The state of SA’s in­de­pen­dent power

Mail & Guardian - - Business -

O To date, 112 projects have been suc­cess­fully pro­cured dur­ing the Re­new­able En­ergy In­de­pen­dent Power Pro­duc­ers Pro­cure­ment Pro­gramme (REI4P) bid win­dows com­pleted at the end of 2015. Of these, 54 have reached com­mer­cial op­er­a­tion date and have con­trib­uted 2.9GW to the na­tional grid.

O The av­er­age lead time of the op­er­a­tional IPPs un­der the REI4P has been 1.8 years and were within bud­get in 98% of cases.

O Since 2012, the REI4P has at­tracted R201.8-bil­lion in in­vest­ment, 25% of which has been for­eign di­rect in­vest­ment and 75% do­mes­tic. The de­layed projects have a value of R58-bil­lion.

O By the end of 2015, the tar­iff for util­ity-scale wind and so­lar pho­to­voltaic en­ergy was 62c per kilo­watthour. Con­cen­trated so­lar power was R3.09/kWh. The tar­iff for baseload

En­ergy Con­sult­ing Ser­vices writes: “The price cap is lower than what many projects bid at a cou­ple of years ago, and may be an un­bank­able level for some. In par­tic­u­lar, the CSP [con­cen­trated so­lar power] (100MW), small hy­dro (5MW) and biomass (25MW) projects in­cluded in this de­ter­mi­na­tion will have the most dif­fi­culty if held to the same price cap.”

He added that the price cap also doesn’t ac­count for the ef­fects the squeeze on project costs will have on the other ben­e­fits of the projects, such as lo­cal con­tent, job cre­ation and so­cioe­co­nomic de­vel­op­ment of coal IPPs in 2016 was R1.03/kWh. The new coal-fired power sta­tions Medupi and Kusile fi­nal costs will de­pend on when they are com­pleted but in 2016 they were R1.05/kWh and R1.16/kWh re­spec­tively.

O South Africa is the largest wind-power pro­ducer in Africa, fifth in the world for con­cen­trated power gen­er­a­tion, and 10th for util­ity-scale so­lar power. — lo­cal com­mu­ni­ties — all these are now at risk of be­ing cut.

Web­ber Wentzel’s le­gal ad­vice to the South African Re­new­able En­ergy Coun­cil in Novem­ber last year was that the pre­ferred bid­ders have a right to ap­proach a court to en­force the con­clu­sion of the power pur­chase agree­ments, and that they have a rea­son­able prospect of suc­cess.

A re­new­ables in­dus­try in­sider said: “If I were one of these IPPs, es­pe­cially the con­cen­trated so­lar power guys, I would sue.”

But Davin Chown, the chair­per­son of the South African Pho­to­voltaic In­dus­try As­so­ci­a­tion (Sapvia), said a po­ten­tially pro­tracted le­gal case was not thought to be in the in­dus­try’s best in­ter­est, al­though it is an op­tion.

He thought the min­is­ter’s an­nounce­ment, af­ter years of si­lence, is a pos­i­tive de­vel­op­ment. “There’s been this block­age for two years now caus­ing huge prob­lems for peo­ple and or­gan­i­sa­tions and hav­ing a mas­sive im­pact on the mar­ket.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.