By Kopano Gumbi, CNBC Africa’s markets reporter
South Africa’s Minister of Energy, Jeff Radebe believes the process of awarding of contracts to Independent Power Producers (IPPs) has been fair and without corruption. Despite nearly three years of delays in signing off IPP contracts, the minister today said the IPP process has “earned world acclaim.”
Presently, South Africa receives just over 3,776 MW of power into the grid from renewable producers, which is less than 5 percent of the total energy sold to consumers.
The minister acknowledged that the initial cost of introducing IPPs was high but that the price has fallen through subsequent bids. IPPs have now become cost neutral to Eskom, as the cost is passed to the consumer.
After months of consistent power, Eskom has had to reintroduce load shedding in December and again in February, after seven generating units went down. Minister Radebe however, said that without IPPs, load shedding would have been worse.
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