COAL BASELOAD INDEPENDENT POWER PRODUCERS – STATUS OF THE POWER PURCHASE AGREEMENTS

The Centre for Environmental Rights (CER), on behalf of the Life After Coal/Impilo Ngaphandle Kwamalahle Campaign, has written to Eskom to challenge the procurement of two coal-fired independent power producers (IPPs): Thabametsi and Khanyisa. The CER argues that these projects are not 'value for money' as they would increase system costs by 19.6 billion Rand, raise greenhouse gas emissions, and risk becoming stranded assets. The letter highlights that the projects lack necessary licenses and are subject to pending High Court reviews. It requests detailed information on the status of the PPAs, the 'value for money' assessment, and compliance with the Public Finance Management Act (PFMA) and New Generation Regulations.

• The Thabametsi and Khanyisa coal IPP projects cannot reach commercial close because they lack required licenses and are subject to pending High Court review proceedings regarding their environmental authorisations.
• The coal IPPs are estimated to cost South Africa an additional 19.6 billion Rand compared to a least-cost electricity system, and South Africa currently has surplus base supply capacity, making new coal capacity unnecessary for the foreseeable future.
• The proposed coal IPPs would have a greenhouse gas (GHG) emission intensity approximately 24% higher than the current Eskom fleet average and 58% higher than the Medupi and Kusile stations.
• The projects risk becoming stranded assets if South Africa meets its Paris Agreement commitments; specifically, the ERC report suggests the Kusile power station would be stranded by 2050 in a climate change mitigation scenario.
• There are significant discrepancies in employment figures provided for the projects; for Thabametsi, the Department of Energy estimates 9,183 operational jobs while the NERSA application cites 182, and for Khanyisa, the DoE estimates 4,341 operational jobs while the NERSA application cites 150.
• The CER asserts that signing the PPAs would breach the fiduciary duties of Eskom's board under the Public Finance Management Act (PFMA), as the projects do not satisfy 'value for money' requirements.

APA

Centre for Environmental Rights (2018). COAL BASELOAD INDEPENDENT POWER PRODUCERS – STATUS OF THE POWER PURCHASE AGREEMENTS. https://cer.org.za/wp-content/uploads/2018/09/CER-Letter-to-Eskom_7-Aug-2018-1.pdf?x21779

Chicago

Centre for Environmental Rights. COAL BASELOAD INDEPENDENT POWER PRODUCERS – STATUS OF THE POWER PURCHASE AGREEMENTS. 2018. https://cer.org.za/wp-content/uploads/2018/09/CER-Letter-to-Eskom_7-Aug-2018-1.pdf?x21779.

Wikipedia

{{cite press release |author=Centre for Environmental Rights |title=COAL BASELOAD INDEPENDENT POWER PRODUCERS – STATUS OF THE POWER PURCHASE AGREEMENTS |date=7 August 2018 |url=https://cer.org.za/wp-content/uploads/2018/09/CER-Letter-to-Eskom_7-Aug-2018-1.pdf?x21779 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{centreforenvironmentalrights2018coal, author = {{Centre for Environmental Rights}}, title = {{COAL BASELOAD INDEPENDENT POWER PRODUCERS – STATUS OF THE POWER PURCHASE AGREEMENTS}}, publisher = {Centre for Environmental Rights}, year = {2018}, month = aug, url = {https://cer.org.za/wp-content/uploads/2018/09/CER-Letter-to-Eskom_7-Aug-2018-1.pdf?x21779}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }