Question NW3003 to the Minister in The Presidency for Electricity
04 January 2024 - NW3003
Graham, Ms SJ to ask the Minister in The Presidency for Electricity
(1) With respect to the contractual relationship with Mozambique for the provision of electricity to the Republic, what (a) quantity of MWs (i) has Mozambique undertaken to provide to the Republic and (ii) is the Republic currently using and (b) are the terms of the agreement in respect of the (i) period, (ii) pricing matrix and (iii) other material elements of the agreement; (2) Whether the Republic uses the full allocation in terms of the agreement; if not, what are the reasons for the underutilisation of electricity in the midst of the loadshedding crisis; if so, what are relevant details?
Reply:
(1)-(2) (1)-(2) We have received an offer of between 80-100 megawatts from Mozambique, Eskom is ceased with processing the power purchase agreement in terms of the current Ministerial determination for cross-broader purchases. Eskom has since issued the Standard Offer Cross Border Programme (CBSOP), in terms of which the Mozambique offer will have to be processed.
The CBSOP enables Eskom to procure energy on a short-term basis (less than three years) from the Southern African Development Community (SADC) region. This standard offer approach permits Eskom to purchase cross-border energy at an established price calculated at the avoided cost of Eskom’s own generation (including long-term energy purchases from local independent power producers). The standard offer allows for a static price, which is established each year based on the regulatory-approved cost recovery mechanism, and benchmarks the variable cost of local generation. This programme is designed to simplify the procurement of energy from existing and new facilities in the region.
Once the applicable governance processes have been concluded, the Ministry will make the necessary pronouncement.