The South African Wind Energy Association (Sawea) has
lodged a complaint with the National Energy Regulator of South Africa
(Nersa) against Eskom’s public refusal to enter into power-purchase
agreements with independent power producers.
The association says this refusal is in violation of determinations by Energy Minister Tina Joemat-Pettersson relating to government’s renewable-energy IPP procurement programme.
In the event that Eskom is found guilty, Sawea has requested that Nersa impose the maximum legislated penalty of 10% of Eskom’s annual daily turnover for each day that Eskom continues to delay the programme.
"Sawea believes that Eskom is acting in direct contravention with government’s policy to diversify the country’s energy mix" said association CEO Johan van den Berg.
The cabinet recently reaffirmed its support for the programme. Joemat-Pettersson and the Presidency have said government remained committed to support determinations already made.
Eskom’s refusal to connect the independent power producers to the grid was based on its concern about the cost of doing so and on the fact that this would add to the surplus of electricity supply.
These concerns were discussed with government, and Joemat-Pettersson gave the assurance recently that the matter had been resolved.
However, Van den Berg said Eskom’s refusal to sign any further power-purchase agreements with renewable energy producers fell foul of the law.
The association’s complaint details Eskom’s refusal to comply with the Electricity Regulation Act, ministerial determinations and Eskom’s own transmission licence conditions. "Eskom’s current stance is incompatible with government policy, the law of the land, and its own licence conditions."
Sawea believes that Eskom is abusing its position as the operator of the national grid in order to favour its own investment in new power plants and in opposition to government’s own energy policy.
"Decisions on new power generation are the sole preserve of the minister of energy, who has issued a series of determinations designed to stimulate competition, diversify the energy mix, and reduce the country’s carbon emissions.
"Since 2011, the Renewable Energy Independent Power Producer Procurement Programme has awarded 6,590MW of renewable energy capacity to 102 independent power producers, of which at least 44 are already operational.
"In all, the programme will attract new private sector investment worth R194bn in predominantly rural areas.
"Successive capacity bidding rounds have seen tariffs fall to the point that renewables are now the cheapest form of electricity generation available to the country," Van Den Berg said. "Independent research by the CSIR has confirmed that wind and solar PV energy are, without a doubt, the lowest cost generation option for South Africa’s future."
Eskom spokesman Khulu Phasiwe said there was not a long list of IPP contracts Eskom had refused to sign. Only one contract remained unsigned, and it would cost Eskom R63bn over the 20 year life of the contract. There would be an announcement on this contract in due course, he said.
Eskom had felt the need to alert government to the cost of Eskom connecting IPPs to the grid to avoid it being blamed in future for having done so at huge financial cost and at a time when there was a surplus of electricity. According to Phasiwe, Eskom also warned that the costs of connection would be passed on to consumers by way of electricity tariff hikes.
Phasiwe insisted Eskom never refused to sign the contracts, but had agreed with the minister that where they would be financially burdensome on the utility these matters would be discussed with the minister. "We will continue to sign these contracts because they are government policy," he said.
The association says this refusal is in violation of determinations by Energy Minister Tina Joemat-Pettersson relating to government’s renewable-energy IPP procurement programme.
In the event that Eskom is found guilty, Sawea has requested that Nersa impose the maximum legislated penalty of 10% of Eskom’s annual daily turnover for each day that Eskom continues to delay the programme.
"Sawea believes that Eskom is acting in direct contravention with government’s policy to diversify the country’s energy mix" said association CEO Johan van den Berg.
The cabinet recently reaffirmed its support for the programme. Joemat-Pettersson and the Presidency have said government remained committed to support determinations already made.
Eskom’s refusal to connect the independent power producers to the grid was based on its concern about the cost of doing so and on the fact that this would add to the surplus of electricity supply.
These concerns were discussed with government, and Joemat-Pettersson gave the assurance recently that the matter had been resolved.
However, Van den Berg said Eskom’s refusal to sign any further power-purchase agreements with renewable energy producers fell foul of the law.
The association’s complaint details Eskom’s refusal to comply with the Electricity Regulation Act, ministerial determinations and Eskom’s own transmission licence conditions. "Eskom’s current stance is incompatible with government policy, the law of the land, and its own licence conditions."
Sawea believes that Eskom is abusing its position as the operator of the national grid in order to favour its own investment in new power plants and in opposition to government’s own energy policy.
"Decisions on new power generation are the sole preserve of the minister of energy, who has issued a series of determinations designed to stimulate competition, diversify the energy mix, and reduce the country’s carbon emissions.
"Since 2011, the Renewable Energy Independent Power Producer Procurement Programme has awarded 6,590MW of renewable energy capacity to 102 independent power producers, of which at least 44 are already operational.
"In all, the programme will attract new private sector investment worth R194bn in predominantly rural areas.
"Successive capacity bidding rounds have seen tariffs fall to the point that renewables are now the cheapest form of electricity generation available to the country," Van Den Berg said. "Independent research by the CSIR has confirmed that wind and solar PV energy are, without a doubt, the lowest cost generation option for South Africa’s future."
Eskom spokesman Khulu Phasiwe said there was not a long list of IPP contracts Eskom had refused to sign. Only one contract remained unsigned, and it would cost Eskom R63bn over the 20 year life of the contract. There would be an announcement on this contract in due course, he said.
Eskom had felt the need to alert government to the cost of Eskom connecting IPPs to the grid to avoid it being blamed in future for having done so at huge financial cost and at a time when there was a surplus of electricity. According to Phasiwe, Eskom also warned that the costs of connection would be passed on to consumers by way of electricity tariff hikes.
Phasiwe insisted Eskom never refused to sign the contracts, but had agreed with the minister that where they would be financially burdensome on the utility these matters would be discussed with the minister. "We will continue to sign these contracts because they are government policy," he said.
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