State, power producers sign contract

2012-11-05 13:52

Pretoria - The first contracts between the government and independent power producers (IPPs) to add 1400 megawatts of renewable energy to the national grid were signed in Pretoria on Monday.

Energy Minister Dipuo Peters said Monday's signing ceremony with the 28 approved bidders for the so-called Window 1 was an auspicious day which presented various benefits for the South African economy, not limited to the energy sector.

"Our government expects this programme to make a substantial contribution to the economy in various ways.

"It [the project] will provide greatly needed energy, with both measurable and immeasurable spin-offs, including job opportunities and skills development," she said.

Window 1 describes the first round of bids sought in terms of government's 20-year Integrated Resource Plan for renewable energy, including solar, wind, biomass, and biogas projects.

It was estimated that Window 1 would bring investment worth R47bn into the energy sector, Peters said.

The projects were not limited to particular provinces, in a bid to ensure all South African communities benefited, especially the poor.

"I am proud to announce that the projects are spread across some of the most rural and least developed provinces, including the Eastern Cape, Northern Cape, Limpopo, North West, and Free State.

"Some of the IPP bidders have undertaken to set up community development initiatives that will uplift at least one community within a 50km radius of each project. Government is sure that local communities in the vicinity of the IPP projects will gain," said Peters.

The 28 companies were appointed as preferred bidders in December last year. Monday's signing of the contracts was expected to run past 20:00.

The pacts being signed included power purchase and implementation agreements.

In a statement earlier this year, the department said it estimated that the full five-window bid process "will attract project proposals to the value of R100bn over its lifetime".

Last month, power utility Eskom applied for a 16% annual increase for five years in the price of electricity - from April next year to March 2018. A portion of this  3% - was intended to support the introduction of IPPs.

  • thandiwe.ngema.71 - 2012-11-05 15:01

    Finally government makes a decision that makes sense. We need a lot more power produced from renewable energy especially solar energy. We could have huge solar power plants in the Northern Cape.

      carel.scholtz.16 - 2012-11-05 15:12

      Yes I agree. But look at the bigger picture: Who will pay for all of this at the end of the day??? us the consumers!! Thats why they applied for an increase! We the bread winners is alway to pay! Thats why the government signed!

      J.Stephen.Whiteley - 2012-11-05 17:32

      Solar, yes. Wind, no.

      Adil Smit - 2012-11-05 17:36

      Agree but Escom should lower it's tariff.

      claudia.meads - 2012-11-05 17:49

      Thandiwe, I have followed your comments for a while - you represent the only glimmer of hope left in SA - keep it up sister..! My fear is that what is presented as 'independent' (power suppliers), are anything but independent - that they are in fact merely connected cronies that will run operations with hugely inflated staff, -costs, -fees, etc, to serve the sushi-slurping, whiskey-gulping culture instilled by the spear-dangling goon from the Polokwane-2007 coup fame. I hope I am wrong, sadly I would not be surprised if I am not - the only thing the ANC has given the world is the TENDERPENEUR - so go figure... What saddens me even more is the fact that the feckless ANC will destroy SA, in the process though, people like yourself will suffer the most - viz your true potential may never be realized. Again - I hope I am wrong...

  • rudi.debeer.5 - 2012-11-05 15:39

    Please tell me, if the consumer pays to start new industry, shouldn't we be shareholders in this companies?

  • hugh.robinson.56 - 2012-11-05 15:49

    The reason why Eskom and government expects us to pay more. About time Electricity sold to the consumer from Municipalities is tax free.

  • Paulnicomp - 2012-11-05 17:24

    Why the community upliftment projects which the consumers will be paying for. Surely the only concern the government should have is the quality of the supply,the cost and environmental issues. Why does everything have an element of of private business having to do what the government should already be doing for its citizens.

  • ludlowdj - 2012-11-06 11:31

    Don't expect the roll out of low cost, low maintenance solar farms, to reduce or slow down the steady rise in costs Eskom forces on the consumer each year. These power producers will not be selling to the end user, they will be supplying Eskom with cheap renewable electricity which Eskom will in turn sell off at their normal profit margins. The biggest resistance to renewable green energy is not the costs its the potential profit loss government and the mainline producers like Eskom will suffer. The outcome is therefore that while solar energy use will increase, the costs will continue to rise and the profit margins will increase for the Government suppliers.

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