R56bn renewable energy deal postponed as parties head to court

Marsha Scott
March 15, 2018

He said that coal is a dying industry that is constantly facing challenges and bleeding jobs.

In the ruling, the court says: "The respondents will have circumvented the process which is now pending before court; and the applicants will have no choice but to institute applications to review and set aside the awarding of the contracts".

Court action by a South African trade union has blocked the signing of 2.2GW of renewables contracts, dashing hopes that today would mark the end of a years-long saga that has battered confidence in the country's clean energy programme.

"This is good news for several reasons", says Dr Dom Wills, CEO of solar project developer, SOLA Future Energy.

The High Court is set to hear the case on March 27, the interdict has stopped Radebe from signing the contracts until the case brought by Numsa and Transform SA is heard.

A new date for the signing of 27 renewable energy projects will be announced following a court decision later this month, Jeff Radebe, South African Energy Minister announced today, 13 March 2018.

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But late on Monday, the National Union of Metalworkers of South Africa (Numsa) and Transform RSA approached the North Gauteng High Court to freeze the contracts, saying they would lead to jobs being lost in South Africa's coal industry.

"The IPP roll out will raise the cost of electricity dramatically, because IPPs cost much more than coal-fired electricity". Electricity prices will skyrocket because of the IPP roll out; while at the same time that Value-Added Tax and the fuel price are going up, workers are being paid slave wages of R20 per hour and less.

"Instead, the coal lobby has sought an urgent interdict to delay the conclusion of power purchase agreements, citing already-debunked arguments relating to job losses, coal power station closures and rising electricity prices". The country's power mix has always been dominated by coal.

She disputed Radebe's job-creation numbers, and said that the deal would only sustain the employment numbers claimed by the minister only in the construction phase of these renewable power stations.

The Unions argue that Eskom now has sufficient generation capacity and that additional renewables would only force coal plants offline, with the loss of jobs.

The utility favored a nuclear-build program at the time and maintained a standoff on what was once a successful program by the Department of Energy to diversify South Africa's power mix and bring in billions in foreign investment.

Other reports by MaliBehiribAe

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