HomeNewsREIPPPP: rounds 3.5 and 4 PPAs to proceed come October

REIPPPP: rounds 3.5 and 4 PPAs to proceed come October

On Friday, the South African renewable IPP market welcomed the announcement made by the minister of energy, Mmamoloko Kubayi, to proceed with bid Window 3.5 and 4 developments.

The Minister said that the Department Of Energy (DoE) will proceed with the outstanding power purchase agreements (PPAs) for round’s 3.5 and 4, which will be ready for signing by 28 October 2017.

She added that the 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.

REIPPPP: a clearer future for IPPs

Commenting on the decision, the South African Photovoltaic Industry Association (SAPVIA) said in a statement: “This will bring much needed investment, secure current jobs and manufacturing investments in the sector, and create new jobs and opportunities for communities surrounding these projects.

“The signing of the PPAs will fast track the delivery of employment opportunities, local manufacturing opportunities, social development programmes and the benefits of community ownership, all of which are common features of all REIPPPP projects.”

The association further noted: “These announcements send a positive signal to the market that the Government is committed to ensuring renewable energy plays its part in the future energy mix in a manner that ensures economic transformation of the sector, and ultimately broader economic participation of South Africans in renewable energy.”

Sector optimism

Following the Minister’s 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.” Read more…

Hampering sector development

The delays in new IPP projects under the REIPPP programme have caused emerging markets to endure much of the impact.

An estimated 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.

Prior to the announcement being made on Friday, chair of the South African Renewable Energy Council (SAREC), Brenda Martin, explained in a statement: “The industry had already attracted a substantial eco-system of service industries and was beginning to leverage investment in heavy up-stream fabrication industries.”

Eskom’s apparent objections to signing agreements with preferred renewable bidders ignore these broad benefits and instead focus the utility’s selfish interests, SAREC noted. Read more…

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.