Power projects selected in the tender will have to begin commercial operations by the end of June 2022 to assist power supplier Eskom which battles with breakdowns and shortages. Picture: Kim, Ludbrook, EPA.
Power projects selected in the tender will have to begin commercial operations by the end of June 2022 to assist power supplier Eskom which battles with breakdowns and shortages. Picture: Kim, Ludbrook, EPA.

Legal challenges mount over SA’s 2 000MW Risk Mitigation IPP Procurement Programme

By Siphelele Dludla Time of article published Sep 17, 2021

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SOUTH Africa’s bid to boost its electricity supply in the short-term through renewable energy could face further blackouts as legal challenges mount over the country’s 2 000MW Risk Mitigation Independent Power Producers Procurement Programme (RMIPPPP).

The Department of Trade, Industry and Competition (the dtic) said yesterday that it was considering opposing the legal challenge brought against it by a renewable energy producer over local content exemptions in the programme. Suntech Solar Power South Africa earlier this month went to court to challenge the dtic’s decision to retrospectively grant exemptions to rival bidders for designated local content requirements.

The RMIPPPP provides detailed local content requirements for 14 components plus subcomponents that might be used in the power projects such as electric cables and steel products. The Solar PV system and components category of the programme requires certain components such as module frames to be made or sourced locally.

However, certain preferred bidders were granted exemptions to source them elsewhere as the country does not have the required capacity.

In its court papers, Suntech described the exemptions as “unlawful” as they would force other preferred bidders to procure from rival bidders.

The dtic spokesperson, Bongani Lukhele, said they were weighing their options after obtaining a legal opinion on the matter. “The dtic is still considering the legal opinion on this matter and will, therefore, decide on the appropriate legal position,” Lukhele said.

“The dtic notes that other respondents have already indicated that they will oppose the application, including the Department of Mineral Resources and Energy (DMRE).”

In August last year, the DMRE launched a tech-neutral procurement of 2000MW of short-term risk-mitigation capacity to fill the electricity supply gap. The programme seeks to procure 2 000MW from a range of energy sources and technologies to be connected to the grid in the shortest amount of time at the lowest possible cost.

Power projects selected in the tender will have to begin commercial operations by the end of June 2022 to assist power supplier Eskom which battles with breakdowns and shortages.

The South African Photovoltaic Industry Association yesterday said it fully supported the objectives of the dtic.

Sapvia chief operations officer Niveshen Govender said their efforts were, therefore, focused on ensuring an enabling environment for local manufacturing and ultimately industrialisation which needs to be done responsibly and sustainably, making economic sense.

“We have engaged Suntech on this matter to better understand their position and further reached out to the dtic to facilitate a conversation before legal action was taken,” Govender said.

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