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Wind/solar sectors mull Eskom court bid while new energy plan delayed

Jan 10 2017 12:45
Matthew le Cordeur

Cape Town – The Department of Energy (DoE) has delayed the deadline of the public consultation process regarding its draft energy plans, while the renewable sector is considering going to court to force Eskom’s hand amid the sector's new build woes.

In November 2016, the DoE published the draft Integrated Energy Plan and the Integrated Resource Plan for public comments, a welcome step as the 2010 energy policy has yet to be updated.

The closing date for written comments was meant to be February 15 2017. However, “following requests from a number of stakeholders, the department has now extended the public comments period to run until March 31 2017”, the DoE said in a statement on Monday.

The finalised energy plan is a crucial policy plan that will provide clarity for the energy industry, with the renewable, nuclear and gas sector the possible beneficiaries of new build programmes.

The DoE had originally planned to have the new policy approved by Cabinet by April, but this delay will change matters.

Currently, the energy plan sees 9.6 GW of new nuclear being built by 2030. This could change once the new plan is approved. However, Eskom and state nuclear body Necsa have already started the request for information process in a bid to start the build programme.

Eskom blocks renewables, while pushing for nuclear

Over R200bn has been invested in the renewable energy sector in the last few years, Finweek quoted Jesse Burton from the Energy Research Centre at the University of Cape Town as saying.

However, with Eskom keen to get going on its nuclear programme, it shocked the renewable industry in 2016 when it refused to issue final budget quotes to preferred bidders in Round 4 and the Round 4 extension of the Renewable Energy Independent Power Producer Procurement Programme.

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 power purchase agreements, South African Renewable Energy Council (Sarec) chairperson Brenda Martin explained.

“These projects represent a combined value of R50bn in investment into the country that has been put on hold, which is ludicrous when considering our current economic climate,” she said.

Sarec is perplexed by Eskom

Speaking to Fin24 in a studio interview, Martin said she was perplexed by Eskom’s actions.

“All political sentiment suggests that there is full support for this to happen, so we really are confused about why is it that Eskom is just digging its heels in,” she said.

“The arguments cannot carry around cost or grid capacity,” she said.

Acting Eskom CEO Matshela Koko wrote on Fin24 that Sarec is “turning a blind eye to the crowding-out effect of the renewable IPP costs on the Eskom tariff”.

“According to them, Eskom is engaged in a sustained attack on (the) renewable energy programme in an attempt to protect its own narrow-minded interests.”

WATCH: Interview with Sarec’s Brenda Martin and Mark Pickering


Sarec considering court action

Sarec director Mark Pickering told Fin24 in a studio interview that the renewable sector is considering two options: it can continue to talk to government, or it can go to the courts.

“The legal opinions we have are very clear,” he said. “Where we go to court, we would get an enforcement order that Eskom should sign these power purchase agreements.

“It’s not our first choice,” he said. “We would prefer to resolve this through talking and that’s what we are doing. We are engaging with all the key stakeholders in government and with Eskom.

“We have some sense of progress, but it’s slow and there’s the sense that there’s some elephant in the room that’s rather difficult to talk about.

“Eskom has been very clear about its intentions,” he said. “It wants to run a nuclear programme and it is hoarding whatever cash it has from its cash flows to build up finances to try to finance a nuclear programme.

“Hence we see a lot of pressure on Treasury in all sorts of forms to cave in to this demand to finance the nuclear programme.”


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sarec  |  renewable energy  |  irp  |  energy  |  nuclear

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