gas flaring

The South African Wind Energy Association (SAWEA), has welcomed a judgment by the High Court in Pretoria dismissing a case brought by the Coal Transporters Forum (CTF) to interdict Eskom from signing duly procured power purchase agreements with preferred bidders.

CTF had argued that the court should set aside all power purchase agreements signed with Independent Power Producers (IPPs) to date because it claims that the National Energy Regulator of South Africa (Nersa) authorised them without proper public consultation.

The forum also argued in its founding affidavit that the renewables programme will impact negatively on Eskom’s financial performance.

The High Court in Pretoria dismissed CTF’s assertions with costs of two legal counsel payable by the claimants, to each of the respondent entities. 

In his judgment handed down on Tuesday, High Court Judge P.A. Meyer confirmed that Nersa and the Department of Energy followed all correct procedures before finalising power purchase agreements.

“Despite CTP’s protestation to the contrary, the evidence is simply overwhelming that the regulator issued each successful IPP bidder an electricity generation license after following a public participation process for each project,” states the judgement.

Energy transition

SAWEA CEO Brenda Martin welcomed the comprehensive judgement, which confirms the full policy and regulatory framework for the power sector and covers in great detail government’s vision for the energy transition.

“In particular we welcome the court's recognition of the long-standing origins of democratic South Africa's commitment to making an energy transition away from a coal-intensive supply system,” she said.

The Integrated Resource Plan (IRP), the government’s long-term energy plan, which is yet to be promulgated - envisages an overall reduction in coal-generated energy by 2030.

The judgment points out that while government’s policy accepts that coal will remain the primary source of power generation, policymakers acknowledge that coal has significant detrimental impacts on the environment.

Thus, in view of the environmental and health impacts of coal and the need to diversify the source of supply to maintain energy security government’s energy policy supports and promotes the development of renewable energy to achieve a more sustainable energy mix.

The judgment also notes that the New Generation Capacity Regulations establish rules and guidelines that are applicable to the undertaking of the IPP bid programme for the procurement of new generation capacity. They also facilitate the fair treatment and non-discrimination between the IPPs and the buyer of energy, the judgment notes.

“The judgement is a strong reminder of fact that the vision for South Africa’s energy transition has been long in the making – stretching back as far as 2004. It is not something that government did overnight or under the radar as the CTF and previously Transform RSA have claimed,” said Martin.

She added: “The entire process has been goal-directed, very public and transparent. In his judgement the Judge makes reference several times to when parties – including the CTF had an opportunity to comment on this process and didn’t.”

Severe power crisis

The judgment by the High Court in Pretoria comes at a time when Eskom, which supplies virtually all of South Africa’s energy, is facing a severe power crisis.

Last week the utility was forced to resort to stage 4 load-shedding to prevent a complete collapse of the grid.

In the meantime, recent statistics compiled by the Council for Scientific and Industrial Research (CSIR) Energy Centre, show that without renewables, South Africa would have experienced higher stages of load shedding more frequently in 2018. The numbers also reflect that renewables reduce the economic cost of load shedding.

“Despite some years of stop-start procurement – IPPs have also proven their capacity to deliver built programmes on-time and within budget,” noted Martin.

She pointed out that the judgement also refers to the steadily declining cost trajectory of renewables. 

According to Martin, this favourable trajectory has been achieved through continuous rounds of competitive auctions where bids have been rigorously assessed and selected on the basis of compliance with Ministerial determinations.

“There is ample evidence now that the Renewable Energy Independent Power Producer Procurement Programme in SA (REI4P) has not only secured additional MW capacity, helping to reduce the impacts of load-shedding, but has also created new jobs and strengthened rural communities,” said Martin.

“This is the second case brought - and lost - by coal interests against making progress on the South African energy transition,” she said.

In conclusion, Martin said: “We think that enough time has been wasted. Let's get on with managing the energy transition and delivering an energy secure future for [the] South Africa.”