Eskom has no excuse to not sign remaining IPPs

The National Energy Regulator of South Africa (NERSA) today announced a 2.2% tariff increase. Given that Eskom will be able to apply to reclaim expenses via the Regulatory Clearing Account (RCA) which is a monitoring and tracking mechanism that compares certain uncontrollable costs and revenues to actual costs and revenues incurred by Eskom, they have no excuse to not sign the outstanding purchasing agreements with Independent Power Producers (IPP).

To date, 37 IPP contracts have not been signed as Eskom claimed that this would impact negatively on their financial situation.

However, NERSA has confirmed that tens of millions will now be available for these IPP contracts. Eskom cannot therefore claim they do not have the cash to go ahead and sign the remaining contracts.

The IPPs are a vital part of our country’s energy mix and can now produce electricity cheaper or on par with other forms of new electricity generation. These producers will also create much needed employment and direct investment into our economy.

The DA will do everything possible to ensure that the IPP programme goes ahead to ensure that electricity is produced at the best price, creating policy certainty, in a sustainable clean way and ultimately to create jobs for the 8.9 million unemployed people in South Africa.

Statement issued by Gordon Mackay MP, DA Shadow Minister of Energy, 23 February 2017