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Renewable off, nuclear on

Energy
Cape Town - Government has missed the deadline set by previous Energy Minister Tina Joemat-Pettersson for the financial closure of outstanding Power Purchase Agreements (PPAs) with renewable energy producers.

The SA Renewable Energy Council (Sarec) said that this weekend, when invited to attend the signing of contracts at the Independent Power Producers (IPP) office, new Energy Minister Mmamoloko Kubayi’s office asked that the signing be delayed. Kubayi apparently first wanted to meet Public Enterprises Minister Lynne Brown before setting a new deadline. The delay is despite President Jacob Zuma confirming Eskom would sign PPA’s at his State of the Nation address.

This after reports South Africa’s nuclear build programme has been speeded up and is expected to come into effect in June when Eskom will issue a call for bids for the R1 trillion contract.

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Koeberg power station, which has a great role to play in the South African economy going forward. Photo: Bruce Sutherland

EFF spokesperson Mbuyiseni Ndlozi said there was a link between the axing of now former finance minister Pravin Gordhan and Joemat-Pettersson. He said there was no truth in the energy department’s excuse for the delay.

“This has nothing to do with any other administrative technicality,” Ndlozi said.

DA energy spokesperson Gordon Mackay said Zuma removed Joemat-Pettersson because she was “dragging her feet” in forging ahead with the nuclear plan. Mackay added that Eskom would drag out the signing of the PPAs, as the contribution of the IPPs would add excess energy to the grid, and therefore eliminate the need to go ahead with the nuclear plan.

The party would write to Kubayi to urgently set a new deadline for the signing of the PPA.

Read also: Eskom on nuclear charm offensive

“We believe the delay is a further blow to investor confidence the country can ill-afford in light of the cabinet reshuffle and sovereign downgrades,” he said.

Sarec chairperson Brenda Martin said: “While we recognise the need for the new minister to get up to speed on the issues, financial closure of duly procured renewable power for 37 PPAs now stands at almost two years.”

Sarec estimates that a combined investor value of R58bn in investment will be unlocked as soon as PPAs are signed. Over 13000 jobs will be created during the construction process along, with over 1900 jobs created in the operational phase.

“The previous minister of energy had been actively engaged in achieving PPA conclusion, and in moving forward the IRP2010 update process,” Martin said.

“It is our hope that minister Kubayi will recognise the vital importance of minimising delay, in the national interest. Continued postponement could have long-term investment, short-term job loss, and direct economic effects on rural communities waiting for planned socio-economic development to reach their economically depressed towns.”

Eskom’s chief nuclear officer Dave Nicholls said Eskom expects to issue a full Request for Proposal (RFP) to the open market once the Request for Information has been assessed and the relevant approvals have been obtained.

“To date Eskom has therefore not received any formal proposals from potential suppliers and has not signed any power plant procurement agreements. Eskom has not undertaken any pre-qualification assessment to date related to the potential respondents to a potential RFP,” said Nicholls.

Eskom, in conjunction with the Nuclear Energy Corporation of South Africa (Necsa), issued a non-binding Request for Information to the open market on December 20 last year, which will close on April 28.

Eskom also says it is ready to sign power purchase agreements in the renewable energy programme.

The department of energy did not respond to queries by deadline.

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