Eskom’s blocking of IPP’s will lead to future blackouts & job losses 

21 July 2016

The decision by the Board of Eskom to discontinue the signing-on of any power purchasing agreements with Independent Power Producers (IPP) will suffocate the national power grid and lead to more blackouts in the future as 2,145MW will be excluded. According to the Integrated Resource Plan (2010), 17,800 MW of the 2030 energy target is expected to be from renewable energy sources, which may be negated with this decision. 

We will therefore write to the Minister of Energy, Tina Joemat-Petterson, urging her to continue the Renewable Independent Power Producers Programme (REIPP) as a matter of national importance. This will not only guarantee South Africans the basic service of electricity but will also make headway in providing the supply of electricity needed for our economy to grow and create jobs. 

It must also be asserted that the Eskom CEO, Brian Molefe, has no authority to dictate South Africa’s energy policy. This falls squarely within the ambit of the Minister. In any event this is an about turn by Molefe who earlier this year supported the signing-on of IPP’s and is now changed his tune based on spurious grounds that this will threaten Eskom’s profit margins. This simply isn’t true. 

Large scale and small scale businesses dependent on stable electricity supply such as the manufacturing and mining industries will have no choice but to shed jobs as their costs rise and output decreases due to the blocking of IPP’s by Eskom. 

Not only have IPP’s been the main source for national electricity stability but they have resulted in the decrease in the cost of electricity from R2.37kW/h in 2013 to R0.77kW/h in 2016, which is a vast decrease of 67% in two years.

The IPP is a world class programme that has been hailed by the international community as a great example of private-public partnerships. The reasons for wanting to stop such a successful IPP programme need to be thoroughly ventilated.

The DA cares about standard of living of all South Africans and we believe that electricity should be available to all. We will fight Eskom in order to ensure that blackouts are avoided, as we cannot afford any more job losses as a result. 

Issued by Gordon MacKay, DA Shadow Minister of Energy, 21 July 2016