Revving renewables

INDEPENDENT PRODUCERS: ESKOM TO SIGN POWER PURCHASE ACCORDS

Millions of rands will be unlocked in investments. Moneyweb

New Minister of Energy Jeff Radebe confidently announced yesterday that the 27 outstanding renewable energy power producer projects (REIPPP) will be signed on Tuesday.

Radebe gave the assurance that the announcement is supported by President Cyril Ramaphosa, Minister of Finance Nhlanhla Nene and Minister of Public Enterprises Pravin Gordhan.

Eskom spokesperson Khulu Phasiwe confirmed the utility would sign the agreements on Tuesday. Phasiwe said a resolution to that effect was taken at a meeting of Eskom’s board. “Further discussions will take place between Eskom and the department of energy, but I can confirm that Eskom will sign the agreements.”

This will bring an end to a two-year delay in finalising the projects after Eskom earlier refused to sign the required power purchase agreements. It later agreed to sign, but only if the tariffs bidders agreed on with the department were capped.

Head of the department’s independent power producer (IPP) office Karen Breytenbach said Eskom’s cap of 77c/kWh “could not work” and the average tariff agreed upon across all projects was 86c/kWh in 2017 terms.

The signing will unlock R56 million in new investment from the department’s bid window 3.5 and 4 to stimulate the economy and create 61 600 full-time jobs over the next two to three years, Radebe said, adding that 95% of these jobs would be filled by South Africans.

He also announced steps to expedite the 20 projects under the small renewable programme that caters for 1MW to 5MW projects and has instructed the department to sign the two coal IPP projects and the 19 projects under the expedited bid window. These projects will unlock a further R105.7 billion of new investment.

Radebe instructed his department to facilitate the development of a gas market with local and imported resources with the related infrastructure. In this regard, he will work closely with neighbouring countries.

The REIPPP programme was hailed as the best in the world before it ground to a halt due to Eskom’s resistance. It responds to many of SA’s development goals, including rural development in some of the poorest areas and job creation. It also mobilises private sector funding for the development of economic infrastructure.

Radebe said 59% of the jobs created as a result of the projects in bid window 3.5 and 4 would be in the Northern Cape, 15% in the Eastern Cape and 13% in North West.

“In the coming months, we will deploy all our resources, coupled with the strength of our partnership with the private sector, all interested and affected stakeholders and our country partners on the continent to mobilise and optimise energy resources as a key catalyst for economic growth.”

61 600 new full-time jobs over next few years.