Category Archives: REIPPPP

Renewable Energy Independent Power Producer Procurement Programme

Nersa may probe whether Eskom’s refusal to sign renewables PPAs contravened licence

Engineering NEws, 11 May, 2017

he electricity subcommittee of the National Energy Regulator of South Africa (Nersa) will recommend that the Energy Regulator institute a formal investigation into a complaint that Eskom was flouting the conditions of its licence by refusing to conclude power purchase agreements (PPAs) for 37 renewable-energyprojects procured by the Department of Energy.

Spokesperson Charles Hlebela said the next meeting of the Energy Regulator would take place on May 25, and confirmed that, at its meeting on May 3, Nersa’s electricity subcommittee had endorsed the probe, following a preliminary investigation. Should it proceed, the subcommittee wants Mbulelo Ncetezo, the regulator member responsible for electricity, to chair the probe.

Here is the full article

Eskom renewables impasse over

BusinessDay, 13 February, 2017.

Eskom caused alarm in the sector in July 2016 when it said it would not sign on any more IPPs to the grid because of concerns about affordability

The deadlock between Eskom and independent power producers (IPPs) appears to have broken, with several IPPs having received budget quotes from the power utility indicating what the cost will be of connecting them to the grid.

(EG-SA Ed. note: Great news!
Now Eskom must be made to compensate the IPPs who suffered losses because of the unnecessary delays to financial closure.
Also Lynne Brown representing the DPE (sole shareholder of Eskom), must be held responsible for the cost of the delays and the damage to the renewable energy industry, and Koko must go before he does further damage.)

The quotes preceded President Jacob Zuma’s undertaking in his state of the nation address that Eskom would sign the outstanding power purchase agreements for renewable energy in line with the procured rounds. Eskom caused alarm in the sector in July 2016 when it said it would not sign on any more IPPs to the grid because of concerns about affordability.

On Friday, South African Renewable Energy Council (Sarec) chairwoman Brenda Martin said she had been informed about the budget quotes sent out.

She had also learnt that Eskom had approached the IPP office in the Department of Energy to set dates for the signing of power purchase agreements with the producers.

“So it does look as if things are moving,” she said.

Martin said the budget quotes had been sent to IPPs regardless of the agreed tariff at which they would sell electricity to Eskom. This is despite Eskom’s insistence it would sign them up only to a price of 62c/kWh.

A total of 21 of the 37 IPPs with outstanding power purchase agreements received budget quotes. This included the 10 small bid winners announced two weeks ago. Martin said Sarec’s remaining concern was that all the bidders get their budget quotes confirmed.

On Friday, Eskom spokesman Khulu Phasiwe said 2,383MW of renewable power purchase agreements — about 37 — remained to be signed. To date, Eskom had signed 64 agreements for 4,000MW and two for open-cycle turbines for more than 1,000MW.

Phasiwe said the unsigned agreements had been approved by the investment and finance committee of the Eskom board and by Public Enterprises Minister Lynne Brown. The National Energy Regulator of SA had provided the necessary assurances for cost recovery of the power purchase agreements.

Mitochondria Energy chairman Sisa Njikelana was optimistic about the deadlock being broken. Hulisani executive director Marubini Raphulu said Zuma’s comments indicated the impasse had been resolved.

“Eskom’s primary objective has always been to deliver reliable energy supply at the least cost to the consumer,” Phasiwe said. “Eskom’s position is that all energy sources, be they nuclear or renewables, should be pursued at a pace and scale that the country can afford.”

Here is the link to the article

Op-Ed: Impasse in renewable energy procurement – a political power play

Greg Austin, Daily Maverick, 7 February, 2017.

While it has been interesting to see the level of debate around the price of electricity, much of this is mere noise and overlooks the fundamental questions of how we supply our future energy needs at the lowest cost, in the cleanest fashion, and with the greatest economic development benefits possible. By GREG AUSTIN.

The current impasse related to renewable energy procurement under the Renewable Energy Independent Power Producer (REIPP) programme, blocked by Eskom since August 2016, is political theatre that is highly detrimental to South Africa’s immediate and future economic health. Immediate, as it relates to foreign direct investment into our economy, and longer term because the country’s flagship programme being stalled at the behest of the mandated buyer of the renewable electricity (Eskom), could put the final nail into our ratings downgrade coffin.

Let alone diversifying our electricity supply mix for the long-term future while keeping abreast with the latest in generation technologies. We certainly started in the right direction: in 2014, investment into renewables in South Africa accounted for 84% of all foreign direct investment; in 2016, this had dwindled to close to zero. It’s a shambles and a disgrace.

The illegality of Eskom’s refusal to sign the Power Purchase Agreements (PPAs) with the renewable generators, while clear to those in the industry, is now laid bare for all to see by the recent legal opinion which states, unequivocally, that Eskom is bound by law to comply with the Department of Energy’s REIPP RFP and the subsequent awarding of projects to so-called preferred bidders from Rounds 4 and 4.5 of the REIPPP with whom it has to sign the agreements.

Were Eskom and their government shareholder to simply obey the law, the REIPP procurement process – together with its associated profound economic and socio-economic impacts – would naturally continue to deliver on its reliability, cost effectiveness and low-risk (to the consumer) investment approach…

Here is the full article

Start electricity reform process now before another crisis

Anton Eberhard in Engineering News, 26 August, 2016.

South Africa has not had load shedding for nearly a year. This is a welcome development after years of power cuts that constrained economic growth. Electricity consumption has more or less flattened out, giving the national utility, Eskom, more space to catch up on maintenance and meet demand.

But all is not well in the country’s electricity sector.

There are challenges around rising costs and electricitytariffs. Further improvements are needed in technical and commercial performance. And Eskom has to raise sufficient finance to complete its investment programme. This comes at a time when National Treasury has no fiscal space for further equity injections.

On top of this, municipal electricity distributors are not investing adequately in maintenance and service delivery. This could have catastrophic consequences for security and reliability of supply in the future.

The current period provides an opportune time to consider the electricity sector’s medium and long-term future. Is the sector’s current structure fit-for-purpose? Does it provide asustainable platform to achieve national goals and objectives?

Read more…

More solar thermal projects, with storage, set to enter SA power mix

South Africa is poised to add yet more concentrating solar power (CSP) capacity, with two additional preferred projects named by the Department of Energy (DoE) and two others reaching financial close in December.

The development brings to seven the number of active CSP projects being pursued by independent power producers in the country’s sun-drenched Northern Cape province. In addition, Eskom is pursuing its own CSP project near Upington in the same province.

The 100 MW Kathu Solar Park and the 100 MW Redstone Solar Thermal Power project were named as the latest preferred bidders, while the DoE and Eskom concluded power purchase, implementation and direct agreements for the 100 MW Xina and the 100 MW Karoshoek Solar One projects, identified as preferred bidders during the third bid window under South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
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