26 renewable energy projects set to get the green light

The South African Wind Energy Association (SAWEA) expects that the outstanding power purchase agreements (PPAs) – as part of government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) – will be signed in the first quarter of 2018.  Logistics service providers who have invested in renewable project infrastructure – to leverage opportunities created by the REIPPPP – have taken financial knocks due to the countless government delays in signing the 26 outstanding PPAs. If government comes to the party by the end of this quarter, this would give the green light for the projects which are expected to see a short-term inflow of up to R57 billion worth of foreign investment in South Africa, according to the SA Renewable Energy Council (Sarec). On its website, Sarec highlights that by 2014, investment into renewables in South Africa accounted for 84% of all foreign direct investment; a total sum of just under R200 billion. Since 2016, while approximately R57 billion worth of further renewable power investment had been secured under the programme in 2015, this sum has not entered the economy. SAWEA CEO, Brenda Martin, explained that the majority of the processes that preceded the finalisation of the PPAs had been fulfilled by the Independent Power Producers (IPP) office and the preferred bidders in mid-December. “Since all previous steps have been completed, the industry is now awaiting the final step in the process – approval by the Minister of Public Enterprises, Lynne Brown – so that the Department of Energy (DoE) can finally enter into power purchase agreements with the preferred bidders identified through due procurement process,” she said. According to Martin, the bidders of the 26 renewable energy projects remain “hopeful” that the country’s REIPPPP will allow the industry to continue to contribute to the country’s development and electricity mix. She said the bulk of the outstanding projects were earmarked for construction in the Northern Cape, which had over 60% of the preferred bid allocation, and the Eastern Cape which had 19%. The balance of the projects are located in the North West (10%), Western Cape (6%) and Mpumalanga (1%) provinces respectively. Martin pointed out that the unsigned PPAs had caused serious damage to the South African economy and investor confidence. “The jobs which have not been realised, the loss of jobs throughout the renewable energy value chain, the cost of lost investor confidence, along with the loss of public confidence in good governance, are serious considerations,” she said. Martin said SAWEA will continue to engage with government in the hope of receiving a formal notice from the minister regarding the date for conclusion of outstanding PPAs “very soon”.