President Jacob Zuma. Photo by Duane Daws

President Jacob Zuma announced on Thursday that Eskom would sign the outstanding power purchase agreement (PPAs) for renewable energy projects that had been procured during the most recent rounds of the Renewable Energy Independent Power Producer Programme (REIPPPP).

Zuma made the announcement in his State of the Nation Address, which focused strongly on the economy, but which was delivered against the backdrop of tightened security, including a controversial deployment of 441 soldiers to support the police to “maintaining law and order during the Opening of Parliament”, as well as growing opposition to his Presidency.

Besides the now customary disruptions inside Parliament led by the Economic Freedom Fighters, whose members were eventually forcibly evicted following a brawl, the Democratic Alliance sought a moment of silence for the 94 mentally ill patients who died when they were transferred to unlicensed care facilities from Life Esidimeni in 2016. The official opposition also eventually left Parliament ahead of Zuma’s address in protest over the presence of armed soldiers in the Parliamentary precinct.

Zuma said renewable energy formed an important part of the country’s energy mix, which would also include gas, nuclear, hydro and coal. “Eskom will sign the outstanding power purchase agreements for renewable energy in line with the procured rounds.”

He also stressed that government remained committed its independent power producer programmes, which would be extended beyond renewables to included coal and gas.

The President’s renewables announcement should end an impasse that has endured since the middle of 2016, when Eskom indicated that it would not sign further PPAs until it had received guidance from government on the matter. The State-owned utility argued that the capacity would raise tariffs for the consumer, as they would not be needed until at least 2021, owing to surplus capacity that had arisen as a result of a combination of lower demand, stabilised supply from the exiting coal plants and additional capacity from Eskom’s Medupi, Kusile and Ingula projects.

As a result nearly 40 projects had been left in limbo, causing distress not only among renewables investors, but also among suppliers and contractors. It had also left facilities developed to supply into the REIPPPP standing idle, including DCD Wind Towers, near Port Elizabeth, which faces possible liquidation.

Zuma’s also used the address to acknowledge that the South African economy was not growing fast enough to create the jobs required to reduce chronically high levels of unemployment which have breach 25% on the narrow definition.

He said the economy was likely to growth by only 1.3% in 2017, having expanded by just 0.5% in 2016 and reiterated that the National Development Plan remained government main guiding document for dealing with poverty, unemployment and inequality.

He described as “helpful” the partnership forged with business and labour in 2016 under the banner of the CEO Initiative, which he said had been critical to South Africa having avoided a downgrade to junk.

In a statement issued ahead of Zuma’s address by Business Leadership South Africa (BLSA) also reflected on the partnership and argued that the country would only make progress in 2017 “if we build on our successful cooperation in 2016 and work together”.

BLSA pointed to “substantive” gains arising from the cooperation between government, labour and business, including the national minimum wage, labour reforms, the establishment of a R1.5-billion small business fund and plans to offer work experience to a million young South Africans.

Source: Mining Weekly


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