Minister of mineral resources & energy Gwede Mantashe told parliament on Friday that while his department was working to get 91 independent power producer (IPP) projects going, renewables would take too long to resolve Eskom’s load-shedding crisis.
Mantashe was updating a portfolio committee on the government’s IPP projects after a week of intense load-shedding.
Finance minister Enoch Godongwana announced in his budget speech on Wednesday a R254bn debt relief package for the embattled power utility, which will result in the national fiscus taking on a huge chunk of Eskom’s debt in the medium term.
Former Eskom CEO André de Ruyter, who resigned in December, announced he would leave with immediate effect after an interview in which he said a senior official in government justified a deeply entrenched self-enrichment and patronage network in the management of the energy crisis.
Calib Cassim will serve as interim Eskom CEO while the utility looks for a permanent chief.
Responding to questions from MPs about De Ruyter’s claims in the interview with eNCA, Mantashe said De Ruyter had a responsibility to report any minister that sought or justified kickbacks to the authorities, but had failed to do so. He challenged De Ruyter to name and shame the minister involved.
“On the issues raised by the outgoing CEO of Eskom, all we need from our side is that he must not throw a stone in the bush, you see? He must say minister X has said this, minister Y has asked for a card, and minister Z has done this. That’s all we want because this thing of throwing a stone in the bush and hoping that an animal will come out running is actually unscientific,” said Mantashe.
Mantashe was one of several ministers to criticise De Ruyter over the interview. Godongwana, public enterprises minister Pravin Gordhan and minister in the presidency Mondli Gungubele all slammed the former CEO. Eskom board chair Mpho Makwana called the interview an “embarrassing” ordeal.
Asked when the IPP programme would begin easing load-shedding, Mantashe told MPs that it was misleading to say renewables would deal with load-shedding; their importance lay in creating long-term security of supply rather than addressing the immediate crisis.
He rejected suggestions that renewable energy projects should be opened up completely to the market, saying bid windows allowed the government to assess demand for renewables before making a financial commitment.
There is this notion especially driven by the DA to say do away with bid windows and just open the markets. From where I’m seated, I hear there is 9000MW of renewables in the pipeline, but there is no 9000MW that is registered with Nersa [National Energy Regulator of South Africa] yet. There is an option to open up, but what people don’t appreciate is that you must account for uptake after opening up the market, which has been done on embedded generation. Bid windows, on the other hand, give some guarantees because there are contracts with the state and parties must meet the obligations.
— Mineral resources and energy minister Gwede Mantashe
Maduna Ngobeni, head of the department’s IPP office, said the office had 13,540MW of PV solar and wind projects as well as 1,231MW of storage under the third ministerial determination.
He said the design of the new bid window 7 was under way. After being selected a bidder gets 24 months to build the plant unless it is gas powered, which typically takes longer to build than solar PV and wind.
Bid window 6 had no projects under construction yet as processes were continuing, but they were on track for possible production by next year.
“We expect that we should conclude that and get to commercial close by the end of April and immediately after that we should get to construction.”
Ngobeni said the government had 91 IPP projects operational and was working on adding more to ensure long-term stability of supply.
Jacob Mbele, director-general for mineral regulation, said if an IPP plan did not operate on schedule, there would be no cost incurred by the consumer or the government.
“All these IPPs, with the contracts that they signed, have an obligation to deliver. If IPPs for whatever reason leave the system, there are mechanisms for the department and Eskom to recoup the cost. The IPPs cannot just up and go once they sign the contracts,” said Mbele.
He said an IPP could lose two days from its contract for every day that it did not deliver power on schedule.
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