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Signing of renewable energy contracts delayed - but only for a few hours

Apr 04 2018 12:40
Sibongile Khumalo

Pretoria – The signing of contracts to the value of R55.92bn with 27 independent renewable energy producers was delayed until Wednesday afternoon, as officials worked to finalise details of the deal, according to an official from the Department of Energy.

The deals were initially set to be signed off at around 09:30 by new Minister of Energy Jeff Radebe.

The long-awaited partnerships have been marred by numerous delays, including a last-minute court challenge last month.

“The signing was expected to take place this morning but has been slightly delayed. We are still finalising some details of the contracts,” said Maduna Ngobeni, project manager in the Independent Power Producer office at the energy department.

The group of companies set to sign the contracts will generate wind power, biomass and solar energy to increase the share of clean electricity South Africa produces.

The signing of the deals was expected to take place last month, but hit a snag when the National Union of Metalworkers of South Africa and Transform RSA approached the North Gauteng High Court in an attempt to block the partnerships.

Numsa also claimed the IPP roll-out would lead to significant electricity price hikes.

The urgent interdict application was dismissed in late March, and the case was struck from the roll. This enabled the signing of the agreements to go ahead. 

Capacity booster 

Private sector participation in the country's electricity industry was first approved by Cabinet in 2003, in a bid to boost capacity. 

Independent producers would contribute up to 30% of the country’s electricity production, and the rest would come from state power utility Eskom. 

The road to the signing of the renewable energy deals faced delays well before the court challenge, after Eskom refused to sign further agreements two years ago, citing financial woes.

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