The future of the government’s independent power producers’ programme, which has been lauded as a global success, is uncertain following an Eskom board decision that it will not sign any power purchase agreements with private producers after the current round is finalised, without engagement over the matter.
Eskom chairman, Ben Ngubane, said the board had concerns about the Renewable Independent Power Producers Programme (REIPPP), and there was a need for the government to look at all the implications for Eskom and its future.
As an indication that enthusiasm for the REIPPP is cooling, in a speech at the Power-Gen Conference in Johannesburg, Public Enterprises Minister Lynne Brown indicated the programme was reaching its limit, saying that for further renewable energy to be connected to the grid, major investments in the increasingly constrained grid were required.
By introducing private sector companies into energy generation, the REIPPP has mobilised R195bn in direct investment and brought 2 145MW into the grid. Since 2013, prices for renewable energy have dropped from R2,37/kWh to R0,77/kWh in 2015. It is expected that in the next round, prices for renewable energy will be as low as R0,60/kWh.
Source: Business Day Live