Sarec in showdown with the coal lobby

Legal advice sought over IPPs

THE SA RENEWABLE Energy Council (Sarec) said it was taking legal advice on behalf of its members after the SA Coal Transporters Forum (CTF) filed court papers in the High Court to stop the government from signing independent power producers (IPP) programmes yesterday.

“Sarec is currently taking legal advice on behalf of its associate members and considering the options available to them. We hope to have clarity by Monday,” a spokesperson said.

Sarec is an an umbrella body to the industry associations representing specific renewable energy technologies and has accused Eskom of dragging its feet on the conclusion of power purchase agreements with 37 IPPs, which it said was putting about R58 billion at risk.

In the court papers, Eskom is the first respondent, the National Energy Regulator of SA (Nersa) – the body which sets electricity prices – is the second respondent, the Energy Minister is the third respondent and 35 independent power producers are also listed as respondents.

Interdicted

In the papers, the CTF wants Eskom, the designated buyer of electricity from IPPs to be interdicted from signing any power purchase agreements with the 35 entities in the fourth bid window and onward including small projects.

It said the interdict was pending Nersa’s decision taken in terms of Section 10 of the National Regulator Act 40 of 2004 to agreements in respect to the need for new generation capacity, the types and sources from which electricity was needed, as well as the people to whom the electricity generating licences should be issued among others.

Nersa’s head of communications, Charles Hlebela, declined to comment yesterday.

‘Hold horses’

Eskom spokesperson, Khulu Phasiwe, said the government had asked the state-owned power utility to “hold its horses” on the programme.

“It is clear that the energy department wants us to sign the IPP programme, and it will tell us once it has a way forward of the process. They are trying to come up with a way forward to determine scale and pace of the process,” he said.

The filing of the papers comes after the Energy Minister Mmamoloko Kubayi delayed the process saying she wanted to speak to Minister of Public Enterprises Lynne Brown first.

It was reported that deputy director for policy planning in the Energy Department, Ompie Aphane, told parliament last week that there were six steps that needed to be completed first.

Among the steps listed was the need to update the integrated resource plan to define the “pace and scale of new generation capacity”. This Aphane said would be completed by next February.

It was reported that Aphane had said that the problem was that the projects resulted in “a higher cost to Eskom than it could recover through tariffs paid by its customers”.

The country is expecting coal consumption to be reduced to 10 million tons by 2021 as part of government’s policy and in line with the country’s climate change commitment.