Fellow Energy Enthusiasts,
The past month has been full of happenings and drama in the energy sector, despite us spending a significant part of the month in the dark:
On 6 April the Department of Mineral Resources and Energy (“DMRE”) opened the 6th bid window of the Renewable Energy Independent Power Producer Procurement Programme (“REIPPPP”) with a view to procuring 2 600MW of renewable energy (1 600MW onshore wind and 1 000MW solar PV) with a bid submission date of 11 August 2022. However, despite opening a new bid window, PPAs for bid window 5 have still not been signed. The current proposed signature date is between July and September 2022.
Commercial close in the Risk Mitigation Independent Power Producer Procurement Programme (“RMIPPPP”) has again been postponed, for the 4th time. Considering that no new date has yet been provided for closing, it is now looking increasingly likely that these ’emergency projects’ will only sign their PPAs after the date the RFP originally proposed as the cut-off date for COD, being the end of June 2022. That is if some of the projects ever do reach commercial close. The Karpowership projects continue to be subject to challenges, the latest being two separate challenges by civil advocacy groups, the Green Connection and OUTA, to the decision by NERSA to grant Karpowership generation licenses. Needless to say, a NERSA licence is a prerequisite for reaching financial close. In addition, Eskom has purportedly requested an indemnity from Karpowership in respect of ‘any adverse outcomes from corruption allegations’. Apparently, Karpowership has declined to provide this.
Eskom’s request for an indemnity is an interesting indication of a stronger commitment to corporate governance by the state-owned entity’s board. We have also seen that the current Eskom board is not going to allow themselves to be the patsies for years of mismanagement which have resulted in rolling blackouts which are set to continue. However, the big news of the month, as far as Eskom goes, was the showdown between the Standing Committee on Public Accounts (“SCOPA”) chairperson, Mkhuleko Hlengwa, and Eskom board member, Busisiwe Mavuso. After Mavuso stated that the current Eskom board and CEO André De Ruyter would not be the ‘fall guy for ANC led-government[’s] … mess’ at Medupi and Kusile, Hlengwa responded in a manner which, by his own admission, could have been ‘handled better’. He held Mavuso in contempt of Parliament and told her that he would not stand for such ‘theatrics’, and she either needed to ‘behave [herself] or excuse [herself] from [the] meeting’. She excused herself. Needless to say, Hlengwa’s behaviour led to a public outcry and his own political party (Inkatha Freedom Party (“IFP”)) required him to ‘reflect’ on his behaviour which resulted in an apology to Mavuso. The Democratic Alliance has requested an investigation by Parliament into Hlengwa’s conduct and so this matter remains about as far from finalised as Medupi and Kusile.