27 August 2014

South Africa intervenes in energy deals to help meet emissions reduction targets

South African Minister of Energy Tina Joemat-Pettersson will address weaknesses in the commissioning process of renewable energy projects with the aim of removing some of the obstacles currently facing investors.

The government in South Africa is looking to reduce the use of coal in electricity generation and is adding 3,725 megawatts (MW) of renewable energy capacity by the end of 2016 through five rounds of tenders, three of which have been allocated.

Joemat-Pettersson said: “For the next round we want to intervene so that local players do have a fair share. Obviously we can do nothing about those that have already been decided on.”

The department on 24 November is scheduled to announce the preferred bidders in a fourth round of the renewables projects.

Joemat-Pettersson continued: “The first round, as you heard, gave 20-year contracts to companies and there was only a small percentage of localisation. There’s obviously some good in the model, but there are obviously some weaknesses.”

South African electricity public utility Eskom has connected 21 renewable energy projects by independent producers, with 1,076 megawatts of capacity, to the grid, according to the companies annual report released last month.

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