Numsa’s court bid derails IPP agreements

A LAST-MINUTE high court bid by National Union of Metalworkers of South Africa (Numsa) and Transform RSA derailed yesterday’s signing of power purchase agreements with 27 independent power producers (IPPs).

Energy Minister Jeff Radebe said the North Gauteng High Court did not interdict Eskom from concluding the power purchase agreements. “However, counsel for the minister, informed the court that while there is no interdict granted, the signing will, however, be postponed until March 27, when the matter is finally disposed of in court,” said Radebe.

He said the department would defend the right of consumers in South Africa to have access to cost-efficient clean energy that brings muchneeded investment and jobs to South Africa.

Brenda Martin, the chief executive of the South African Wind Energy Association, said yesterday: “The delayed investment of more than R59 billion, the creation of more than 13 000 construction jobs and a further 2 000 operations jobs was meant to be unlocked today.”

Numsa said yesterday that the signing of the contracts would be detrimental for the working class.

“The signing of the IPP means Eskom will require less coal-fired electricity. This is likely to lead to the closure of the coal-fired power plants and the impact will be that at least 30 000 working-class families will suffer because of job losses,” Numsa said.

The IPP roll-out would raise the cost of electricity dramatically, because IPPs cost much more than coal-fired electricity.

“Electricity prices will rocket because of the IPP rollout. While at the same time that VAT and the fuel price are going up, workers are being paid slave wages of R20 an hour and less,” Numsa said.

Travis Hough, Business Unit Leader, Energy & Environment at Frost & Sullivan Africa, said yesterday that efforts to block renewable energy IPPs was unlikely to succeed. He said Numsa’s argument of increasing energy prices was misplaced.

“Solar and wind power costs have been rapidly declining and are now almost comparable to that of base load coal and nuclear. The total amount of energy that will be added to the grid through the new (power purchase agreements) is largely insignificant in comparison to the entire coal fleet being operated by Eskom,” said Hough.

The matter is set for a full hearing on March 27 in the North Gauteng High Court.