SA government postpones signing renewable energy deal pending union court challenge
13 Mar 2018 - by
The National Union of Metalworkers of South Africa said it had obtained an urgent court interdict preventing power utility Eskom from signing renewable energy contracts on Tuesday with 27 independent power producers.
But Energy Minister Jeff Radebe, who was due to sign the deal on behalf of the government, denied an interdict had been issued, saying the high court had merely postponed a hearing on the matter to March 27 and he had voluntarily deferred the signing until then.
Regardless, the postponement of the deal is a setback for independent producers who say Eskom has dragged its feet on signing it.
Numsa, which filed the application together with lobby group Transform RSA, said the court found that "our application meets the standard for urgency and therefore granted us the interdict".
"Furthermore, the energy minister was forced to give an undertaking in court that he would not sign the IPP agreements on Tuesday until the matter has been given a full hearing by the high court," it added.
But in his own statement, Radebe said the court had refused to grant an interim interdict against him or Eskom but instead postponed the matter.
"In the absence of an interdict ... nothing prevented Eskom and IPPs from signing the agreements as scheduled by me for Tuesday, 13 March 2018," he said.
"However, counsel for the minister informed the court that whilst there is no interdict granted, the signing will however be postponed until the 27 March 2018 when the matter is finally disposed of in court."
Eskom supplies about 95 percent of South Africa's electricity, most of it coal-fired, and energy experts say it has been reluctant to sign new deals with independent power producers.
Numsa said the adoption of renewable energy would mean that Eskom required less coal-fired electricity, likely leading to the closure of coal-fired power plants and causing job losses that would impact at least 30 000 families.
Unions also insist the IPP roll-out would raise the cost of electricity dramatically, because IPPs cost more than coal-fired electricity.
But renewable energy proponents say implementation of solar and wind electricity on a national scale would drive power prices down.
“The change that is happening in the energy industry should be seen as a great opportunity, rather than a threat for Numsa members,” Dom Wills, CEO of solar project developer SOLA Future Energy said on Tuesday.
"Coal-based industries are diminishing worldwide; renewables, in contrast, are booming. Over 70 percent of new energy construction worldwide over the next 20 years is expected to come from the renewables sector.”
Wills said the latest prices of renewables were around half the cost of traditional coal-fired power.
“This continuing cost trend presents an opportunity for a sector-wide transition, resulting in cheaper energy and cleaner, safer and long-term employment prospects, from which Numsa members can benefit,” Wills added.
The government said the deals with the 27 independent power producers would effectively unlock R56 billion of investments over the next two to three years and create more than 61 000 jobs.