Warning over big costs for private power 

New regulations for connecting large-scale private power projects to the grid in South Africa have raised concerns among investors, according to the South African Independent Power Producers Association (Saippa).  

The new rules, introduced by Eskom, require developers to meet additional criteria, such as obtaining environmental and water usage rights, securing a power buyer agreement, and collecting data on solar or wind availability. Saippa argues that these requirements significantly increase the initial investment cost for private power projects, with investors now having to spend up to 67% of the total project cost before knowing if they will get a grid connection.  

The lack of transmission capacity in certain provinces has also posed challenges, preventing completed projects from connecting to the grid. Eskom’s limited spending on transmission upgrades has been cited as a contributing factor.  

The industry urges Eskom to act independently in allocating grid resources and calls for the establishment of a dedicated transmission company in South Africa. 

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