Renewables body urges new Eskom chief to restore communications and momentum

14th November 2016

By: Terence Creamer

Creamer Media Editor

  

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The South African Renewable Energy Council (Sarec) has expressed the hope that the new CEO of Eskom will restore “constructive communication” with the renewable-energy industry, which it says has faced “increasingly irrational and inaccurate criticism” during Brian Molefe’s tenure.

Molefe announced on November 11 that he would be stepping down as CEO in light of having featured prominently in the Public Protector’s ‘State of Capture’ report.

Molefe denied any wrongdoing in relation to his dealings with the Gupta-family-linked Tegeta and expressed confidence that he would eventually clear his name.

However, the report used cellphone records to suggest that a close relationship existed between Molefe and Ajay Gupta.

It also observed that Tegeta appeared to benefit from Eskom’s conflict with Glencore over the Optimum mine, which was later bought out of business rescue by Tegeta. In addition, a hurriedly approved R660-million prepayment to Tegeta for Arnot coal could have been used to fund the Optimum transaction after the miner failed to raise bank finance.

Sarec board member Mike Levington said the organisation, which represents the wind, solar and energy efficiency industry bodies, called for a “shift of attitude from the country’s electricity public utility”.

He indicated that the industry had, in the main, enjoyed a constructive working relationship with Eskom around the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) since its inception in 2012.

“We have, however, found the increasingly irrational and inaccurate criticisms leveled at renewable energy and the REIPPPP by Mr Molefe and Mr [Matshela] Koko in recent months difficult to fathom, particularly since neither has ever sought to engage with the industry directly through well-established platforms to do this,” Levington lamented.

Public Enterprises Minister Lynne Brown has indicated that she would work with the board to ensure stability. However, some media reports have suggested that Koko may be in line to replace Molefe.

Koko and Molefe have been at the forefront of questioning both the cost and efficacy of renewables, while also making the case for the building of nuclear power stations.

Molefe has, on several occasions, questioned the affordability of renewables and has also suggested that the programme should possibly be scaled back in light of changed circumstances. Eskom, he has argued, currently has a capacity “surplus”, which is expected to widen as additional Medupi and Kusile units are brought into commercial operation.

In defiance of stated policy, Eskom refused earlier this year to sign new power purchase agreements, which has delayed some 26 projects with a combined investment value of around R50-billion.

Sarec argues that the utility’s actions have undermined investor confidence and job creation and have also created confusion around energy policy.

“We hope that the appointment of a new chief executive will lead to constructive communication between Eskom and Sarec, as well as reinvigoration of momentum in the REIPPPP, the financial close of the Redstone concentrated solar power project from round 3, the 26 projects from round 4 and the small independent power producer programme, and the announcement of the expedited round of preferred bidders,” Levington said.

It is expected that after the closing of round 4 and the expedited round, the combined investment into renewables would have grown from close to R200-billion to over R250-billion.

Edited by Creamer Media Reporter

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