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Frequently Asked Questions
​# Category​ ​Question/Issue or concers Responses​
​1 ​Overview ​What is the Grid Access Unit for IPPs and generators? ​Grid Access Unit for IPPs and generators is the unit that manages and facilitate grid access for generators and IPPs.
​2 ​Overview ​Why was the Grid Access Unit established? ​Grid Access Unit for IPPs and generators was established within Eskom in response to its strategic imperative of "keeping the lights on".
​3 ​Overview ​What is the mandate for the Grid Access Unit? ​The Unit serves as a point of contact or entry for Independent Power Producers (IPPs) grid access and its role is to service IPP customer requests. Furthermore the Unit facilitates the grid access activities and development.
​4 ​Overview ​Who can be contacted for more information? ​Please refer to Eskom Grid Access Unit Contacts link
​5 ​Application ​Where is the application form available ​Refer to Consultation & Application Process link
​6 ​Application ​To whom must the generator apply where a connection is required to a municipal network? ​The generator must apply to the applicable municipality for a grid connection.
​7 ​Application ​To whom must the generator apply where a generator is embedded in a municipal network but transmits the energy to the network of a municipal customer? ​The generator must apply to the applicable municipality for a grid connection.
​8 ​Connection ​What is the process to be followed when a generator wishes to connect to the Eskom system? ​Please refer to IPP Quotation and Connection process link
​9 ​Connection ​Will a generator be allowed to construct its own connection to the Eskom system? ​Certainly, Eskom has approved the self-build policy for construction of Distribution and Transmission assets up to 132kV and 765kV respectively. This is to afford IPPs an opportunity to seek efficiencies on costs and connection timelines.
​10 ​Contracts Agreements ​What grid connection agreements/contracts have to be entered into with Eskom? ​The applicants would have to apply and accept the indicative Cost Estimate letter, and to accept the terms and conditions of a Generator Budget Quotation from Eskom.
This leads to a Connection/Use-of-System/Operating Agreement which must be signed between the Generator and Eskom before Eskom will allow a connection and/or synchronisation of the generator to the Eskom Transmission or Distribution system.
In addition to the connection agreements, the IPP shall enter into a Power Purchase Agreement (PPA) with Eskom’s Single Buyer Office.
​11 ​Pricing ​What charges are payable by Generators for the connection to the Eskom grid? ​The charges payable are Connection Charges and Use of System (UoS) charges.
A Connection charge is payable for directly allocated costs of connecting the Generator to the Eskom system, which shall be either:
a Distribution and/or Transmission Standard Connection Charge if the connection is a standard connection and/or
a Distribution and/or Transmission Premium Connection Charge if the connection is a premium connection.
A Premium Connection Charge covers costs for a reliability of supply requested by the customer that exceeds the Eskom standard.
UoS charges are payable on a monthly basis for the use of the system and connection costs not covered by the Connection Charge.
​12 ​Pricing ​At what stage of the connection project are Connection Charges due for payment to Eskom? ​Connection Charges are payable at the time of accepting the Eskom Generator Budget Quotation.
13​ ​​Pricing ​Are there any other upfront charges that are payable for the connection to the Eskom grid? ​A Connection Charge Guarantee must be provided if payment is not made at the time of accepting the Budget Quotation. This guarantee amount will be decreased by each payment received in terms of any agreed payment schedule. A bank guarantee may be provided.
An Early Termination Guarantee may be required to cover irrecoverable expenditure incurred by Eskom in the construction of the connection to the Eskom system.
​14 ​​Pricing ​What charges are payable by Generators after they are connected to the Eskom grid? ​NERSA is currently obtaining inputs from the industry and drafting a framework for UoS charges which will comprise network charges, service charges and administration charges.
In the interim, the only UoS charges levied by Eskom are service and administration charges.
​15 ​Metering ​What arrangements must be made regarding metering when a generator embedded within a municipal area sells energy to Eskom? ​The Generator will install meters which are acceptable to the Eskom for the purposes of billing for the PPA.
Other metering and connection requirements will be specified by the municipality.
​16 ​DoE bidding process ​Where can procurement information be obtained regarding the Renewable Energy Independent Power Producer Procurement Programme (RE IPP PP)? ​This programme is being managed by the Department of Energy (DoE) and all questions related to the requirements of the bid submission as stated in the request for proposal (RFP) should be addressed directly with the DoE.
At this current phase, Eskom’ role is to provide grid connection to the IPPs to its grid and has been designated as the buyer of energy.
​17 ​IPPs Connection ​When is the first phase projects of the Renewable Energy IPPs supposed to come on line? ​Referring to the Independent Power Producers (IPPs) Department of Energy Renewable Energy procurement programme (RE IPP PP), this is being conducted over various rounds, for which Rounds 1 and 2 are in the execution phase, and the announcement of preferred bidder for Round 3 and letters of appointment were sent out to preferred bidders on the 29th of October2013.
For Round 1 a total of 1436 MW has been contracted for, and more than 6 projects have already been connected as of November 2013.
The last planned connection date for any project under Round 1 is for a concentrated solar project of 100MW capacity, which will be connecting to the Eskom Transmission grid. The planned grid connection date for that is 4 July 2014.
​18 ​IPPs Project Development ​What are the developments on the construction of these sites? Will they all come on line in time? ​Eskom is working very closely with the IPP developers, in order to ensure smooth project execution of the grid connection according to agreed schedules, and where possible, ahead of schedule. The projects are structured in such a manner as to take advantage of available resources and project-specific schedules. At the moment, most projects will connect within the contracted connection dates (although most grid connection projects have been early and some slightly behind schedule due to various reasons).
​19 ​IPP projects construction ​Can you please give an update on all of the respective sites on the building updates and deadlines? Will they meet their deadlines? ​Eskom is still committed to connect all the other projects on, or before the contracted grid connection dates. These dates are aligned with the IPP/developer project timelines and project schedules. However, some projects are a concern.
​20 ​​IPP projects construction ​If any of the sites are lagging behind deadline, by how much are they \ falling behind? ​Eskom is projecting to connect all the projects within the agreed timelines and specifications.
​21 ​​IPP projects construction ​What are the problems leading to possible delays at each site? ​At the moment the availability of material (such as steelworks) causes some delays, as well as some IPPs not complying with relevant and applicable standards, designs, codes, specifications and the Grid Code.
​22 ​​IPP projects construction ​What are the time-frames for the second and third phases of the IPPs? When will construction start and when are they supposed to come on line?
  • ​Under Round 2, the first project that will achieve grid connection date is a 8.8MW photovoltaic project, planned for 28 May 2014. The commercial operation date for this project is contracted for 6 June 2014. The last grid connection project under Round 2 is planned for 2 December 2015, which is a 140MW wind farm connection to the Eskom Distribution network.
  • A total of 1091MW has been contracted under Round 2.
  • Bid close for Round 3 was in August 2013, and the DoE has announced 17 preferred bidders for this round however the department may announce additional preferred bidders for this round.
​23 ​Renewable Energy Projects ​Are the three phases the only Renewable Energy project that are going to be launched or will there be others announced in future? ​The DoE may announce further Rounds in the current RE IPP PP.
The DoE has also issued an RFP for "small IPPs", for which 100MW is allocated for projects ranging in size from 1 to 5MW.
​24 ​Eskom tariff application ​In the tariff application to NERSA Eskom requested a 16% increase - of which 3% would have been used to pay for renewable energy. What proportion is allocated to renewables now that Eskom was only granted an 8% increase per year? ​6% - Eskom, IPP – 2%.
​25 ​Solar Power Projects ​In terms of solar power - what is the estimated of the projects that have been approved from window 1 to window 3? ​For the Department of Energy (DoE) procurement programme for renewable energy, a total of 46 solar power projects have been awarded preferred bidder status. This equals to 2,515MW of capacity which includes both photovoltaic and concentrated solar technologies; this has been awarded to various Independent Power Producers (IPPs).
​26 ​Coal fired power ​What is the cost of coal-fired power per kWh compared to solar now? ​Eskom’s average cost of electricity (all technologies) during the 2012/13 financial year was about R0,50/kWh (Source: Annual Report). It was apparent that through the competitive bidding programme of the DoE, that the prices that were bid for Solar Photovoltaic did reduce, also owing to equipment prices that have been declining from round 1 to round 3. For Round 3 the average cost of PV per kWh is R0,88. However, the direct cost of renewable energy bid into the programme, are still higher than the current average electricity cost.
​27 ​Electricity prices ​Where are the price trends headed? ​The NERSA has granted Eskom an average price increase of 8% for each of the next five years – this is the average increase that consumers will experience.
​28 ​RE IPPPP window 4 & 5 ​When are the deadlines for windows 4 and 5? ​The DoE has not yet fixed any timelines for bid rounds 4 and 5. For more information please visit the DoE IPPs website at  
​29 ​IPPs contracts ​What is the role of the independent engineer appointed in terms of the PPA? ​The IE is appointed in terms of the PPA and acts on behalf of and owes a duty of care to both the IPP and Eskom.
The IE is responsible for issuing a Facility Completion Notice to Eskom – a notice which effectively warrants that the plant has passed all the relevant/applicable acceptance tests, codes (including Grid Code compliance) and has been successfully commissioned.
N.B. This notice is issued after the plant has been successfully commissioned (and tested to be GC compliant) and the gen (asset) synchronized to the network.
N.B. The FC notice issued by the IE is solely based on the information provided to the IE by the IPP. The IE is not obliged to conduct any tests, verify or witness any demonstrations pertaining to acceptance testing and is appointed purely for commercial purposes.
30​ ​Commercial ​How does Eskom refund an IPP for the cost of building (self-build option) an asset that is subsequently shared with other customers? ​Eskom does not refund the generator for any upstream infrastructure that is self-built and is dedicated for the use of the generator.
Where the generator builds upstream infrastructure (substation) that is going to be shared by other customers then any amount repayable to the generator that funded the self-build will be determined by a commercial process. This will be calculated based on the pro-rata usage of the infrastructure.
​31 ​IPP contracts ​Can the IPP amend the Direct Agreement after discussions with their lenders or financiers? ​The Direct Agreement is a standard Agreement with the Lender of an IPP Project. The IPP may not make any changes to the content of the Proforma Direct Agreement. Standard terms must be applied across all IPPs - consistently. The IPP should simply fill in the variables/blank spaces without deleting/amending any clauses.