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Zuma reaffirms commitment to invest in renewables

Publish date: 14 February 2017
Issue Number: 495
Diary: Legalbrief Environmental
Category: Energy

The announcement that Eskom will sign the outstanding Renewable Energy Independent Power Producer Procurement Programme (REIPPP) sends a strong message to investors that the renewable energy industry is very much open for business. According to a Fin24 report, the SA Photovoltaic Industry Association (Sapvia) was reacting to President Jacob Zuma's State of the Nation Address last week. ‘We now hope that Eskom heeds the President’s commitment to finalise these agreements and the Minister moves ahead with the announcement of the expedited round,’ Sapvia said. It represents more than 170 players in the renewable energy sector. Zuma committed to SA’s continued investment in renewable energy as part of its overall energy mix. The report notes that Eskom has for months refused to issue final budget quotes to preferred bidders in Round 4 and the Round 4 extension of the REIPPP. The SA Renewable Energy Council (Sarec) also said it is pleased with the President’s clear support for the country’s Renewable Energy Procurement Programme (REI4P). ‘Some of the serious economic effects of the recent pause in SA’s renewable power procurement programme such as factory closures and job losses have caused serious hardship for this fledgling industry. We trust that there will now be rapid movement to resolve the impasse in line with the President’s directive,’ said Sarec chair Brenda Martin.

Full Fin24 report

See also a Moneyweb report

See Analysis

Worryingly though, Eskom has maintained its stance that it would sign new power purchase agreements with renewable energy independent power producers (IPPs) only if these were within an ‘acceptable affordability range’. A Cape Times report notes that this comes in the wake of Zuma’s announcement that Eskom would sign the outstanding power purchase agreements for renewable energy ‘in line with the procured rounds’. The report says Zuma appeared to be cracking the whip amid raging uncertainty about the programme which has resulted in investments worth approximately R200bn since 2011, according to Sarec. But Eskom spokesperson Khulu Phasiwe on Friday reiterated the utility’s stance that it would only commit to new agreements if these were affordable. ‘We will sign (the power purchase agreements) on condition that there will be no negative bearing on Eskom and the consumer,’ said Phasiwe. Sapvia said it hoped that Eskom would heed Zuma’s comments and finalise the outstanding agreements.

Full Cape Times report (subscription needed)

See also a Daily Dispatch report (subscription needed)

SA’s fledgling wind turbine service technician training programme will be ‘skilling its graduates for unemployment’ if construction on the next round of state-commissioned wind farms doesn’t begin within this year. According to a report on the Energy site, this is the warning from Naim Rassool, director of the SA Renewable Energy Technology Centre at the Cape Peninsula University of Technology in Cape Town. Rassool says the domestic job market for wind turbine service technicians will soon become saturated, leaving graduates unable to find employment locally. It will also jeopardise the future of this training centre, one of only ‘five or six globally’ that has a 2.5 megawatt (MW) wind turbine housing and associated components, supplied by manufacturer Nordex Wind Power, on site for training purposes. While about half of the plants that have been commissioned by the state as part of the REIPPP since 2011 are now operational, construction on the next batch of 26 plants, including solar and wind sites, is on hold.

Full report on the Energy site