Update by DMRE on independent power producer issues; briefings by the Energy Council of SA, SA Wind Energy Association, SA Photovoltaic Industry Association and the SA Independent Power Producers Association

Video The Committee convened in a virtual meeting to receive an update from the Department of Mineral Resources and Energy on the Renewable Energy Independent Power Producers Procurement Programme and the Risk Mitigation Independent Power Producers Procurement Programme. The Committee was also briefed by private sector entities representing aspects of the renewable energy sector: the Energy Council of South Africa, the South African Wind Energy Association, the South African Photovoltaic Industry Association and the South African Independent Power Producers Association. The Department and the Independent Power Producers Office presented key achievements, such as milestones in renewable capacity, job creation, and carbon reduction, alongside challenges like grid constraints and budget limitations. They discussed strategies, including targeted procurement to improve grid access and support for socio-economic development in affected communities. Members raised questions about government payments to independent power producers, local community ownership in energy projects, and Eskom’s monopoly over grid access. Discussions included renewable energy intermittency, the regulatory framework for independent power producers, and local employment in energy projects. Members asked whether the socio-economic commitments that are required of independent power producers are standardised. Representatives from the industry associations highlighted South Africa’s significant wind and solar capacity, discussing issues like regulatory bottlenecks, supply chain limitations, and skilled labour shortages. They proposed solutions such as improved community involvement, support for local manufacturing, and end-of-life management for solar photovoltaic modules. The underscored the need for the delayed regulatory reforms to facilitate grid access to be finalised. Members asked about localising the manufacturing of components for the generation of renewable energy, the prospects for generation closer to the point of use, and the roles of Eskom and the Regulator. Had the associations engaged with education institutions to establish programs that would equip individuals with the skills required for wind energy plant operations? What measures were being taken to push Eskom to stop anti-competitive practices? What was the potential for direct power sales to municipalities and could this alleviate the impact of existing grid constraints? What interactions had occurred with National Treasury and the Department of Trade, Industry and Competition to eliminate import duties on components for renewable energy projects?