SA to export successful energy programme

SA to export successful energy programme

October 27, 2016
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The Department of Energy is looking to export SA’s successful independent power producer (IPP) renewable energy programme to other governments at the Africa Renewable Energy Forum set for Marrakech, Morocco, next month. The Africa Renewable Energy Forum, organised by EnergyNet, will gather African energy ministers and government representatives, leading investors, power developers, technology providers, financiers and multilateral agencies to deliver strategies for sustainable energy development that meet climate change requirements. At COP 21, it was determined that approximately $19 billion of finance will be provided annually by developed countries for Africa’s renewable programme by 2020. In addition, Japan announced $10 billion per year in public and private finance also to reach Africa by 2020.

New pledges to climate funds, including the Adaptation Fund, Least Developed Countries Fund, and the Green Climate Fund, added up to more than $1.5 billion. In addition, multilateral development banks have pledged to scale up climate finance in developing countries by 2020, to more than $30 billion per year. The availability of these funds will significantly hasten the pace of decisions being made by energy ministers and governments attending the forum to implement renewable projects, IPP programmes and diversify their energy mix to attract as much capital as possible into their clean energy sector.

The protagonists of these policies and funders − including JBIC, AFD, Renewable Energy Initiative, Africa50, AfDB, DBSA, World Bank, IFC and the governments of SA, Egypt, Morocco, as well as the Ecowas Centre for Renewable Energy and Energy Efficiency − will gather to promote new projects and share success stories from across the continent in a collaborative format that will showcase the most relevant and proactive partners. The Department of Energy aims to utilise the outcomes of COP 21 and COP 22 as a springboard to continued investment and Africa’s growth.

“We’ve held some fantastic meetings in the past with the best developers, investors and the most proactive governments, but this meeting is something else, the level of investor and the joined up thinking of multi-governments is extraordinary,” says Simon Gosling, EnergyNet’s group director. “From our conversations, it’s clearly all about building the right partnerships so that when the deals are done, they’re with proven and bankable partners using the best technology and investment tools – we’re very excited.”

The South African Renewable Energy Independent Power Producer Programme, implemented since 2011, has proven to be a success for the country, with 6.3GW of renewable energy procured by Eskom since its inception. This totals approximately 15% of the country’s installed power generation capacity. At the end of 2015, more than 2.2GW of the 6.3GW new procured power, had been commissioned and injected daily into the grid. According to a recent report by ratings agency Moody’s, SA had the world’s fastest growing green economy in 2015.

However, regardless of the successes, there are uncertainties regarding the future of local IPPs in the country. This after power utility Eskom wrote a letter to the Department of Energy asking for clarity or a dialogue regarding the next contracting phase of IPPs beyond bid window 4.5.  Eskom has also been accused of delaying the signing of contracts with IPPs, thereby directly affecting the viability of projects in an advanced stage of development.

Despite the setbacks, government, through the presidency and the minister of energy, has since expressed commitment to the IPP programme. “The energy contribution of independent power producers is expected to grow to approximately 7 000MW,” said energy minister Tina Joemat-Pettersson. IPPs have taken the power utility to the National Energy Regulator of SA over its failure to comply with ministerial determinations.