Eskom could face legal action over PPAs, warns South Africa Renewable Energy Council

Facebook
Twitter
LinkedIn
Reddit
Email
South Africa's renewable energy sector will not hesitate to take legal action for the unsigned PPAs under the government's procurement programme. Source: Flickr/Gavin Fordham

Eskom may face legal action over its delay to fulfil power purchase agreements (PPAs) for renewable projects, the South African renewable Energy Council (Sarec) has said.

The country’s state utility Eskom announced back in August that it would no longer sign PPAs with IPPs under the government’s procurement programme (REIPPPP), citing strain on the grid caused by renewables’ variable generation.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

However, the decision has left the renewable energy sector in a R50 billion (US$3.63 billion) limbo alongside 15,000 possible jobs, according to Sarec chairperson Brenda Martin.

Talking to local outlet Fin 24, Martin said Eskom is not giving the support needed to the country’s promising renewables sector.

“[This] is ludicrous when considering our current economic climate. All political sentiment suggests that there is full support for this to happen, so we really are confused about why is it that Eskom is just digging its heels in,” she said.

In the same interview, Sarec director Mark Pickering insinuated that the utility was “hoarding cash” for its nuclear agenda. 2.2GW of preferred bidders are still yet to procure in Round 4 of the programme, and could be further undermined by Eskom’s staunch support for Department of Energy proposals to procure 9.6GW of nuclear energy.

The combination of pushing nuclear and refusing to purchase renewable power from IPPs has left Sarec no choice but to redress the issue.

“We have the option of talking to the government or we have the option of going to the courts,” Pickering said.

Eskom still contends however that the reasons for the delay are to do with financing and logistics.

“The ongoing growth in power purchase agreements with independent power producers should be rolled out at a scale and pace that the country can afford,” Eskom told PV Tech last month. “Furthermore, we need to engage a new thought process on how to fund the Independent Power Producers (IPPs) Bid Windows 1 to 3.5 instead of unfairly passing the cost through to the consumer.”  

Read Next

Premium
May 6, 2024
JP Casey explores some of the latest trends shaping Africa's solar sector, where the C&I segment in particular is surging ahead.
May 1, 2024
The first two solar PV projects from the sixth round of South Africa’s state renewable energy tender – representing 360MW capacity - have been approved and reached commercial close.
April 26, 2024
Solar tracker provider Gamechange Solar has secured a deal to supply 500MW of trackers to a group of solar PV projects in Southern Africa.
April 19, 2024
The largest solar-plus-storage project in the Southern Hemisphere explains South Africa's effort to mitigate its energy security situation.
April 15, 2024
Pure New Energy (PNE) has sold the 240MW Khauta solar project in South Africa to the NOA Group, an energy company based in the country.
Premium
April 1, 2024
Gareth Simkins examines the winning projects of AR5 and looks ahead to assess how solar is likely to fare in future rounds.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
May 29, 2024
11am (EDT) / 5pm (CEST)
Solar Media Events
June 4, 2024
London, UK
Upcoming Webinars
June 11, 2024
3:00 PM (BST) / 4:00 PM (CEST)
Solar Media Events
July 2, 2024
Athens, Greece