DA seeks meeting with Mantashe over IPP red tape

Issued by Kevin Mileham MP – DA Shadow Minister of Mineral Resources and Energy
10 Nov 2020 in News

Please find attached English and Afrikaans soundbites from Kevin Mileham MP.

The Democratic Alliance (DA) will write to the Minister of Mineral Resources and Energy, Gwede Manatshe, to request a meeting to discuss the administrative red tape that is still making it difficult for Independent Power Producers (IPPs) to increase their investment in the sector and supply more power to the national grid.

Yesterday, accompanied by my colleague Jan de Villiers MP, who is the DA constituency Head in Touwsrivier, we conducted an oversight visit to the Touwsrivier CPV Solar Project run by the Pele Energy Group (PEG). The visit forms part of the DA’s ongoing industry consultation exercise with players in the Independent Power Producer (IPP) sector following the gazetting of s34 determinations to enable electricity procurement from IPPs.

Our meeting with PEG executives revealed that, while they welcome the announcement made by Minister Mantashe to procure 11 813 MW of electricity and storage from IPPs, the process to approve applications submitted in response to Request for Proposals is still taking an inordinate amount of time. The delays are forcing most industry players to postpone further investments in their operations, in the process limiting the amount of electricity they can supply to the grid.

The DA is concerned that the lethargic approach by government in addressing the administrative drag on the operational environment of IPPs, is having a corresponding negative impact on job creation in the sector. President Ramaphosa’s avowed commitment to create new jobs in the renewable energy sector will remain a pipe dream unless his government takes steps to improve the policy environment for the IPP sector.

Even as PEG executives expressed their appreciation of the announcement made that government will soon initiate procurement bidding windows, including opening Bid Window 5 of the renewable energy IPP programme, the absence of specific timelines of when this will be implemented creates uncertainty and affects the IPPs ability to do forward planning. With the announcement made by Eskom that load shedding will continue until 2022, the lack of urgency in fast tracking integration of IPPs with the energy infrastructure will hamper the ability of the country’s economy to make a quick recovery.

The DA remains committed to playing its part in ensuring that the regulatory and policy environment offers renewable energy companies the necessary incentives to invest, create jobs and improve South Africa’s power supply. This commitment will inform our engagement with Minister Mantashe on the challenges facing the IPP sector.

Click here to read more about the DA’s plan to drive the cost of electricity down, introduce competition into the energy sector, and diversify the country’s energy sources to introduce more renewables, as well as our record of action on the electricity crisis over the last 8 years.