IPP Signing and South Africa’s Energy Future

Spotlight Activity: IPP Signing and South Africa’s Energy Future

Earlier this year in Parliament, South Africa’s new energy minister Jeff Radebe said “Our people need energy, we require cleaner energy. We have our commitments in terms of the National Development Plan. Our own commitments in terms of our international obligations. Our people deserve better. And this project I believe, will assist us to reignite our economy and to get those much-needed jobs for our people.” With this in mind, on 8 March he announced that 27 renewable energy independent power projects (REIPPs) would be signed with Eskom on 13 March.

This was a welcomed announcement for most in the clean energy movement as, for 2 years, there has been uncertainty over the country’s renewable energy industry. This seemed like a more active approach from government to scale up renewable energy efforts, an acceptance to moving to the cheapest forms of electricity and that implementation on a wider scale would help to reverse the state power utility Eskom’s drastic upward cost trend and drive power prices down.

According to Minister Radebe, the independent power producer (IPPs) projects would contribute 2,305 megawatts of electricity with the R56 billion investment set to create more than 60,000 jobs over the next few years. Though welcomed by many, the deal quickly faced opposition, in particular from Transform RSA NPC (a non-profit company) and National Union of Metal Workers of South Africa (Numsa). On 12 March, Transform RSA and Numsa attempted to interdict the signing.

In a statement Numsa said they had concerns that the renewable energy project would cause an increase in the price of electricity which would have the largest impact on the poor. The statement said that the matter had to go to court to protect the livelihood of thousands of workers and families as they believed the signing of the contracts would be “detrimental for the working class of Mpumalanga and the country as a whole.” The move was criticized by many civil society actors. At a hearing on 27 March. Numsa and Transform RSA were not granted the interdict, but the department at the time agreed to delay the signing of the contract.

Despite the further delays the contract signing finally happened in April. The projects will be in the Northern Cape (15 new wind, solar PV and CSP projects), Eastern Cape (four new wind projects), North West (four new solar PV projects), Western Cape (two wind projects), Mpumalanga (one biomass project), and the Free State (one hydro project).

Regardless of the claims for job losses, and the eventual contract signing, the opposition from the Numsa and others does clearly highlight a cause for concern. The government has clearly failed to effectively engage with all stakeholders. South Africa is in need of a just transition, and this will only happen if inclusive transformative programmes take place, with government showing leadership in engaging and working with CSOs, Labour, Business, and other stakeholders. Unless the concerns of all sectors are addressed, as a country we will not develop sustainably towards an environmentally conscious, socially equitable and economically just society.

Status: Moving Forward

The signing of the IPPs is a good first move in ensuring a more sustainable energy grid for the country. It shows that the government is willing to move forward with upscaling renewable energy.

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