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Relief as govt confirms imminent signing of renewables deals

Energy minister Mmamoloko Kubayi.

Energy minister Mmamoloko Kubayi.

Energy minister Mmamoloko Kubayi today revealed that outstanding power purchase agreements (PPAs) for renewable energy will be signed by the end of October 2017.

This comes as a relief to the renewable energy industry following several frustrating delays in the signing these deals.

Eskom and independent power producers (IPPs) have been at a standstill over the signing of new PPAs for some years now.

There have also been suspicions that the continuous delays in the signing of new deals was a deliberate ploy by the power utility to sign a nuclear deal which has so far been shrouded in secrecy.

Industry body the South African Wind Energy Association (SAWEA) says it is "very pleased to have received confirmation from the energy minister".

SAWEA points out that Minister Kubayi's announcement has provided much needed policy certainty and evidence that the country's Renewable Energy Procurement Programme (REI4P) remains part of government's vision for SA's development in the context of transition toward a more diverse energy mix.

"Minister Kubayi's announcement today sends an important signal, particularly to those who recognise the contribution that renewable power is able to make to South Africa's economic growth," says Brenda Martin, CEO of SAWEA.

"The thousands of South Africans employed by the renewable energy industry, the many rural communities surrounding current and prospective wind farms who have been waiting for the development benefits associated with renewable power investment, are without doubt heartened by the confirmation that preferred bids from Rounds 3.5 and 4 will be concluded within two months."

According to SAWEA, the delayed projects represent a combined value of R58 billion in investment and the creation of over 15 000 jobs, at a time when the country desperately needs economic stimulus.

"Now we can all focus on realising the jobs, investments and developmental objectives intended by the Department of Energy when it initiated our country's utility scale renewable programme. We are keen to work with the Department of Energy to address socio-economic concerns," Martin adds.

Another industry body, the South Africa Photovoltaic Industry Association (SAPVIA) also welcomes the announcement by Kubayi, saying this will move forward and the outstanding PPAs.

This will bring much needed investment, secure current jobs and manufacturing investments in the sector, and create new jobs and opportunities for communities surrounding these projects, says SAPVIA.

By confirming dates for the financial close of the Round 3.5 and Round 4 projects, government is sending out a signal that indeed, as President Zuma stated last week "South Africa is open for business", says the organisation.

It points out that the delays in the programme have endangered long term investor confidence, investment and more specifically job creation and retention in this market.

"The signing of the PPAs will fast track the delivery of employment opportunities, local manufacturing opportunities, social development programmes and the benefits of community ownership, all of which are common features of all REIPPPP projects,"  says SAPVIA in a statement.

"The announcement sends a positive signal to the market that the government is committed to ensuring renewable energy plays its part in the future energy mix in a manner that ensures economic transformation of the sector, and ultimately broader economic participation of South Africans in renewable energy," it adds.

SAPVIA has had the opportunity to engage with the minister and her Department of Energy team positively over the last month, and "we welcome the forward movement in the REIPP Programme. We are committed to working together with the department to address issues around transformation in the sector and agree that the IRP and IEP need to be concluded.

"The signing of the PPAs will fast track the delivery of employment opportunities, local manufacturing opportunities, social development programmes and the benefits of community ownership, all of which are common features of all REIPPPP projects."


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