NERSA to formally investigate Eskom’s refusal to sign PPAs

May 11th, 2017, Published in Articles: EE Publishers, Articles: Energize

 

Brenda Martin

The National Energy Regulator’s (NERSA’s) electricity sub-committee has responded to a complaint issued by the South African Wind Energy Association (SAWEA), indicating that it has launched a formal investigation into Eskom’s conduct.  This follows a preliminary investigation, which found that there was sufficient grounds to warrant further action.

Brenda Martin, the CEO of SAWEA, says the wind association has received confirmation from NERSA that an expedited investigation into whether Eskom, by refusing the sign power purchase agreements (PPAs) is in contravention of its licence, has now commenced. The body is awaiting the timeline associated with this process, which could culminate with a ruling by a NERSA tribunal. Based on previous communications with the regulator, it is likely that the process will be concluded within two weeks, Martin says.

SAWEA declared a dispute during October 2016, requesting the regulator to undertake an investigation into the power utility’s continued unwillingness to honour the Department of Energy’s PPAs with renewable energy generating independent power producers.

The association has requested that if Eskom is found to be guilty of failing to comply with its licence conditions, the regulator impose a penalty, being 10% of its’ annual turnover per day, commencing on the day of receipt of the notice of contravention. SAWEA has also confirmed that in subsequent communications with NERSA, the association extended the complaint to include consideration of budget quote escalation effects.

Martin says that the industry association’s primary intention is to achieve financial closure of  PPAs, and hopes that the utility will comply with the legal framework for power purchase, so that penalties do not need to be imposed.

The South African Renewable Energy Council (SAREC) together with a number of individual independent power producers have all subsequently joined the complaint as interested and affected parties.  The industry believes that Eskom, which supplies about 95% of the country’s electricity and holds a near monopoly on bulk electricity, is simply seeking to resist government’s commitment to energy security underpinned by an expanded supply mix.

Contact Brenda Martin, SAWEA, Tel 011 214-0660, brenda@sawea.co.za

 

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