South Africa's Eskom sends force majeure notices to wind farms

By Alexander Winning

JOHANNESBURG (Reuters) - South African state utility Eskom has sent force majeure notices to independent wind farms, saying it could curtail their supply to the national grid as electricity demand plummets during a nationwide lockdown to combat the coronavirus outbreak.

Eskom is mired in a financial crisis and has struggled to keep the lights on over the past year.

It normally buys power from solar and wind farms to supplement its own mainly coal-derived generating capacity.

But power demand has fallen by up to 9,000 megawatts (MW) since a lockdown started on Friday as most businesses have closed and power-hungry mines and furnaces have suspended operations.

Eskom spokesman Sikonathi Mantshantsha said the utility could curtail the supply from 22 operational independent wind farms to the grid "for a few hours a day during the next few days, perhaps until the lockdown is lifted".

"Most of them are able to feed power into the grid in the early hours of the day. That coincides with the lowest demand period. And we now have a lot more capacity than needed," he added. The wind farms have a combined capacity of around 2,000 MW.

Wind industry association SAWEA said it was seeking legal advice on whether lower demand linked to the lockdown constituted force majeure.

It said according to agreements in place wind farms should be paid "in line with the philosophy that all power ... generated is paid for".

Eskom has relatively little of its own flexible generation capacity that can be ramped up or down easily.

The government has committed to buy up to 200 billion rand ($11.1 billion) of electricity from independent power producers (IPPs) and has issued state guarantees for those purchases.

Eskom said wind farms would be compensated for every day or part-day of lost production. "This will ensure that none of the wind IPPs are worse off than before the force majeure," it said.

It added that it had doubled its maintenance plans because of the low demand, which should make its generators more reliable when the lockdown ends later this month.

($1 = 17.9886 rand)

(Editing by David Goodman, Kirsten Donovan)

2020-04-02 09:41:10

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