Axing of renewable energy office head a major setback, say energy experts | Fin24
 
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Axing of renewable energy office head a major setback, say energy experts

Jul 24 2019 05:00
Melanie Gosling, Fin24

Energy experts say the axing of the head of the Independent Power Producer’s office Karen Breytenbach will be a major setback to South Africa’s renewable energy programme that will send the wrong signals to potential investors.

They say Breytenbach – who said she was given no reason by the Development Bank of SA or the Department of Energy as to why she had to leave before the end of her contract – had spearheaded the team that had built up the IPP office into a world renowned unit, drawing investment of R209bn in renewable energy projects since 2011.

Some believe the move is because DBSA wants to get rid of the IPP office to create a much bigger entity to handle public-private partnerships (PPAs) across a number of infrastructure sectors, which energy experts say will dilute the focus on renewables.

Others fear it might open the way for "corrupt individuals" to milk the programme.  All independent power producers’ who close deals with the government have to give 1% of the cost of their power projects to the government. This pot of money is used to fund the IPP office.

Chair of the SA Independent Power Producers’ Association Thomas Garner warned that Breytenbach’s axing would have a chilling effect on investment in the renewable energy industry.

Terrible loss

"She was excellent at her job and was absolutely incorruptible, and was driving one of the best renewable energy programmes in the world. Business and industry people see this as an absolute shocker."

"It worries me. In my opinion this could be a move to make space for a corrupt individual to take her place and to milk the programme," Garner said.

The IPP office was set up at the end of 2010 by the Department of Energy, National Treasury and the DBSA. DBSA provided the initial funding.

Harald Winkler, a professor at UCT's Energy Research Centre, described Breytenbach’s leaving as a "terrible loss".

"She was a key person doing an excellent job and this will be a real setback for a very important programme. Karen did a fantastic job. Global prices for renewables continue to come down, but not having continuity in such a key person doesn’t help the programme," Winkler said.

Energy expert Chris Yelland said he had it on good authority that the DBSA wanted to set up a bigger procurement platform to establish public-private partnerships across a number of sectors that built infrastructure, not just electricity. This was to be headed by the DBSA and would include banks, ASISA and government.

"It took several years and a lot of painstaking work to set up the IPP office and it is something that really works. What worries me is if DBSA is going to build this new procurement platform to handle all sorts of other infrastructure, it will take years and years. In the meantime they will take their eye off the ball of the renewable energy programme, something which exists and which is working," Yelland said.

"Instead of building on what works, they want to start all over."

He said he had heard some criticism levelled at Breytenbach that she favoured the big international companies and had not done enough to develop local black industrialists.

"That is unfair criticism. If you are developing a 100MW power plant that takes a truly enormous amount of money to build, you have to deal with guys who are leaders in the field around the world," Yelland said.

Setback

Makoma Lekalakala, head of Earthlife Africa’s Johannesburg branch, believes Breytenbach was responsible for spearheading the investment and rollout of the country’s renewable energy programme, helping South Africa move towards low carbon energy generation.

"This is a setback to a just transition. We hope the new person does not roll back her success," Lekalakala said.

Asked to comment, the DBSA said in a statement on Tuesday afternoon that Breytenbach’s contract had expired at the end of February 2019 when she had reached the retirement age of 60.

DBSA, DoE and National Treasury had offered Breytenbach a contract until the end of July this year, and later another fixed term contract, both of which she had declined. DBSA did not say when the second contract would expire.

"Ms Breytenbach has therefore not been an employee of DBSA since the expiry of her fixed term employment contract on 28 February 2019," DBSA said.

However Breytenbach told Fin24 on Tuesday that she had been given no reason for the termination of her contract, which still had nine months to run until April 2020.

"I think they wanted someone more to their liking … Politics is not my strength. I am a worker bee," Breytenbach said.

She had not been told who would head the office in an acting capacity, but added that she believed the IPP office would continue.

"We have a very good team, it is not just one person that made it a success. No one can ignore that renewable energy is here to stay, so I don’t think it will have an impact on the programme," Breytenbach said.

* This article recently stated that Harald Winkler was the head of UCT's Energy Research Centre. This is incorrect. Winkler is a professor at the centre. It was updated at 14:09 on July 24, 2019.

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