Amakhala Emoyeni Wind Farm.
As load shedding continues to weigh heavily on the economy, government attempts to procure more renewable energy from independent power producers to supply Eskom have run into trouble.
Due to dramatic changes in the global economic environment, the last two rounds of power procurement in which bids were solicited from the private sector are largely no longer financially viable. The bidders, which set a tariff for which energy will be bought by Eskom, are based on an estimate of input costs. Once bidders are selected, they are bound by the price they offer.
But with large increases in input costs, many projects are unlikely, at this stage, to still be viable. They will therefore not reach “financial close” and will not be financed.
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