South Africa

South Africa

South Africa braces itself for REFIT axe

SOUTH AFRICA: The South African wind industry is anxiously awaiting the outcome of the government’s review of its feed in tariff (REFIT) rates, as rumours circulate that the scheme may be scrapped altogether.

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The rates were announced in 2009 and were due to come into effect in April this year. They have been credited with generating investment in the country. Over the past year, Vestas, Goldwind and Suzlon have opened South African offices.

But in March the national energy regulator (NERSA) announced a potential 24% reduction of the rates from $0.181/KWh announced in 2009 to $0.135/KWh in 2011, $0.136/KWh in 2012 and US$0.137/KWh in 2013. 

These were due to be confirmed in mid-June, but this has again been delayed and it is now unclear when they will be announced.

There have been rumours that the Department of Energy and the Treasury are claiming that the REFIT programme is unlawful because it does not comply with the legislation that requires public entities to engage in a competitive procurement of goods and services. Instead, a competitive tender process may be used.

However, last month, minister of energy Dipuo Peters said that the first round of REFIT would use the rates set in 2009 and that the lower rates would only apply to later rounds.

South Africa Wind Energy Association CEO Johan van den Berg said a cancelation of the rate could damage the country’s wind industry. He said: "Luring investors into the country with a REFIT only to ditch it at the eleventh hour would harm investor confidence not only in our energy sector, but in the country more generally."

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