The South African Renewable Energy Council (SAREC) think that Eskom’s unwillingness to sign extra Power Purchase Agreements (PPAs) with renewable energy Independent Power Producers (IPPs) will start to worry gas, coal and cogeneration project developers and IPPs.
In July last year, the South African national power utility, Eskom, declared that it will not be signing any PPAs with private power producers once round 4.5 of government’s renewable power programme comes to a close.
A spokesperson from the South African Independent Power Producers Association (SAIPPA), talking on a situation of ambiguity said: “This doubt in the nascent IPP sector not only affects new power projects being developed and bid into the department of energy procurement programmes, but also affects existing pioneer IPPs that have been putting in the energy supply of South Africa in the past few years.”
“It seems likely that some of these early pioneering IPPs and co -generators that contributed to the grid constancy and electricity supply over the past period of restrained Eskom electricity supply will be left out in the next term. Should the relevant Short Term Power Purchase Agreements not be renewed for these existing IPPs by March 2017, it will be one more blow to hopeful IPPs and this promising but vital sector,” the SAIPPA representative said.
Brenda Martin, Chair of the SAREC, also remarked: “Such nonconformity with properly undertaken power procurement has consequences outside the renewable energy industry in that side-stepping policy introduces risk for other independent power producers presently organizing to bid for the department of energy’s already issued or impending requests for proposals.”
Conversely, Eskom’s verdict has since been confronted by many renewable energy bodies and as a consequence, rising pressure from the department of energy, national treasury and even the presidency has made the power utility to amend its original statement.
Last week, power utility’s present interim CEO, Matshele Koko, said: “Let us first sign the 62c/kWh bids. We would sign 13 right away. That would be a budge in the right track.”
Nevertheless, Koko gave stipulations affixed to the new decision, stating that: “Those that are more than 62c/kWh must sharpen their pencils.”
