A VICTIM OF circumstance is the term commonly applied to IPSA – the luckless independent power producer (IPP) whose most recent interim losses are yet another illustration of the lack of decisiveness exhibited by Eskom in getting IPPs on board. As disheartening as its interim figures were – accompanied by the following comment by chairman Richard Linnell: “The way forward for the private power sector in SA continues to remain unclear” – there is a small ray of hope for IPSA.
South Africa’s integrated resource plan (IRP) will open some doors for IPPs. That’s provided plans to build capacity in Government to take care of IPPs and the regulatory environment go ahead, says Marc Goldstein, energy analyst at consulting firm Frost & Sullivan.
IPSA has lost 40% of its share price value on the JSE alone (the company is also listed on London’s AIM market) and is running out of cash to develop its planned power projects in the Eastern Cape. In one respect, IPSA’s misfortune has also been a product of bad timing. The company finished building its only plant in SA – KwaZulu-Natal’s Newcastle Cogeneration (NewCogen) – before signing a purchasing power agreement (PPA) with Eskom. “IPSA came into SA with a European perspective, where power is provided at any cost. In SA we’re happy to have the lights go out,” says Goldstein.
NEWCASTLE COGENERATION PLANT