Where is the wind blowing?
RENEWABLE energy bodies have appealed to new Energy Minister David Mahlobo to keep the promises of his predecessor and sign outstanding Power Purchase Agreements by the end of this month.
The South African Photovoltaic Industry Association (Sapvia) said the removal of two energy ministers in less than a year created huge uncertainty in the renewable industry and would make international investors think twice before investing.
Sapvia said the issue is less about who is at the head of the energy ministry but rather whether they are able to restore a degree of certainty to an industry that has been plagued by delays and “flip-flopping on policy”, following last week’s cabinet reshuffle.
President Jacob Zuma appointed the former minister of state security, David Mahlobo, as energy minister. Mahlobo replaces Mmamoloko Kubayi, who has been redeployed to the communications ministry.
In March, her predecessor Tina Joemat-Pettersson was axed from the position.
In September Kubayi announced that Eskom would sign the PPAs this month.
“The delay in signing the outstanding Power Purchase Agreements (PPAs) with Renewable Energy Independent Power Producers (IPPs) has done considerable damage to the renewable energy industry in South Africa and we urge minister Mahlobo to proceed with the commitments to sign PPAs by the end of October,” Sapvia said.
The failure to sign these agreements undermined the prioritisation of green energy, they added.
According to the body, there are 26 preferred bidders across a range of technologies, but none have reached final agreements relating to the contracts due to Eskom not yet signing further agreements.
“These projects represent a combined value of R50bn in investment in the country that has been put on hold. The total number of jobs expected during the construction period of these projects is 13 444 and the number of jobs for South African citizens during the operations period is expected to be 1 909 per year,” Sapvia said.
The South African Wind Energy Association (Sawea) said the reshuffle was yet another disruption for the energy sector.
Sawea chief executive Brenda Martin said: “The need for South Africans to unite around national interest is higher than ever. This is particularly true for issues of energy.
“Key decisions are being made around our nation’s long-term energy sector investments. The need for stability and accountability is particularly high at this point in time.
“The previous energy minister set a second deadline for PPA (signing), of October 28, but now… just 11 days before this second deadline, another cabinet reshuffle is announced.
“South Africa can ill afford the growing job losses, dwindling investor confidence and further delay in rural socio-economic benefit of any further delay.”
The Department of Energy said Mahlobo would first need to receive an official handover briefing from Kubayi as well as detailed briefings from the department’s management tier on matters relating to the programmes, including urgent issues like the signing of PPAs.
Eskom said it had an instruction that only Mahlobo may comment on the signing.
SA can ill afford growing job losses and that of investor confidence