https://www.engineeringnews.co.za

Malmström raises EU’s concern over South Africa's stance towards renewables IPPs

17th October 2017

By: Terence Creamer

Creamer Media Editor

     

Font size: - +

European Commissioner for Trade Cecilia Malmström confirmed on Tuesday that she had communicated the European Union’s (EU’s) unhappiness over Eskom’s refusal to enter into contracts with renewable-energy independent power producers (IPPs), some of which are European, directly with the South African government.

Malmström is in South Africa this week to promote opportunities associated with the recently concluded Economic Partnership Agreement (EPA) between the EU and six Southern African countries, including South Africa, Botswana, Lesotho, Mozambique, Namibia and Swaziland. The EU-Southern African Development Community EPA came into force just over a year ago on October 10, 2016.

However, Malmström also used the visit to raise Europe’s concern over areas of policy uncertainty in South Africa, including the prevailing uncertainty relating to the signing of power purchase agreements (PPAs) for renewable-energy projects legally procured by South Africa’s Department of Energy in late 2015.

The commissioner did not disclose details of her discussion with Trade and Industry Minister Dr Rob Davies, confirming only that the IPP issue had been raised as a particular area of concern. "Renewable-energy IPPs are worried, because investors want predictability,” she said.

On September 1, South Africa’s former Energy Minister Mmamoloko Kubayi, who was replaced by State Security Minister David Mahlobo in another surprise Cabinet reshuffle by President Jacob Zuma on Tuesday, said that PPAs for 26 outstanding renewable-energy projects would be signed by October 28.

However, Kubayi, who is now Communications Minister, also stipulated that all the projects would be subject to a 77c/kWh tariff cap, rather than the tariff procured during bid windows 3.5 and 4 of the Renewable Energy Independent Power Producer Procurement Programme.

While there was initial support for the breaking of the impasse, solar and wind IPPs had since grown reluctant to embrace what was held up as a compromise. It is believed that some IPPs are again considering their legal options.

A legal opinion secured by the South African Renewable Energy Council in 2017 stated that the IPPs “would be entitled to approach a court to enforce the signature of the PPAs”.

Edited by Creamer Media Reporter

Comments

Showroom

Universal Storage Systems (SA)
Universal Storage Systems (SA)

South African leader in Steel -Racking, -Shelving, and -Mezzanine flooring. Universal has innovated an approach which encompasses conceptualising,...

VISIT SHOWROOM 
Yale Lifting Solutions
Yale Lifting Solutions

Yale Lifting Solutions is a leading supplier of lifting and material handling equipment in Southern Africa. Yale offers a wide range of quality...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Photo of Terence Creamer
The NTCSA officially launched
11th October 2024 By: Creamer Media Reporter
Magazine round up | 11 October 2024
Magazine round up | 11 October 2024
11th October 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.091 0.142s - 170pq - 2rq
Subscribe Now