Signing of S African PPAs gets postponed as union intervenes

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March 13 (Renewables Now) - The South African government has faced a new obstacle to the planned signing of 27 delayed renewable power purchase agreements (PPAs), as local organisations have turned to the high court with a request for an urgent interdict.

The saga surrounding the renewables-tied PPAs was supposed to end with their signing today, but grid operator Eskom will not be able to ink the contracts before a full hearing is held on March 27, 2018.

The National Union of Metalworkers of South Africa (NUMSA) and civil society Transform RSA announced that they have managed to obtain an urgent court interdict at the North Gauteng High Court after lodging a late-night application. Energy minister Jeff Radebe, however, said that the court had refused to grant an interdict against Eskom or the Minister and that nothing prevented Eskom and the independent power producers (IPPs) from signing the deals today. The minister has still decided to postpone the signing “in the spirit of constitutionalism and the rule of law”.

The protesting trade union believes that the inking of the contracts “would be detrimental for the working class of Mpumalanga and the country as a whole”. It claims that the signing of PPAs for renewable energy would likely result in the closure of coal-fired power plants, which in turn would affect 30,000 working class families. Moreover, the union says that renewable energy would boost electricity prices.

In his own statement, Radebe pointed out that the green IPP projects will enable ZAR 56 billion (USD 3.14bn/EUR 2.54bn) of new investment in the economy over the next two to three years, and will have a significant contribution to job creation across the energy value chain.

Eskom in 2016 refused to enter into new deals with 27 IPPs due to cost issues and excess power generation capacity, causing significant delays in the development of the projects, selected under bid windows 3.5, 4 and 4.5 of the country's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The 27 projects include wind, solar photovoltaic (PV) and concentrated solar power (CSP) technologies.

(ZAR 10 = USD 0.850/EUR 0.687)

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