File picture: Nadine Hutton, Bloomberg
JOHANNESBURG - Its crunch time for 27 renewable energy independent power producers (IPPs) ahead of the expected conclusion of power purchase agreements with Eskom this week.

Eskom and the Department of Energy yesterday gave little away on progress in the conclusion of the contracts for projects in the so-called bid windows 3.5 and 4. The department did not respond to a request for comment. The power purchase agreements for bid window 3.5 were initially scheduled to be concluded in mid-2015.

Last week, Energy Minister David Mahlobo told a government-organised energy conference that IPPs would conclude the long-awaited power purchase agreements with Eskom, the designated buyer of power from renewable energy producers participating in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), this week. Mahlobo said he and his Public Enterprises counterpart Lynne Brown had already reached an agreement on the matter.

Eskom has resisted pressure from the government and the renewable industry to sign the renewable IPP agreements, charging that it was concerned about the costs of renewable energy and the current overcapacity.

South African Photovoltaic Industry Association (SAPVIA) chairperson Davin Chown said yesterday that the department and the IPP Office had no obligation to inform the industry body of developments in the conclusion of the contracts.

“They work directly with the individual bidders or contract holders. We are not a middleman and we are not an official contact. We do not get early warning,” said Chown.

The IPP Office is a joint venture between the department, the National Treasury and the Development Bank of Southern Africa responsible for securing electrical energy from the private sector via renewable and non-renewable energy sources.

The delay in the conclusion of the agreements put on the line investments worth billions of rand. Since it was launched in 2011, the REIPPP has attracted attracted R194billion in investments, according to the Department of Energy.

SAPVIA has urged the government to create an enabling environment and commit to a firm, consistent roll-out of renewable energy to unlock the potential that solar and renewables have to offer South Africa that will provide the policy and programme consistency needed. The organisation last week launched a five-point plan for the photovoltaic industry, which it said would drive industrialisation, create jobs and contribute to economic growth.

It said, as part of the plan, it would work with the government to build 1500MW of photovoltaic a year. It said the government should build a long-term winning partnership with the renewable energy industry.

“It's clear that this sector is ready for immediate roll-out and can drive much-needed industrialisation, job creation and economic growth,” said Chown.