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Presidency distances itself from PPA reports

Cape Town - The Presidency has rejected media reports that President Jacob Zuma has tasked two ministers to convince Eskom CEO Brian Molefe to sign off on the power purchase agreements (PPAs) with Independent Power Producers as "incorrect".

The IPPs are preferred bidders selected under the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Signing the 20-year PPAs will allow the 26 preferred bidders, most of whose renewable energy projects are in rural areas, to add 2 205 megawatts to the grid.

City Press, Fin24's sister publication, reported on Sunday that Silas Zimu, Zuma's special energy adviser, revealed that ministers Edna Molewa and Naledi Pandor have been tasked to convince Eskom to sign off on the PPAs.

According to the report Zimu made this announcement in a breakaway session at the Windaba wind and energy conference that took place in Cape Town.

The Presidency said in a statement on Monday that no such decision has been taken by either the President or Cabinet. "Mr Zimu spoke in his personal capacity. His remarks at the conference were not mandated by the Presidency or government," the Presidency said.

According to the statement Jeff Radebe, Minister in the Presidency for Planning, Monitoring and Evaluation, speaks on behalf of Cabinet.

"The Minister publicly expressed the support of Cabinet and government to the implementation of the Independent Power Producers Procurement Programme. All concerns that have been raised with regards to the IPP programme are currently being attended to," the statement read.

In July this year, Eskom’s Molefe set the cat among the pigeons when he announced that Eskom would not proceed with signing further PPAs beyond those selected under the REIPPPP’s bid window 4.5.

He also publicly announced in May that Eskom would not sign any further PPAs without a government review of the process, as renewable energy had failed to provide energy when Eskom needed it most.

However, Eskom’s stance was rejected by Cabinet, which stated government, and not the utility, decided on policy.

Last month, the South African Wind Energy Association (SAWEA) lodged an official complaint with the National Energy Regulator of South Africa (Nersa) over  Eskom’s refusal to enter into PPAs with the IPPs.

Nersa confirmed to Fin24 that it received SAWEA's complaint. "Nersa is reviewing the complaint with the view of investigating the complaint in line with the Electricity Regulation Act," said spokesperson Charles Hlebela.

The complaint details Eskom’s refusal to comply with the Electricity Regulation Act, ministerial determinations and Eskom’s own transmission licence conditions. SAWEA also accused Eskom of abusing its position to favour its own investment in new power plants.

Responding to this, Eskom said it does not see the introduction of IPPs as a threat.

"As a country, we are pushing for an energy mix that includes renewables, coal, nuclear and other sources as determined by the national policy framework," Eskom spokesperson Khulu Phasiwe told Fin24 at the time.

"All of these energy sources will be implemented at a scale and pace that the country can afford."

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