Court rules that IPP agreements can be signed

March 29th, 2018, Published in Articles: EE Publishers, Articles: Energize

The South African Wind Energy Association (SAWEA) has responded to the court’s ruling today, which has found against Numsa/Transform SA’s application to bring an urgent interdict against the signing of the procured Renewable Energy (RE) Power Purchase Agreements (PPAs).

SAWEA awaits the court’s written judgement, which will be made available early next week.  “It is our understanding that there is nothing in the law that now prevents the signing of the duly procured power purchase agreements,” said Brenda Martin, SAWEA CEO.

In its legal response to Numsa and Transform SA on Tuesday, 20th March 2018, SAWEA pointed out that planned coal-fired power station closures were unrelated to the conclusion of renewable energy PPAs, that renewable power purchase costs did not place additional financial burden on Eskom but had in fact added to Eskom’s revenue, that the current supply surplus may well be short-lived, and that renewables are South Africa’s least-cost and most flexible power investment option.

The 27 projects are anticipated to start supplying electricity into the grid approximately three years after the PPAs are signed, once power plants have been constructed and then connected to the transmission system.

Brenda Martin, SAWEA’s CEO, says that significant changes can occur in that time, as evidenced by South Africa’s past experience of load shedding. There is no reason to assume that the current surplus will still exist when the projects begin supplying electricity. The two-year delays have had a crippling effect on IPPs, which are incurring ongoing costs in excess of R2,2-million per month, which translates to just under R60-million for the account of project shareholders, including Community Trust shareholders.

In addition to these direct financial impacts, the delay has resulted in rural communities not being able to realise the benefits of local economic development and construction, the incalculable cost of deteriorating investor confidence, the effects on manufacturers, assembly plants and suppliers who have had to shut down their operations. The loss of jobs within the South African renewable energy sector and its supply chain has been significant.   Once the PPAs are signed, Martin says, the renewable energy industry can begin the task of recovery and resume its trajectory of growth that this much-admired programme was well on track to realising back in 2015.

Contact Brenda Martin, SAWEA, Tel 011 214-0660,



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