HomeIndustry SectorsFinance and PolicySAREC: State of Capture report update 2

SAREC: State of Capture report update 2

Earlier this week, the South African Renewable Energy Council (SAREC) has responded to the disclosures in the Public Protector’s State of Capture report, which was released last week.

The renewable energy body, which acts as an umbrella body to the various renewable energy technologies such as the wind, solar photovoltaic (PV) and hydro energy, believes that the South African parastatal’s delay regarding Round 4 and the Round 4 extension of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is not economically motivated.

The Council explained in a statement that there are 26 preferred bidders across a range of technologies, none of which have reached financial close due to Eskom’s refusal to sign further power purchase agreements (PPAs).

SAREC: Eskom on renewables

Brenda Martin, Chair of SAREC and CEO of the South African Wind Energy Association (SAWEA), said: “These projects represent a combined value of R50 billion ($3.5 million) in investment into the country that has been put on hold, which is ludicrous when considering our current economic climate.”

She continued: “The people of our country need jobs and our industry can provide them, considering that the unsigned projects represent over 13,000 jobs.”

The Council explained: “The total number of jobs expected during the construction period of these projects is 13,444; where a job is defined as 1 job = 12 person-months and 1 person-month = 160 working hours.

“Added to this is the over-all number of jobs for South African citizens during the operations period is expected to be 1,909 per year, for a 20-year period.”

Martin noted: “It is clear from these figures that these projects represent a very significant investment in the South African economy and are vital stimuli for job creation, local content, and local economic development.”

Ministerial determination

According to the council, this deliberate refusal to comply with the ministerial determination on renewable energy challenges the prioritisation of green energy as outlined in the National Development Plan.

They added that it also has a negative impact on achieving government’s green industrialisation objectives and undermines the renewable industry’s efforts in bringing much-needed foreign investment into the country.

SAREC added that the delay is also hindering local manufacturing opportunities, social development programmes and the benefits of community ownership, all of which are common features of all REIPPPP projects.

“Over the past several months, Eskom has repeatedly avoided signing PPAs with renewable energy independent power producers (IPPs) and has failed to provide valid reasons for doing so,” said Martin.

She continued: “At the same time, Eskom’s Head of Generation, has engaged in a sustained attack on the renewables industry, in an attempt to undermine renewable energy and protect their own narrow interests.”

The industry has expressed confidence in the Presidency’s office, citing a cabinet statement issued on 22 August 2016, by the Minister in the Presidency, Jeff Radebe, who said that “there is no way that government will change course [on the IPP programme]”.

Martin concluded: “We therefore urge Minister of Energy, Tina Joemat-Pettersson, and Minister of Public Enterprises, Lynne Brown, to take coordinated action and ensure that policy and procedure are adhered to without further delay.”

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.


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