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Projects and Energy Weekly Snippets

23 January 2017

South Africa

Weekly projects and energy updates in South Africa

Brown secures an Eskom cut-off reprieve

Indebted municipalities have been handed a reprieve from scheduled power outages after Public Enterprises Minister Lynne Brown ordered Eskom to give the councils until the end of January to come up with payment plans.

This comes after Eskom said on Thursday that scheduled interruptions at Naledi, Lekwa-Teemane and Kgetlengrivier in the North West, and at Ubuntu and Renosterberg in the Northern Cape would continue.

Business Day, 20 January 2017

Eskom stifles GDP growth by refusing to sign up IPPs

A total of 37 renewable independent power producers (IPPs) are still committed to the bids they submitted to government, but need resolution of the impasse with Eskom in this quarter, says Brenda Martin, chairperson of the SA Renewable Energy Council (SAREC).

Some are already compiling plans to withdraw from the country, which would be triggered should Eskom persist with its resistance to the department of energy’s Renewable Energy Independent Power Purchase Programme (REIPPP).

Eskom has been stalling the signing of power purchase agreements with the preferred bidders in the REIPPP bid windows 3.5, 4 and 4.5, citing an oversupply of electricity from its own generation plants and what it considers to be the high tariffs agreed upon with IPPs.

MoneyWeb, 20 January 2017

Legal advice boosts IPPs' case against Eskom

The South African Renewable Energy Council says Eskom has no right to set new conditions for power purchase agreements.

Independent power producers (IPPs), who are waiting for Eskom to sign power purchase agreements (PPA), are entitled to approach the courts to force Eskom to sign these agreements, the South African Renewable Energy Council (SAREC) said on Wednesday.

SAREC, which represents 37 IPPs, said that according to the legal advice it sought, Eskom was bound by the determination of the minister of energy to conclude signing the PPA.

Business Day, 19 January 2017

Outa questions timing of publication of energy efficiency strategy, requests extension for comments

The Organisation Undoing Tax Abuse (Outa) on Wednesday called for an extension for public comments on the New Energy Efficiency Strategy (NEES), which was gazetted on 23 December.

The organisation believes the timing of the gazette’s release and the rationality of publishing an energy strategy before the Integrated Energy Plan or the Integrated Resource Plan (IRP) have been finalised, is questionable.

As such, Outa has written to Energy Minister Tina Joemat-Pettersson, requesting an extension of the comment period to 90 days after the finalisation of the IRP.

Engineering News, 18 January 2017

LNG producers offer a single-chain solution for energy demand

Seeking new ways to market their product, producers of liquefied natural gas (LNG) are turning to an age-old technique: packaging.

As demand for electricity booms in developing nations from South Africa to Chile, LNG producers are offering to supply both fuel and a power plant in partnership agreements that can lock in consumption of their product for years. For their customers, primarily governments, it means dealing with a single entity responsible for every link in the chain.

As many as five planned global projects may be developed as integrated LNG-to-power, according to the Houston-based law firm Baker Botts. LNG producers Cheniere Energy and Total have package deals either in the works or discussed, while power-plant constructor Siemens, and vessel providers such Hoegh Holdings, offer their input as partners.

Busines Day, 18 January 2017

Power producers to sue Eskom

A legal showdown is looming between Eskom and a group of renewable energy companies over Eskom’s delays in signing power purchase agreements as part of the renewable energy independent power producer procurement (REIPPP) programme. 

As the designated buyer of the power from the independent power producers (IPPs), Eskom is supposed to sign 20-year power purchase agreements with the IPPs. Since the start of the REIPPP in 2011, renewable energy projects – mainly solar and wind – have attracted investment [of] about ZAR194 billion. 

But Eskom’s delay in signing power purchase agreements with 37 IPPs has raised the ire of the renewable energy industry. The 37 IPPs are expected to inject about ZAR58 billion.

Business Report, 18 January 2017

The above reflects a summary of certain news articles published during the preceding week. It is not an expression of opinion in respect of each matter, nor may it be considered as a disclosure of advice by any employee of Hogan Lovells.

For more information contact Charles Marais or Mahashini Govender.

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