http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.01Change: 0.00
R/$ = 10.67Change: -0.04
Au 1287.51 $/ozChange: 0.01
Pt 1424.50 $/ozChange: -1.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jun 29, 2011

Developers call for sustainable form of renewable energy procurement

Back
Sawea CEO Johan van den Berg discusses the country's Refit programme. Editing: Lionel da Silva.
Meridian Economics partner Mark Pickering discusses the Refit programme. Editing: Lionel da Silva.
previous next
Engineering|Johannesburg|Africa|Eskom|Renewable Energy|Renewable-Energy|System|Systems|Africa|South Africa|Building|Electricity|Energy|Energy Industry Associations|Power Producers|Renewable Energy|Renewable Energy Drive|Renewable Energy Feed-in Tariff|Renewable Energy Procurement|Systems|Wind Energy|Chris Haw|Dipuo Peters|Infrastructure|Johan Van Den Berg|Mark Pickering|Power|Van Den Bergh|The Refit Review
Engineering||Africa|Eskom|Renewable Energy|Renewable-Energy|System|Systems|Africa||Building|Energy|Systems|Wind Energy|Infrastructure|Power||
engineering|johannesburg|africa-company|eskom|renewable-energy|renewable-energy-company|system|systems-company|africa|south-africa|building|electricity|energy|energy-industry-associations|power-producers|renewable-energy-industry-term|renewable-energy-drive|renewable-energy-feed-in-tariff|renewable-energy-procurement|systems|wind-energy|chris-haw|dipuo-peters|infrastructure|johan-van-den-berg|mark-pickering|power|van-den-bergh|the-refit-review
© Reuse this



Renewable energy industry associations on Wednesday appealed to policy makers to engage with the industry to ensure that a sustainable form of renewable energy procurement could get under way.

This comes as concern mounts that government may decide to proceed on a basis of competitive bidding, rather than the renewable energy feed-in tariff (Refit) programme, to procure the first round of renewable energy from independent power producers (IPPs).

Energy Minister Dipuo Peters will reportedly announce a multiple phase bidding process this week.

South African Wind Energy Association CEO Johan van den Berg said at a briefing in Johannesburg that price-competitive tender process could breach the trust on which potential wind developers have invested some R400-million, and could tarnish the country’s credibility.

He said that shifting away from the Refit programme could be illegal and that it would stall the renewable energy drive and stifle economic growth.

The National Energy Regulator of South Africa (Nersa) is still believed to favour the Refit model, while the Department of Energy and the National Treasury questioned the legality of the programme and Nersa’s authority to set upfront tariffs.

Under the Refit programme, Nersa sets tariffs at which IPPs can sell electricity to a buyer, which is currently Eskom. The IPPs would have to apply to Nersa for a licence to sell electricity at the predetermined tariff.

In a joint statement, the wind, solar photovoltaic and concentrated solar power associations said that they had received legal option on the legality of Refit.

The associations said that the opinion stated that the Refit programme was legal, as long as Nersa retained some discretion for itself, should circumstances at the time of issuing a licence require the tariff to be amended.

“The implication is that any procurement process launched now, other that Refit, would be illegal unless Nersa, as the independent regulator, has approved it.”

Van den Berg said that industry would consider its position once the final shape of the procurement drive was known. “I am deeply concerned that it only takes a single stakeholder legally challenging the process to cause extremely long delays and a general loss of momentum,” he added.

South African Photovoltaic Industry Association chairperson Dr Chris Haw said that government had to “urgently” engage with the renewable energy industry, if it planned to change its method of procurement.

Van den Berg said that the Refit would be a strong enabler to fund added benefits, such as job creation, skills transfer and local content in a nascent industry. He added that, by the time the price discussion arose again, the industry should be large enough to succeed irrespective of new price determinations.

In March, Nersa surprised the market with its proposed downward adjustments to the tariffs, on the basis of technological and price developments internationally.

A Nersa spokesperson confirmed to Engineering News Online that the outcome of the Refit review, which was initially expected by mid-June, would be announced next week.

The review has been a frustration for relevant stakeholders, but Van den Bergh said that it was key to “get it right”.

“If it takes another month to see how the procurement process will work and ensure it meets the requirements of what investors have been promised – it is a month well spent. The current delay is not the issue, as there is a lot of positive momentum towards the procurement process. We need to ensure that extra time is allocated to make sure the Refit is sustainable,” he told Engineering News Online.

Meridian Economics, an infrastructure development and regulation firm, partner Mark Pickering said that the uncertainty surrounding the Refit was a reflection of South Africa adapting to how to incorporate renewable energy power.

“Feed-in tariffs have worked well internationally, where producers were guaranteed a price that could work. In those countries, there is a power market, which can absorb different prices and is used to having different prices. But, in South Africa, there is a regulated system, in which the regulator determines the prices [with a reasonable return]. This is a different paradigm.

“The challenge is that the two systems are not fitting well together and what government is trying to do is to establish how to make it work. The result is going to be that we end up with a form of competitive bidding on the price for renewables, which leads to a more standard rate-of-return,” he explained.

Pickering said it was necessary for South Africa to engage in discussion on whether to open up a wholesale power market, as well as on the implementation of such a possibility, and that country needed to move away from the simple regulative-return approach.

In moving forward with the Refit, it was necessary to prevent a hasty, half-informed, unilateral decision, to continue to engage the authorities with a view towards collaborative problem solving and building the broader consensus among renewable energy players, and keeping an open mind, said Van den Berg.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
Mining and energy solutions firm Cronimet Mining Power Solutions officially broke ground and began its engineering, procurement and construction (EPC) contracting activities for a large Namibian photovoltaic (PV) power plant on August 18. The PV project is located in...
To bolster its argument that renewable energy is critical to combating climate change, the World Wide Fund for Nature-South Africa (WWF-SA) has commissioned a series of reports that investigates the state of renewable energy in the country, focusing on how it can be...
In the last three years, gas generator-sets have risen in prominence in Europe and the US, owing to stricter emission laws and lower gas prices. The shale gas boom in the US and increasing adoption of biogas in Europe have kept the gas generator-sets market in the...
Article contains comments
More
 
 
Latest News
The pump prices of both grades of petrol and wholesale diesel, as well as the maximum retail prices of illuminating paraffin and liquefied petroleum gas (LPG), are set to decrease from September 3, the Department of Energy said on Friday. Petrol would drop by 67c/l,...
The amount owed to municipalities for services has continued to rise, reaching R94-billion by June, compared with the R93.3-billion recorded in December. Households still accounted for the bulk of the aggregate municipal consumer debts; however, this had declined...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks