Eskom pivots towards renewable energy with new solar power procurement initiative

Eskom has shifted its focus from merely addressing the crippling issue of loadshedding to positioning itself as a sustainable and competitive player in the energy market.

In a bold move, Eskom on Tuesday announced the launch of its first Renewable Energy Offtake Programme, inviting large power users to submit bids for the procurement of 291MW of solar photovoltaic (PV) capacity.

This initiative forms part of a broader strategy aimed at transitioning Eskom's generation mix away from its coal-dominated past towards a more diverse blend that includes a growing share of renewable energy sources by 2040.

The acceptance of bids comes on the heels of the South African government's approval of six large-scale solar plants, totalling nearly 1.3GW, under the seventh bid window of its national renewable energy procurement programme.

This momentum signals a significant commitment from both the public and private sectors towards a greener future.

"Just over a year into our turnaround strategy, we are not only focused on ending load shedding but are also pivoting Eskom into a sustainable and competitive company while ensuring security of supply through a customer-centric approach," said Eskom CEO, Dan Marokane.

This shift exemplifies Eskom's comprehensive strategy to incorporate additional renewable energy into its power generation portfolio.

Under the newly announced Request for Proposal (RFP), individual projects must have a minimum capacity of 10MW to qualify, with bidders invited to propose Power Purchase Agreements (PPAs) ranging from five to 25 years.

This flexible procurement approach allows businesses not only to meet their energy needs but also to comply with global sustainability standards, thereby enhancing their competitiveness in a rapidly changing energy landscape.

Eskom’s initiative was shaped by an Expression of Interest (EOI) process, which highlighted the strong demand for direct energy contracting among commercial and industrial customers.

"This is the next step in the focused execution of our strategy to integrate additional renewable energy into the grid, in line with global electricity industry trends for environmentally sustainable solutions that support broader decarbonisation objectives.

"We have seen strong interest in Eskom’s capabilities in green energy supply, which this programme demonstrates." 

Successful bidders are expected to enter into phased PPAs for renewable energy sourced from multiple Eskom projects.

The first projects are projected to commence commercial operations by December 2027.

Furthermore, Eskom stateed that it intended to accelerate the development of a balanced energy mix, including coal, nuclear, gas, renewables, and innovative energy storage solutions like Battery Energy Storage Systems and pumped hydro options.

Eskom Distribution acting group executive, Agnes Mlambo, said this programme demonstrated the utility's commitment to innovation and building a cleaner, more resilient energy future.

"By offering customised renewable energy offtake solutions, we are enabling our customers to transition to low-carbon operations while ensuring a secure and competitive supply, through customer-centred solutions," Mlambo said.

"Engaging with the private sector in this structured manner gives impetus to Eskom’s efforts to create a sustainable pathway for clean power integration into the grid." 

In pursuit of its ambitious goals, Eskom is establishing a dedicated renewable energy business aimed at delivering 2GW of construction-ready projects by 2026, ultimately scaling up to a remarkable 32GW, inclusive of green hydrogen, by 2040.

This marks a transformative step for both Eskom and South Africa’s energy landscape as the nation embraces a sustainable future.

BUSINESS REPORT