South Africa would do well embracing renewable energy independent power producers

03/04/2019 (South Africa)
South Africa would do well embracing renewable energy independent power producers

Hydro, wind and solar power were introduced in developed countries more than 100 years ago and grew in scale from the 1970s as concerns about environmental impact and cost of fossil fuel became prevalent. Although South Africa started giving serious consideration to large scale renewable energy supply two decades ago and started implementation over just over five years ago, there are some who vigorously oppose renewable energy independent power producers (IPPs) because they wrongly believe that IPPs are at the heart of Eskom’s quagmire.

These detractors conveniently forget the public protector’s findings, what emerged from parliament’s inquiry and some of the startling revelations at the Zondo Commission about malfeasance at Eskom. The real reasons mega projects such as Kusile, Medupi and Ingula are substantially over budget and beyond their original completion dates are becoming clearer for all to see. This has led to ballooning debt that currently stands at about R420 billion. All of this takes place whilst Eskom’s revenue growth is flat as more and more consumers, industrial users and businesses in general become more energy efficient and find alternative ways of generating electricity.

They also want the public to believe that IPPs were introduced without their knowledge. We cannot claim there were no consultations. As correctly pointed out by Minister of Energy, Jeff Radebe, recently, consultations date back to 1998 when the White Paper on Energy Policy was published.

In 2003 Government adopted the White Paper on Renewable Energy which proposed the introduction of renewables into South Africa’s energy mix. Various consultations also took place which included labour unions   through NEDLAC when the draft Integrated Resource Plan 2010-2013 (IRP 2010) was published for public comment. This included consultations on the Renewable Energy Independent Power Producer Procurement Programme (REIPPPPP). Renewable energy also featured strongly in the Green Economy Accord that was signed by social partners in November 2011 after widespread consultations with organised labour, business, government and various community constituencies at NEDLAC. Renewable energy forms an important part of our National Development Plan which was drafted after widespread consultations.    

Given the vocal opposition to IPPs in the past three years, we need to remind ourselves why we went this route in the first place. Firstly, the transition to renewable energy was brought about due to climate change and impact on health of communities as a result of fossil fuel emissions. Secondly, when blackouts started in 2007, it became quite evident that Eskom’s new build power generation had not kept up with demands from the economy. Fast forward to today, Eskom is in no position to invest in new   generation capacity due to its poor balance sheet and huge debt.  

Therefore, while Eskom management is grappling with the unenviable dual task of reducing rolling blackouts and saving the utility, South Africa would do well by embracing renewable energy IPPs, which take on full development, design, construction and plant performance risk.

 

Siyabonga Mbanjwa, regional MD of SENER Southern Africa

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