Green energy stuck in nuclear winter

PURCHASE AGREEMENTS: ESKOM PURSE REMAINS TIGHTLY SHUT

Eskom’s agreements to buy power from independent producers – who have invested R50 billion in anticipation – are a year overdue, with no light on the horizon.

The South African government is still trying to come to terms with a recent court judgment that has stopped nuclear procurement in its tracks, but the impact is affecting other technologies as well.

No new date has been set for the signing of 37 outstanding power purchase agreements with Eskom as the department of energy is trying to salvage the procurement process that suffers from the same defects that put a huge spanner in the nuclear works.

No appeal

Nevertheless, newly-appointed Energy Minister Mmamoloko Kubayi says government will not appeal the Cape High Court ruling.

The action won by Earthlife Africa set aside two section 34 determinations and a Request for Information for nuclear procurement. It also set aside decisions to table in parliament bilateral inter-governmental agreements between South Africa and Russia, the US and South Korea.

These agreements were supposed to provide the legal framework for nuclear co-operation between South Africa and the relevant countries.

Kubayi said the same process in the nuclear determination was followed for all other determinations. That would indicate that all previous determinations suffer from the same defects, namely a lack of public consultation by Nersa. That includes determinations for generation from renewable energy sources, coal and gas.

Kubayi stopped short of saying the department’s much acclaimed renewable energy independent power producer procurement (REIPPP) programme is at risk, but confirmed that no new date has been set for the signing of power purchase agreements for 37 projects that are a prerequisite for financial close.

Kubayi said the department was engaging its IPP office and wants to act proactively to prevent “being in court every day”. She said she gave instructions to review all previous determinations too. A compliant process was being developed with Nersa.

Projects represent foreign investment totalling about R50 billion and Eskom has already delayed the process for more than a year. South African Renewable Energy Council chair Brenda Martin says investors are considering their options and some might have to withdraw.

Kubayi said government remains committed to implementing its energy policy, including the procurement of 9 600Mw of nuclear generation capacity. She brushed off the court’s criticism of this as being “irrational” and said the court overreached on this point and should leave policy to the executive.

She said the procurement would go ahead even before the completion of the 2016 Integrated Resource Plan that is now only expected in the first quarter of 2018.

Kubayi said department of energy deputy director-general for nuclear energy Zizamele Smodeni Mbambo is currently engaging representatives of the US, Russia, South Korea, China and France with the aim of concluding new inter-governmental agreements before restarting nuclear procurement.

One-on-one

She said these agreements will be the result of bilateral negotiations between South Africa and the respective governments and therefore each will be unique.

Nevertheless, government negotiations will now take place within a predetermined and standard framework to prevent a situation where an agreement goes too far such as the previous one with Russia.