ibusinesslines.com March 18, 2018

Conflicting reports over why signing of IPP deals halted

15 March 2018, 02:02 | Erica Roy

Coal ash disposals in South Africa. The country's power mix has long been dominated by coal

Coal ash disposals in South Africa. The country's power mix has long been dominated by coal

The announcement that the government and Eskom complied with NUMSA's demand to once again delay the signing of renewable energy contracts means that they are sabotaging South Africa's economy and the environment.

Eskom in 2016 refused to enter into new deals with 27 IPPs due to cost issues and excess power generation capacity, causing significant delays in the development of the projects, selected under bid windows 3.5, 4 and 4.5 of the country's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The government, which on March 8 announced its intent to sign 27 outstanding deals, has taken steps to prioritize partnerships with the private sector just weeks after President Cyril Ramaphosa took office and made his own appointments, including Energy Minister Jeff Radabe, to the Cabinet.

He said that coal is a dying industry that is constantly facing challenges and bleeding jobs.

Radebe said that the postponement was agreed to "in the spirit of constitutionalism" but he maintained that the coal-powered energy sector was a diminishing source of power and that the new renewable power providers were a convenient means of upskilling workers now in the coal powered sector.

Hlubi said the union was questioning the intentions. In his response, Radebe said nothing prevented Eskom and IPPs from signing the agreements.

"However‚ counsel for the Minister informed the court that whilst there is no interdict granted‚ the signing will however be postponed until the 27 March 2018 when the matter is finally disposed of in court". Electricity prices will skyrocket because of the IPP roll out; while at the same time that Value-Added Tax and the fuel price are going up, workers are being paid slave wages of R20 per hour and less.

In a study about the cost of new power generators in SA, the CSIR argues renewables such as solar PV and wind are a "mass manufacturing play".

According to Martin, these include a goal-directed transition away from coal-fired power, the creation of new jobs in this transition, a direct contribution to SA's carbon emissions reduction targets, and investment growth that would strengthen the South African economy.

But this plan was stopped by trade union Numsa and lobby group Transform South Africa when they were granted a late-night interdict by the High Court to halt the proceedings.

"South Africa's renewable programme can contribute directly to the benefits associated with the necessary energy transition in South Africa and must be allowed to continue", says Martin.

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