company, dubbed Generation 2, will take over the three plants that are set for decommissioning, according to Energy, Minerals and Resource Minister Gwede Mantashe.
“If we re-purpose them into gas power stations, we will save a lot of life in South Africa in terms of energy. It is urgent to create the company. The ministry plans to invite engineering firms to study the plants and offer advice, Gwede Mantashe. said in an interview in his office in Pretoria.
South Africa has struggled to boost generation. At least five rounds of bids for renewable power projects haven’t added sufficient capacity, while an emergency plan to add electricity is mired in legal wrangles. A new state electricity company is yet another attempt to find a solution to the crisis that has hampered economic growth in Africa’s most-industrialized nation.
Mantashe’s plans envisage the new utility taking over the ageing Hendrina, Grootvlei and Camden power plants, which have a combined generation capacity of 4,800 megawatts.
However, the idea has been receiving opposition from some parties, with some saying it will never happen.
“This idea is never going to happen. The plants in question are tied into advanced funding plans with the World Bank and other funders, who would pull out under this new proposed structure. There is no agreement in government on this at all, and a new state-owned entity would not get funding from the National Treasury, nor from the market.” Peter Attard Montalto, head of capital markets research at Intellidex.
Read also; South Africa Power Cut Deepens to Worst Level Since 2019.
