Published: Thu, March 15, 2018
World | By Paul Elliott

Renewable energy deal is delayed - again

Renewable energy deal is delayed - again

"The court found that our application meets the standard for urgency and therefore granted us the interdict", Numsa said in an emailed statement.

Eskom argued previously that renewable energy is more expensive than the energy it generates from its own coal-fired power stations and tried to impose a cap on the tariffs previously negotiated between the department of energy and the independents.

In what came as a relief to the renewable energy industry last week, energy minister Jeff Radebe announced the long-awaited 27 renewable energy independent power producer (IPP) projects will finally be signed on Tuesday.

Radebe was responding to a court interdict obtained by trade union Numsa on Monday night, to prevent the department and Eskom from signing 27 agreements with independent power producers (IPPs).

The Ramaphosa government however announced that it will proceed with the signing as well as the other renewable projects and the Eskom cap would not apply.

The Department of Energy expects the court matter to be disposed of when it returns to the high court in Pretoria on March 27, and the signing of the contracts to continue as planned shortly thereafter.

A decision is now postponed until 27 March.

Hlubi said the union was questioning the intentions.

The National Union of Metalworkers of South Africa (Numsa) believes the 60 000 jobs the government says will be created by the addition of renewable energy sources to the grid will not materialise. In his response, Radebe said nothing prevented Eskom and IPPs from signing the agreements.

The order is another setback for energy developers including Denham Capital-backed BioTherm Energy and ACWA Power International that have been waiting for deals to be signed since 2016.

"Delayed investment of over 59bn rand ($5bn), the creation of over 13,000 construction jobs and a further 2,000 operations jobs was meant to be unlocked today", said Brenda Martin, CEO of the South African Wind Energy Association (SAWEA).

"The IPP roll-out will raise the cost of electricity dramatically, because IPP's cost much more than coal-fired electricity", Numsa said.

Today was supposed to be the day South Africa's REIPPPP renewable energy programme got back on track, finalising PPAs for projects that had been left in limbo despite being offered deals as long ago as 2015 under tender rounds 3.5 and 4, after a long-running dispute with state utility Eskom put the entire process on hold.

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