‘PPA deals signed under the opening three rounds of the REIPPPP must be renegotiated’

• A representative of South Africa’s energy regulator said deals signed between 2011 and 2013 must be subject to lower tariffs to ease the financial crisis at national utility Eskom.
• The suggestion failed to convince delegates at an Africa Energy Forum panel discussion in Lisbon.

A representative of South Africa’s energy regulator has told delegates at the Africa Energy Forum (AEF), power purchase agreements (PPAs) signed in the opening three rounds of the nation’s renewables incentive program must be retroactively renegotiated.

Nomfundo Maseti, of the National Energy Regulator of South Africa, told a panel discussion at the event in Lisbon yesterday the financial crisis at national utility Eskom meant contracts signed with renewable energy project developers between 2011 and 2013 must be torn up.

Whilst she did not explicitly link the launch of the next, fifth round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) to renegotiation of the earlier contracts, Maseti made clear the next round of the renewables incentive scheme was ready to go and her preference was to find a solution to the crisis at Eskom in order to move clean energy development forward.

PPA contracts stemming from the fourth round of the REIPPPP have already been renegotiated, albeit before the original agreements had been signed off.

A live poll of delegates at the panel discussion asking whether Eskom should renegotiate the tariffs for rounds 1-3 of the REIPPPP, showed 68% of voters wanted Eskom “to respect contractual arrangements and leave the tariffs alone”.

Eskom’s financial crisis will prompt further government interventions, Anton Eberhard of the Graduate School of Business at the University of Cape Town, told the AEF. The professor told the panel Eskom’s troubles would need an innovative solution, perhaps by lowering PPA tariffs in tandem with an extension of the duration of the agreements…… Read more

Author: Ilias Tsagas

Greek-born Ilias has written for pv magazine since 2012, reporting on renewable energy news, electricity market developments and energy policy.

This article was republished with permission from PV-Magazine. Link to original article