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Wind sector welcomes clarity on Eskom IPP signing date

Aug 23 2017 15:17
Matthew le Cordeur

Cape Town – The South African Wind Energy Association (Sawea) on Tuesday welcomed Energy Minister Mmamoloko Kubayi’s announcement on the progress in unlocking Eskom’s delayed signing of power purchase agreements (PPA).

Kubayi said a date should be announced by the end of the month. 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.

Sawea CEO Brenda Martin told Fin24 that the association welcomed Kubayi’s confirmation that clarity will soon be provided on the date for 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.

Kubayi announced the progress in an energy portfolio committee meeting at Parliament on Tuesday.

The renewable energy sector has been in freefall since Eskom decided not to sign PPAs in 2016, as it said it had excess capacity and would have to pay for electricity it would not require.

President Jacob Zuma said in his State of the Nation Address in 2017 that Eskom would sign the PPAs with the IPPs (independent power producers), but this was stalled after the Cabinet reshuffle saw the minister delay the process to engage with key stakeholders.

“Regarding the signing of PPAs in terms of IPPs, there has been progress and it is almost concluded,” Kubayi said. “At the end of the month we will issue a decision.

“The Department of Energy, Eskom and the DPE (Department of Public Enterprises) have been sitting and there has been positive work there,” she said. “We will give a date by the end of August.”

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