JOHANNESBURG - Public Enterprises Minister Lynne Brown on Friday gave Eskom the green light to purchase additional power from renewable energy independent power producers (IPPs).
The move paves the way for the government-drive Renewable Energy Independent Power Producer Procurement (Reippp) Programme to get back on track.
The programme had stalled after Eskom, the designated buyer of power from IPPs, refused to sign power purchase agreements with 27 IPPs, citing concerns about cost and current electricity overcapacity.
In a statement on Friday, Brown said: “The conclusion of the Power Purchase Agreements to enable the implementation of the outstanding projects under bid windows 3.5, 4 and 4.5 of the (Reippp) is critical to implementation of the national energy policy as articulated in the Integrated Resource Plan of 2010.”
The Department of Public Enterprises on Friday said Eskom last month submitted an application to Brown under Section 54 of the Public Finances Management Act to purchase the additional energy. The minister approved the application on Friday, the department said.
“South Africans have reason to feel very proud of the progress the country has made adding renewable energy to the energy mix. There are risks to Eskom’s financial and operational stability in the medium term, among others, that must be mitigated. We are committed to reducing our carbon footprint.
“I have requested Eskom to work expediently to implement the decision and avoid further delays. I have also written to the Ministers of Energy and Finance requesting that we discuss how to address Eskom’s genuine concerns through expediting a revision of the Government Support Framework Agreement,” said Brown.
The department did not disclose whether the previously proposed 77c/kW/* tariff cap would apply. The former Minister of Energy previously said that Eskom would only sign power purchase agreements at a tariff not exceeding 77c/kW/* , a move that met resistance from sections of the renewable energy industry.
The South African Wind Energy Association (Sawea) on Friday said it was relieved that the 27 renewable energy projects, which include wind, solar photovoltaic and concentrating solar power would go ahead.
“We are sure that the many rural communities surrounding prospective wind farms who have been waiting for the development benefits associated with power plant construction, and the thousands of South Africans employed by the industry are certain to be as relieved as we are,” said Sawea chief executive Brenda Martin.
Sawea said over the past two years, the South African renewable energy industry had been gripped by uncertainty.
“With this final step now achieved, we hope that the country’s renewable procurement programme will soon be back on track so that the many benefits to rural communities can be realised, much-needed jobs can be created, and so that investor confidence can be regained,” the organisation said.