http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.35Change: -0.04
R/$ = 10.72Change: -0.04
Au 1283.30 $/ozChange: 1.05
Pt 1464.50 $/ozChange: 3.50
 
 
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  
 
 
May 05, 2011

Renewable energy developers say new tariffs could halt investments

Back
Construction|Pretoria|Africa|CoAL|Energy|Gas|GreenCape Initiative|PROJECT|Projects|Renewable Energy|Renewable-Energy|Solafrica Thermal Energy|Africa|South Africa|Energy|Landfill Gas Project Developers|Renewable Energy|Renewable Energy Development|Renewable Energy Feed-in Tariff|Wind Energy|Davin Chown|Francois|Johannes Van Den Berg|Prabashen Govender|Thembani Bukula|The Nersa Refit Review
Construction||Africa|CoAL|Gas|PROJECT|Projects|Renewable Energy|Renewable-Energy||Africa||Energy|Wind Energy||
construction|pretoria|africa-company|coal|energy-company|gas-company|greencape-initiative|project|projects|renewable-energy|renewable-energy-company|solafrica-thermal-energy|africa|south-africa|energy|landfill-gas-project-developers|renewable-energy-industry-term|renewable-energy-development|renewable-energy-feed-in-tariff|wind-energy|davin-chown|francois|johannes-van-den-berg|prabashen-govender|thembani-bukula|the-nersa-refit-review
© Reuse this



Wind, solar, biomass and landfill gas project developers speaking at the National Energy Regulator of South Africa’s (Nersa’s) public hearings into the renewable energy feed-in tariff (Refit) review, were in agreement that the revised tariffs were unsuitable to stimulate a renewable energy development in South Africa.

Gathered at Nersa’s head office in Pretoria on Thursday, various company representatives indicated that the revised tariffs, which were released to the surprise of the industry in March, would render many projects, which were in advanced stages of development, unbankable.

The proposed tariffs, which were significantly lower than the 2009 tariffs, would “render the industry stillborn”, said Solafrica Thermal Energy representative Prabashen Govender.

Mainstream renewable energy South Africa MD Davin Chown emphasised the positive socio-economic and macroeconomic benefits that the Refit would deliver for South Africa, such as rural, agricultural and skills development, and said that lower Refit rates would disable project developers from delivering these.

“The revised tariffs are not adequate to seed the industry. Developers will struggle to bring projects to financial close,” said Chown, suggesting that the prices indicated by Nersa in 2009 be applied for the first procurement round until 2013.

Red Cap Investments MD Mark Tanton added that the review had created fresh uncertainty in the renewable energy market.

He agreed that a review of tariffs was necessary, and should take place. However, the decisions taken during the review process should only be applied with a three-year lag, thus decisions would be made well ahead of time and create clarity for investors.

South African Wind Energy Association (Sawea) CEO Johannes van den Berg supported this, stating that if need be, the revised tariffs could be applied from 2014, when the industry had gained more local experience with construction, operation and maintenance of renewable energy facilities.

It was, however, strongly articulated by the wind industry that the Refit was preferred over a competitive bidding process, which could create a risk that projects never became operational.

Van den Berg said that the biggest challenge currently facing the industry association was to maintain investor confidence over the next 12 to 18 months, given the slow Refit roll-out and general regulatory hurdles and costs.

GreenCape Initiative CEO Francois du Plessis said that the Nersa Refit review has created a lot of uncertainty in the market, and had turned away investors. He noted that the higher risk and uncertainty meant that investors would require higher returns, which were not forthcoming with the lower tariffs.

Tanton described the initial Refit tariffs as a beacon, and urged the regulator to once again uphold the principles of the 2009 decision.

He further noted that there were rumours within the industry that the Refit would be scrapped entirely, and bidding would take place on a lowest cost energy price for every kilowatt hour. Tanton urged Nersa to ensure that this did not happen. “Please do the industry a favour and ensure that the Refit is upheld,” he reiterated.

The Refit was viewed by renewable energy project developers as the best way to create adequate incentives to attract investors to the fledgling market in South Africa.

The roll-out of renewable energy would diversify South Africa's coal-heavy generation mix.

Nersa electricity subcommittee chairperson Thembani Bukula said that the regulator received some 200 written submissions regarding the Refit review, and would listen to 20 oral presentations on Thursday, with more scheduled for Friday.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
An aloe plant in the foreground as construction gets under way at the Amakhala Emoyeni wind farm project site
Work has officially started at Cennergi’s R3.5-billion Amakhala Emoyeni wind farm, located near Bedford, in the Eastern Cape. The 138 MW project was among the 19 renewable-energy and seven wind projects selected following the second bid window under the South...
South African electricity tariffs are likely to increase by more than the 8% already sanctioned for the year starting April 1, 2015, after the energy regulator determined on Wednesday that Eskom had under recovered R7.82-billion in revenue between 2010 and 2013. The...
Article contains comments
Article contains comments
More
 
 
Latest News
Independent, black-owned and managed investment holding company Southern Palace Properties has acquired an 8% stake in Growthpoint Properties from the Public Investment Corporation’s (PIC’s) Government Employees Pension Fund (GEPF) for R4.5-billion. Standard Bank...
Shareholders of JSE-listed real estate investment trusts (REITs) Octodec and Premium Properties have approved the proposed merger of the two companies, creating a combined property fund that will attract a market capitalisation in excess of R5-billion and comprise...
The Metal and Engineering Industries Bargaining Council (MEIBC) this week called on employees and employers to exercise restraint as the metals and engineering industries resumed operations following a four-week strike, stating that it regretted the strike’s...
More
 
 
Recent Research Reports
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.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Updated 7 hours ago South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
SINGLE EXPERIMENT An artist’s impression of OCO-2 in orbit
Updated 7 hours ago The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
RICE TAG The real costs of operating Rea Vaya have become clear
Updated 7 hours ago Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
Updated 7 hours ago A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
Updated 7 hours ago The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...
 
 
 
 
 
 
 
 
 
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