IPP Office boss axed for ‘operational instability’ issues

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Karen Breytenbach has been removed as head of the IPP Office.
Karen Breytenbach has been removed as head of the IPP Office.

The removal of Karen Breytenbach as head of the country’s Independent Power Producer (IPP) Office was triggered by issues of “operational instability”, says government.

Yesterday, media reports said Breytenbach, who oversaw the expansion of the country’s privately-owned renewable energy projects, was asked to vacate her job.

In a statement this morning, the Joint Implementation Committee (JIC), which comprises the Department of Energy (DOE), National Treasury and the Development Bank of Southern Africa, announced its decision to ask Breytenbach to leave following issues of instability.

However, it did not disclose the nature of the “instability” at the IPP Office.

“The Department of Energy, as the chair of the JIC, requested a meeting to address issues that were creating operational instability at the IPP Office. These matters had a negative impact on the IPP Office and if unresolved as a matter of urgency, had potential to destabilise operations and affect personnel negatively,” the JIC says.

Unanimous decision

The JIC says it had unanimously agreed the environment at the IPP Office was unstable and sought to take action.

“This decision is taken approximately five months after the expiry of the contract of the head of the IPP office. Since the expiry of the contract, it has become clear to the department that it is not possible to resolve the appointment of the head of the IPP Office under the current circumstances,” says the DOE.

According to the statement, this JIC meeting was preceded by numerous attempts by the department to find a resolution to the matter. However, these had proven not to be successful, it adds.

“The department is committed to creating stability at the IPP Office and to support the transitioning of the office into an institution established through legislation. We envisage to have a newly established institution that will have its own governance structure, in accordance with the Public Finance Management Act and other applicable legislation to institutions of a similar nature,” says the DOE.

It adds the IPP Office continues to play an important role in providing process certainty for private funding to enter the power generation market, hence it is important the decision to stabilise operations and strengthen governance is communicated effectively.

Industry response

The country’s renewable energy sector industry has expressed shock and disbelief at the removal of Breytenbach.

Breytenbach is seen by her peers as an ethical and genuine leader, who has been pushing for a diverse and sustainable energy future.

SA’s renewable energy programme has so far attracted R209.4 billion to the economy with Breytenbach at the helm. The programme is reportedly having a significant impact on the economy, job creation, community upliftment, economic transformation and climate change.

In the years Breytenbach was in charge, the office attracted billions in committed private sector investment, resulting in much-needed alleviation of fiscal pressure.

According to the DOE, renewable energy IPPs created 38 701 jobs years for youth and women from the surrounding communities.

Wido Schnabel, chairperson of the South African Photovoltaic Industry Association (SAPVIA), says: “We, at SAPVIA, have been impressed by the work that Karen and her team at the IPP Office have done in establishing the Renewable Energy IPP Programme, which has become a world-renowned and model procurement process for renewable energy.

“We are also proud of the success the office has had in generating interest in bidding projects into the programme, resulting in over R200 billion of investment from local and international parties, the creation of employment representing more than 38 700 job years, and the significant reduction in energy tariffs, largely due to increased investor confidence, competition-induced innovation and falling technology costs.”

Schnabel says the organisation is hoping an equally capable replacement will be found to occupy the IPP Office.

“We are hopeful the IPP Office will continue to be staffed by a high-calibre team that will maintain the integrity and momentum of its energy procurements to date, fostering the fulfilment of the desired energy mix that will be published in the upcoming Integrated Resource Plan (IRP). As an industry association, we will continue to strongly support the IPP office in this regard.”

Transitional period

Renewable energy industry body, the South African Wind Energy Association (SAWEA), says it trusts that SA’s Renewable Energy Independent Power Producer Procurement Programme (REI4P), which is one of the country’s most highly regarded public-private partnership projects, is well-established enough to withstand this transition.

SAWEA chairperson Mercia Grimbeek says: “The REI4P is structured in a manner to ensure its integrity and viability, as a programme, can endure change in leadership.

“The wind industry is immensely grateful to Karen Breytenbach for her years of dedication and drive.

“She has been instrumental in creating a world-class programme and we hope that her successor will bring the same level of insight and guidance to safeguard the programme and permit it to continue to flourish and attract much-needed local and global investment.”

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