http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.21Change: 0.04
R/$ = 11.26Change: 0.02
Au 1214.64 $/ozChange: -1.62
Pt 1283.00 $/ozChange: -5.00
 
 
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 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|GreenCape Initiative|PROJECT|Projects|Renewable Energy|Renewable-Energy|Solafrica Thermal Energy|Africa|South Africa|Energy|Landfill Gas Project Developers|Maintenance|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|PROJECT|Projects|Renewable Energy|Renewable-Energy||Africa||Energy|Maintenance|Wind Energy||
construction|pretoria|africa-company|coal|greencape-initiative|project|projects|renewable-energy|renewable-energy-company|solafrica-thermal-energy|africa|south-africa|energy|landfill-gas-project-developers|maintenance|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 Renewable Energy News
Some concern has been expressed about recent delays to South Africa’s hitherto successful Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), under which 26 projects have already been connected to the grid following three bid windows during...
Japanese carmaker Toyota has revealed the exterior design and Japanese market-guide pricing of its hydrogen-powered fuel-cell sedan, following the car’s appearance in concept form at last year's Tokyo Motor Show. The four-door saloon will be introduced in Japan...
Article contains comments
Patricia de Lille, PJ Rabie and Dominic Chennells
In a boost for renewable energy, the City of Cape Town has signed its first small-scale embedded electricity generation contract with Black River Park Investments, an office park in Observatory.  The 74 000 m2 office park uses large-scale solar power systems to...
Article contains comments
Article contains comments
More
 
 
Latest News
Protech Khuthele Holdings on Wednesday said, in a cautionary note to shareholders, that, as the failed company unwound, investigations were ongoing into its affairs. The company provided no indication of the completion date.
Private equity investors are increasingly becoming more active in Africa’s bid to narrow the $90-billion a year infrastructure funding gap constraining the continent’s growth. This was according to a survey by the Southern African Venture Capital and Private Equity...
The shortlist of innovations in the Africa Prize for Engineering Innovation was announced on Wednesday, comprising 12 new innovations from seven African countries. The shortlist announced by the UK’s Royal Academy of Engineering (RAEng) included innovations in...
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 road...
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
The latest TransUnion Vehicle Pricing Index (VPI) contains a number of small, but significant indications that the tide may at last be turning for the beleaguered used car industry. For the third successive quarter, used car inflation has increased on a year-on-year...
The South African new vehicle market is likely to reach around 630 000 units in 2014, down from the 650 000 units recorded in 2013, says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl. Van Zyl is also president of the National Association of...
Efforts by the Kenya government to increase energy generation by 5 000 MW over the next three years received a major boost following the award of a $2-billion contract to build a coal power plant in Lamu.  Despite allegations of irregular tendering process, the...
Using crafty wordplay on a well-known Internet meme, brilliant South African-born US entrepreneur and businessperson Elon Musk announced that Tesla Motors would not initiate patent lawsuits against anyone who, in good faith, wanted to use its technology. Instead,...
August new vehicle sales declined by 1.4%, to 55 722 units, compared with the same month last year. Assisted by the car rental market, the South African new passenger car market, at 37 953 units, contracted by 1 047 units, or 2.7%, compared with August last year.
 
 
 
 
 
 
 
 
 
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