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Radebe Shines Light on Renewable Energy IPPs

February 25, 2019

Department of Energy

Some of the benefits of the Renewable Energy Independent Power Producers (IPP) Programme include R209.4bn in private sector investment over eight years, the creation of 38 701 job years and a South African equity shareholding of R31.4bn of total equity of R60.9bn.

The energy minister, Jeff Radebe, highlighted this during a media conference on IPPs.

He also emphasized that the renewable energy IPPs are “cost neutral to Eskom as the cost is passed onto the consumer.”

Competitive bidding results in the best available prices for procurement.

The minister made it clear that Eskom does not incur losses flowing from the IPP Programme.

“Since 2013, Eskom has not incurred a cent in buying electricity from the Independent Power Producers which they have not been able to recover through the tariff allowance.”

The minister also declared that Eskom is “NOT borrowing money for buying the electricity generated by IPPs or for funding the construction of the IPPs”.

He added that, up to 2018, Eskom has presented annual positive earnings before interest payment, taxes, the provision for depreciation and the amortization of assets.

Therefore, the “financial losses of Eskom cannot be attributable to the introduction of the renewable energy programme”.

The minister pointed out that Eskom’s financial problems are “mostly related to the cost increases, including the increased interest during construction, associated with the delay of the new-build projects, Medupi, Kusile and Ingula”.

As regards government’s policy on coal power stations, more detail will be provided with the imminent finalisation of the IRP update.