Eskom power station (File pic: Eskom website)

In The News South Africa

SA court grants union interdict blocking renewable energy deal

JOHANNESBURG, March 13  -The National Union of Metalworkers of South Africa said it had obtained an urgent court interdict preventing power utility Eskom from signing renewable energy contracts on Tuesday with 27 independent power producers.

The move will be a blow for independent producers who say the deals would provide cheaper and more sustainable forms of electricity for the country.

“The court found that our application meets the standard for urgency and therefore granted us the interdict,” said Numsa, which filed the application together with lobby group Transform RSA.

“Furthermore, the energy minister was forced to give an undertaking in court that he would not sign the IPP agreements on Tuesday until the matter has been given a full hearing by the high court.”

Officials at Eskom declined to comment, referring the African News Agency to the department of energy whose officials were not immediately reachable for comment.

Eskom supplies about 95 percent of South Africa’s electricity, most of it coal-fired, and energy experts say it has been reluctant to sign new deals with independent power producers.

Numsa said the adoption of renewable energy would mean that Eskom required less coal fired electricity, likely leading to the closure of coal fired power plants and causing job losses that would impact at least 30,000 families.

Unions also insist the IPP roll out would raise the cost of electricity dramatically, because IPPs cost more than coal fired electricity.

But renewable energy proponents say implementation of solar and wind electricity on a national scale would drive power prices down.

“The change that is happening in the energy industry should be seen as a great opportunity, rather than a threat for Numsa members,” Dom Wills, CEO of solar project developer SOLA Future Energy said on Tuesday.

“Coal based industries are diminishing worldwide; renewables, in contrast, are booming.  Over 70 percent of new energy construction worldwide over the next 20 years is expected to come from the renewables sector.”

Wills said the latest prices of renewables were around half the cost of traditional coal-fired power.

“This continuing cost trend presents an opportunity for  a sector-wide transition, resulting in cheaper energy and cleaner, safer and long term employment prospects, from which Numsa members can benefit,” Wills added.

The government said the deals with the 27 independent power producers would effectively unlock R56 billion of investments over the next two to three years and create more than 61,000 jobs.

The high court is set to hear the matter on March 27.


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