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Johannesburg - Minister of Public Enterprises Lynne Brown's green light will finally allow South Africa's renewable energy programme to get going again, the South African Wind Energy Association (Sawea) said on Friday.
This comes after Brown gave Eskom the go-ahead to sign outstanding power purchase agreements with independent producers who form part of the country's independent power scheme.
The producers have been waiting for the conclusion of the 27 outstanding power purchase agreements for three years, which include include wind, solar photovoltaic and concentrated solar power.
The programme largely ground to a halt when Eskom refused to sign further agreements about two years ago, citing financial woes. The decision put the skids on the programme and renewable investment flowing into the country.
According to Sawea the bulk of the outstanding projects are earmarked to be constructed in the Northern Cape, which has over 60% of the preferred bid allocation, while the Eastern Cape has 19%. The remaining projects are to be located in the North West (10%), Western Cape (6%) and Mpumalanga (1%).
Brenda Martin, CEO of Sawea told Fin24 the association was relieved that the 27 renewable energy projects should soon be able to proceed toward construction. She said Brown’s approval was the last step in the process and all that is now required is for all affected parties to set a mutually suitable date for signing the 27 power purchase agreements.
South Africa’s internationally acclaimed Renewable Energy Independent Power Procurement Programme can now continue to deliver on-budget renewable power along with social and economic benefits in rural areas, Martin said.
"We are sure that the many rural communities surrounding prospective wind farms who have been waiting for the development benefits associated with power plant construction, and the thousands of South Africans employed by the industry are certain to be as relieved as we are," she said.
Over the next few weeks, each party will need to ensure that their documentation is current. Once the power purchase agreements are signed, the independent power producers will move ahead according to their implementation agreements’ timelines.
Extensive uncertainty
Martin said that over the past two years, the SA renewable energy industry has operated with extensive uncertainty.
"With this final step now achieved, we hope that the country’s renewable procurement programme will soon be back on track so that the many benefits to rural communities can be realised, much-needed jobs can be created, and so that investor confidence can be regained."
She pointed out that the last set of winning bids were announced in 2015. Thus the task of getting South Africa's renewables programme back on track will be a challenge for all involved.
The association, however, looked forward to working with government, civil society and labour to ensure that the programme makes an optimal contribution to South Africa’s economic, social and environmental security as the country prepares for the necessary energy transition, Martin said.
Avoid further delays
Brown said in a statement that the "conclusion of the power purchase agreements to enable the implementation of the outstanding projects under bid windows 3.5, 4 and 4.5 of the Renewable Energy Independent Power Producers Programme is critical to implementation of the national energy policy as articulated in the Integrated Resource Plan of 2010”.
On January 11 2018, Eskom submitted an application to Brown under Section 54 of the Public Finances Management Act to purchase the additional energy, which she approved on Friday.
Brown said she requested Eskom to work expediently to implement the decision and avoid further delays.
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