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IPPs optimistic after Kubayi announcement

Today the South African minister of energy, Mmamoloko Kubayi, announced that outstanding power purchase agreements (PPAs) for Bid Windows 3.5 and 4 will be signed by the end of October 2017.

Kubayi highlights way forward

The Minister highlighted that the Department of Energy (DoE) through the IPP Office will engage with all affected parties for Bid Window 3.5 and 4 to re-negotiate not above R0.77c per kWh.

Eskom is to ensure that all contracts are ready by 28 October, 2017, the Minister noted in her address.

She added that the majority of these projects will be commissioned closer to 2021 “and will therefore have minimal contribution to the overcapacity up to 2021.” Read more…

Certainty has been restored in sector stakeholders

Commenting on the announcement, the South African Wind Energy Association (SAWEA) said in a statement: “The announcement has provided much needed policy certainty and evidence that the country’s Renewable Energy Procurement Programme (REI4P) remains part of government’s vision for South Africa’s development in the context of transition toward a more diverse energy mix.”

SAWEA CEO, Brenda Martin, commented on the department’s progress: “Minister Kubayi’s announcement today sends an important signal, particularly to those who recognise the contribution that renewable power is able to make to South Africa’s economic growth.”

Martin continued: “The thousands of South Africans employed by the renewable energy industry, the many rural communities surrounding current and prospective wind farms who have been waiting for the development benefits associated with renewable power investment, are without doubt heartened by the confirmation that preferred bids from Rounds 3.5 and 4 will be concluded within 2 months.”

The delays in new IPP projects under the REIPPP programme have caused emerging markets to endure much of the impact. In a June statement, the South African Renewable Energy Council (SAREC) said that nearly R58 billion ($4.4 billion) of investment has been stalled – an estimated 13,000 construction jobs have been lost and billions of Rands of local economic development spend foregone. Read more…

Concluding on today’s announcement, Martin said: “Now we can all focus on realising the jobs, investments and developmental objectives intended by the Department of Energy when it initiated our country’s utility scale renewable programme. We are keen to work with the Department of Energy to address socio-economic concerns.”


Featured image: Stock

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.