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IPP signing blocked by late-night interdict

Will raise cost of electricity, slash jobs union says.

Government’s long-awaited signing of agreements with 27 renewable energy independent power producer projects (IPPs) on Tuesday was blocked by an interdict that the National Union of Metalworkers of South Africa (NUMSA) and Transform RSA obtained in the North Gauteng High Court on Monday night.

After a delay of about two years newly appointed Energy minister Jeff Radebe last week announced that government and Eskom will sign 27 of the agreements pertaining to bid rounds 3.5 and 4 of the department of Energy’s acclaimed Renewable Energy Independent Power Producer Procurement (REIPPP) Programme on Tuesday morning.

Eskom caused the delay by resisting the signing, but confirmed that it was now prepared to sign the power purchase agreements that would bind it to buy renewable energy from the IPPs for 20 years.

Eskom previously argued that renewable energy is more expensive than the energy it generates from its own coal-fired power stations and tried to impose a cap on the tariffs previously negotiated between the department of Energy and the IPPs.

The Ramaphosa government however announced that it will proceed with the signing as well as the other REIPPP projects and the Eskom-cap would not apply.

In an early morning press release NUMSA said it obtained an urgent court interdict at the North Gauteng High Court to prevent Eskom from concluding the outstanding renewable energy Independent Power Producer (IPP) products, including the power purchase agreements.

In terms of the interdict Radebe gave an undertaking that he would not sign the IPP agreements, including the power purchase agreements until the hearing on March 27.

NUMSA said the signing of these contracts “would be detrimental for the working class of Mpumalanga and the country as a whole.

“The signing of the IPP means that Eskom will require less coal fired electricity. This is likely to lead to the closure of the coal fired power plants and the impact will be that at least 30 thousand working class families will suffer because of job losses.

“The IPP roll-out will raise the cost of electricity dramatically, because IPP’s cost much more than coal fired electricity,” NUMSA said.

“Electricity prices will skyrocket because of the IPP roll-out; while at the same time that VAT and the fuel price are going up, workers are being paid slave wages of R20 per hour and less. The combination of all these factors will have dire consequences for the working class and the poor.

“NUMSA is a recognized trade union at Eskom, and we demand the opportunity to make submissions to NERSA, Eskom and the Energy minister on the IPP contracts and the implications for our members and their families. Eskom was planning to sign these agreements despite the fact that a previous application, by the Coal Transporters Forum to interdict them from signing is still pending at the North Gauteng High Court.”

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Seems rather strange that NUMSA would object to renewable energy projects, yet when government issued an expression of interest on nuclear they said nothing – nuclear would also result in job losses. Maybe this is a last gasp attempt at trying to remain relevant in the SA landscape by the trade union – the trade unions need to learn the art of negotiation rather than demonstration, destruction and mayhem which is normally associated with the trade union fraternity

The IPP roll-out will raise the cost of electricity dramatically, because IPP’s cost much more than coal fired electricity,” NUMSA said.- electricity prices will skyrocket because of the IPP roll-out; while at the same time that VAT … What a load of trash , they unions continue to hold a gun against economic growth head , until we can get sustainable Electrical capacity that is both cheap and reliable (solar / wind / geothermal ) the international investor will not bring the manufacturing large scale plants to our country that we so need to offer employement and skills growth. No the small brain mentality looks at basic skill type employment ( union memberships) Vs the Bigger picture of less pollution for our crop fields/ our grandchildren and RSA global help towards reducing carbon footprint…which will ultimately attract investors to setting up semiskilled manufacturing plants in our country and thus employing directly and indirectly millions
Where as Coal stations and mines will still to a lesser degree still be required as back up – if we dont change now we will be like Angola ( all its eggs in one basket =oil) now their economy is in a mess as the world reduces the demand for that commodity ….do NUMSA thing the coal reserves will last forever ?? and the world will accept our continued 1900’s pollution technology …Wake UP and stop holding back our beloved countries development

“until we can get sustainable Electrical capacity that is both cheap and reliable”

Solar, wind and geothermal are none of these.

That’s not to say I disagree with the rest of your article regarding pollution and energy diversification.

But lets not kid ourselves.

Stan, you seem to be very adroit, erudite and immensely knowledgeable about such things. Maybe you can assist me. If Eskom purchase electricity for 86c/kWh and transport it to their buyer (e.g. a Municipality), what are the losses incurred in the grid (% of energy), what are the grid costs of the transport (c/kWh) and what is the price the municipality pays (c/kWh).

Only with these figures can one make an informed opinion as to whether the unions are talking a “load of trash” as you so elegantly put it. Evidently you have these numbers, so let’s have them…

It is the age-old fight of socialism v/s capitalism. The victim mentality against the market mentality. The redistribution mentality against the economic growth mentality. The mentality of plunder against the mentality of wealth-creation.

Although the backward socialists may win a few skirmishes, history makes it abundantly clear that in the end, capitalism always wins the war. Even Communist China chose to embrace a market economy. The last communists are hiding in South Africa, under cover, at the trade unions.

Time for a Maggie Thatcher moment to show the unions a finger

cant really blame the union, self preservation… We need strong leadership at the top as what is best for the country as a whole, and discount this short-terminism.

Well….NUMSA….by Eskom not signing will ALSO be detrimental.

Let us rephrase: it will be “detrimental to the SA taxpayer, and the whole country as a (sh.t)whole”

NUMSA you say YOU “demand”…? NO. Rephrase: we as taxpayers DEMAND that OUR money is not benefitting inefficiency!!

It’s just a matter of time before technology makes a central power producer irrelevant and just an expensive white elephant. When it starts to make sense going offgrid and doing your own thing its over for that model. And that day is coming without a doubt.

With the job losses at Eskom there will be less people to pay the Unions their premiums, hence the money that the Union is feeding off these employees will decrease. That’s why they are making such a noise abt it.They only care about their premiums payed to them and not the people.

They knew about it last week, yet last night it became urgent? Seems to me courts allow court processes to be misused.

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