Johannesburg - Parliament’s energy portfolio committee chairman has warned the body will do its utmost to ensure “discipline” and coherent messaging from the government on energy policy after a decision by Eskom to halt the Independent Power Producer Programme.
Addressing the SA Gas Options conference in Cape Town on Tuesday, Fikile Majola said the country needed to demonstrate a commitment to follow through on its decisions so investors did not have to second-guess the government.
This follows the row over Eskom’s unilateral decision not to enter into further power purchase agreements with independent power producers (IPPs) under the government’s highly acclaimed renewable energy independent power producer programme.
Eskom chief executive Brian Molefe has cited concerns about the costs of renewable energy and Eskom’s obligation to buy electricity from IPPs regardless of whether it was needed as among the reasons for this decision.
It has caused confusion and dismay in the renewable energy sector as it contradicts determinations by Energy Minister Tina Joemat-Pettersson for the procurement of further generation capacity from renewables, in terms of which Eskom enters into long-term contracts to buy electricity from IPPs at agreed prices.
The ANC said after a meeting of its national executive committee this weekend, the Eskom decision was a direct contradiction of ANC policy and urged the government to reconsider it.
Majola said government stakeholders had been instructed to meet urgently to iron out their differences.
Turning to President Jacob Zuma’s energy adviser, Silas Zimu, Majola said there should be a consistent message and no confusion.
This comes after the Energy Department launched a preliminary information memorandum at the Gas Options conference outlining the road map toward the procurement of 3 000MW of liquid natural gas generation capacity from IPPs, with the bidding process expected to unfold over the next year.
The plan is for the development of a gas supply, transmission pipeline, power generation and gas distribution system at two sites - Richards Bay and Coega - producing 2 000MW and 1 000MW respectively.
Uncertainty over the government’s commitment to the renewable energy programme caused by Eskom’s position could deter investor interest in the gas programme as it is seen as complementary to renewables.
Gas power stations are able to ramp up generation fast enough to compensate for intermittent supply from wind and solar, making them an ideal partner technology for renewables, compared to coal and nuclear.
Head of the Energy Department’s IPP office Karen Breytenbach said once the minister had made a determination for the procurement of new capacity and regulator Nersa had concurred, it became binding on Eskom to purchase the electricity produced.
In the event Eskom were to fail to do so, the Treasury would pay to ensure the programme could continue.
THE STAR