http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.93Change: 0.00
R/$ = 12.67Change: -0.01
Au 1095.49 $/ozChange: 0.31
Pt 984.00 $/ozChange: 2.00
 
 
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 Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 05, 2011

Renewable energy developers say new tariffs could halt investments

Back
Construction|Africa|CoAL|Gas|PROJECT|Projects|Renewable Energy|Renewable-Energy|Africa|Energy|Maintenance|Wind Energy
Construction|Africa|CoAL|Gas|PROJECT|Projects|Renewable Energy|Renewable-Energy|Africa|Energy|Maintenance|Wind Energy
construction|africa-company|coal|gas|project|projects|renewable-energy|renewable-energy-company|africa|energy|maintenance|wind-energy
© 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 Renewable Energy News
A “record” $700-million in guarantees has been secured from the World Bank for Ghana’s Sankofa gas project to advance the West African nation’s energy transformation. The World Bank approved a $500-million International Development Association payment guarantee to...
KIERAN WHYTE The renewable energy independent power producer procurement programme has proven to be a “hugely successful” South African business model
The South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has proven to be so successful in South Africa that the same model could be replicated across Africa, especially amid the current drive towards using cleaner sources of...
Article contains comments
South Africa’s Solar Water Heating Manufacturers Cluster of South Africa (SWH-Mancosa) is taking active steps to reinvigorate the solar-geyser sector, which has been left in a “precarious” position following the termination of the Eskom rebate programme in April and...
Article contains comments
Article contains comments
More
 
 
Latest News
Embattled South African steel producer ArcelorMittal South Africa (AMSA) has offered insight into the “fair pricing model” it has tabled before government in return for tariff protection and a government stipulation that locally manufactured steel be designated for...
Telecommunications group Telkom on Friday said it had posted a 1.7% uptick in net revenue for the three months to June 30, on the back of a strong performance by mobile on data revenue and higher fixed-line subscription revenue. Mobile net revenue for the first three...
Dangote Cement revised its 2015 spending plans to $1-billion from the $700-million estimated nine months ago after it commissioned two new African plants this June, Nigeria's biggest listed company said on Friday. The company, majority owned by billionaire Aliko...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Daimler truck test engineer Dirk Stranz pushes one button, and then retracts his hands from the steering wheel of the Mercedes-Benz Future Truck 2025. “And now the truck is driving itself.”
The statutory body responsible for skills development and support in the banking sector, BANKSETA, was investing R68-million in the capacity building project of the University of Venda (UniVen), announced Bankseta company secretary Caroline King at a media event in...
LIONEL MOYAL Cloud services providers must compete against other cloud services providers for business by providing up-to-date systems and services
Legacy information technology (IT) systems are becoming increasingly obsolete because of the maturity, efficiencies and cost effectiveness of cloud-based IT services, says information and communication technology major T-Systems subsidiary Intervate head Lionel...
ARMANDÉ KRUGER Balancing the collection and processing of data must be aligned to strategy
Many complementary services enable companies to derive broad value from data inside and outside them. The complexity of data management means that companies’ strategies determine the various data systems and functions they will use, says PBT Group regional sales...
The South African Civil Aviation Authority (SACAA) has announced that it had awarded the country’s first remotely piloted aircraft systems (RPAS) pilot’s licence. It was issued on Friday, July 10, to SACAA employee and qualified commercial pilot Nicole Swart,...
 
 
 
 
 
 
 
 
 
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
Subscribe Now for $96 Close
Subscribe Now for $96