Johannesburg – A legal showdown
is looming between Eskom and a group of renewable energy companies over Eskom’s
delays in signing power purchase agreements as part of the renewable energy
independent power producer procurement (REIPPP) programme.
As the designated buyer of
the power from the independent power producers (IPPs), Eskom is supposed to
sign 20-year power purchase agreements with the IPPs. Since the start of the
REIPPP in 2011, renewable energy projects – mainly solar and wind – have
attracted investment about R194 billion.
But Eskom’s delay in signing
power purchase agreements with 37 IPPs has raised the ire of the renewable
energy industry. The 37 IPPs are expected to inject about R58 billion.
The South African Renewable
Energy Council (SAREC) on Wednesday said it had obtained legal opinion which
confirmed that preferred bidders were entitled to approach a court to enforce
Eskom’s signature of Power Purchase Agreements.
“In our opinion Eskom cannot
sidestep the binding determination of the Minister; they are bound by the
Ministerial determination, which includes signing the power purchase
agreements,” said Advocate David Unterhalter, Senior Counsel at Webber Wentzel.
Read also: Dismay as Eskom pulls plug on power purchases
SAREC is representing the 37
IPPs affected by the delay in the signing of the agreement. “We are pleased
that the legal opinion is so very clear in their opinion that Eskom has no such
prerogative. This assures us of the strength of our legal position” said SAREC
chairperson, Brenda Martin.
SAREC said local and foreign
investors had responded positively to the REIPPPP to date, partly because the
rules had been clear and applied fairly and consistently. “Tampering with the
rules at this stage can only damage confidence in both the programme and the
country.
Eskom spokesman, Khulu
Phasiwe says SAREC was within its rights to seek legal opinion. “We must also
not be reckless in how we spend money. We cannot spend money on projects that
will put Eskom in financial constraint.”
BUSINESS REPORT ONLINE