Finally, IPPs look set to get Eskom sign-up deal

Aug 31 2017 14:48
Matthew le Cordeur

Cape Town – Energy Minister Mmamoloko Kubayi will on Friday announce a decision regarding the independent power producer (IPP) power purchase agreements (PPAs) Eskom refused to sign in 2016.

There are 26 preferred bidders across a range of technologies, none of which has reached financial close due to Eskom’s refusal to sign further PPAs.

The minister told Fin24 that she received a report on Wednesday afternoon after the Department of Energy and the Department of Public Enterprises held a stakeholder consultation process regarding the impasse.

“The purpose of the briefing (on Friday) is for the minister to give details on the outcome of the consultation of stakeholders in the pending IPP PPA signing ceremony,” the Department of Energy said in a statement on Thursday.

“The briefing will also address key issues of energy security, accessibility and affordability in the context of economic recovery of the country. It will also reflect on the role of renewables in the broader growth of the energy sector as well as context of energy mix policy.

“The Independent Power Producers Programme is implemented pursuant to the Ministerial Determinations as per Section 34 of the Energy Regulation Act of 2006 as well as in line with the promulgated integrated Resource Plan.”

President Jacob Zuma said the PPAs would be signed shortly after his State of the Nation address in early 2017, but a Cabinet reshuffle delayed that process.

Last week, the South African Wind Energy Association (Sawea) welcomed Kubayi’s announcement on the progress in unlocking the PPAs.

Sawea CEO Brenda Martin told Fin24 that the association welcomed Kubayi’s confirmation that clarity will soon be provided on the date for the conclusion of duly procured outstanding power purchase agreements.

“The thousands of South Africans employed by the industry, the many rural communities surrounding current and prospective wind farms who have been waiting for almost two years for this impasse to be resolved, will be appreciative of the leadership the minister demonstrates in this area,” she said.

“Concluding the outstanding PPAs will ensure that the necessary jobs, investments and developmental objectives intended by the Department of Energy when it initiated SA’s utility scale renewable programme, can be realised.”

Martin previously said the projects represent a combined value of R50bn in investment into the country that has been put on hold.

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