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South Africa

South Africa

Utility claims barrier raised

SOUTH AFRICA: State run utility Eskom has told Windpower Monthly it has approved 2.4GW of renewables power purchase agreements (PPAs), including nearly 1.3GW for wind.

Eskom had withheld PPA agreements since the summer of 2016
Eskom had withheld PPA agreements since the summer of 2016

Since summer 2016, Eskom blocked approval of the PPAs granted in South Africa's round 4 of bidding under its renewable energy independent power producer procurement programme (REIPPPP), citing excessive costs to the system.

REIPPPP has put 1.4GW of wind online between 2014 and 2016.

Eskom insisted its investment and finance committee and the public enterprises minister have approved the PPAs, and that regulator Nersa "has provided assurances for [PPA] cost recovery."

South African Wind Energy (SAWEA) chief executive Brenda Martin, however, remains sceptical.

Martin said the Independent Power Producer's Office — the watchdog for power contracts — had registered no change to the hiatus.

"More smokescreen from Eskom," said Martin.

She argued wind has proven itself inexpensive, with prices in round 4 (2015) of just ZAR 0.62/kWh ($0.047/kWh) — 40% cheaper than new coal-fired generation. She accused the utility of a smear campaign against wind.

One developer adviser confided a client was indeed talking with Eskom about the PPAs, but that the utility was imposing excessive rates for the new power lines needed for the projects involved. "A possible delaying tactic," he said.

"SAWEA have done a great job of exposing to the broad public in South Africa what is at stake in terms of jobs, community development and South Africa's future, with a logic that even President Zuma has found difficult to resist. Whether or not Eskom will follow remains to be seen," said GWEC head Steve Sawyer.

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