IPPs can produce cheaper power - CIC

| Thursday March 18, 2010 00:00

CIC Energy representative Tore Horvei said on Wednesday  that it is important that South Africa had to level the playing field and to get the different frameworks right to enable IPPs to enter the electricity market.

While government had recently announced that it would be moving away from Eskom as the single-buyer of electricity and towards an independent systems operator, Horvei noted that the process was convoluted and that this would likely only happen in the longer term.

Further, Horvei and Independent Power Producers Association GM Doug Kuni highlighted that it was important for IPPs to deal with the misconception that independently produced power would be more expensive than Eskom-generated power. 

To that end, Eskom would have to be transparent in terms of all costs associated with its power plants and to openly share information on the real cost of electricity in South Africa with the public.

Kuni added that investment by IPPs had to be preceded with a friendly regulatory environment. At present there were vacuums in South Africa's policy and regulation, which would have to be plugged before IPPs would want to invest more in the local industry.

Meanwhile, Omnicane Thermal Energy sustainable development coordinator Rajiv Ramlugon noted that it was possible for IPPs to play a bigger role in a country's energy sector than just providing back up power.

He explained that in Mauritius, where Omnicane was based, 60% of the country's electricity was produced by IPPs.He highlighted that the majority of electricity was being produced from sugarcane and bagasse and some from coal.To that end, it was one of few countries in the world that has managed to reach a level where 20 percent of its electricity was produced from renewable energy, said Ramlugon.

The country would aim to boost this figure to 35% by 2035, through further wind and solar photovoltaic projects. However, it would need to attract more IPPs and a feed-in-tariff framework to achieve this.(Engineeringnews)