The National Union of Metalworkers of South Africa (NUMSA) and Transform SA, a transformation body representing economic growth and the advancement of underprivileged communities has secured a court interdict preventing the new Energy Minister, Mr Jeff Radebe, from signing off on 27 Power Purchase Agreements with Independent Power Producers.
The much awaited signing of the PPA’s was expected to happen on the 13 March 2018 but the new Minister will have to wait until the matter is heard in the North Gauteng High Court on March 27th 2018. NUMSA claims that signing the PPA’s will mean that Eskom will require less coal fired power stations, leading to their closure and widespread job losses for some 30000 workers.
NUMSA also claims that signing the PPA’s will cause a spike in the price of electricity because electricity supplied by the Independent Power Producers from renewable sources are more costly than from coal fired power stations. The union also wants to make representation to the national energy regulator, NERSA plus Eskom on the matter.
The country’s Renewable Energy Independent Power Producer Program (REIPP), once one of the most successful renewable energy programs in the world, has been on hold for past 2 ½ years. The signing of the outstanding 27 projects is expected to pave the way for R56.8bn in infrastructure investment to flow into the country.
The IPP projects are also expected to create more than 60000 contract jobs during the construction phase over the next two years. The local community equity share in the 27 renewable projects totals 7.1% or R1.6 billion, with the shareholders set to receive R5.9 billion in net dividends over the 20 year lifetime of the projects.
Eskom has plans to close four of its coal fired power stations in the next five years to achieve emissions compliance. These include the 2,000MW Hendrina, 1,600MW Camden, 1,000MW Komati and 3,000MW Kriel power stations. SA’s long-term energy plan to 2050, the Integrated Resource Plan, provides for the closure of 27,500MW of old coal-fired power between 2025 and 2040.
Author: Bryan Groenendaal