People illuminated by car lights as they walk on the streets during a bout of load-shedding. SA's long-anticipated shift to renewable energy may face setbacks due to external factors driving up the costs to enter the market. Picture: REUTERS/SIPHIWE SIBEKO
The winners include EDF, Scatec, Engie and Mainstream Renewable Power. They are among nine companies pledging to supply nearly 4,600MW of power in the next two years that would help bring an end to Eskom’s woes. The average tariff in last year’s round was R0.429 per kilowatt hour for a solar plant — a 10th of the tariff a decade ago. Wind was a quarter of its 2011 level at R0.495 per kWh.
In addition, supply-chain disruptions linked to the pandemic have also increased costs, such as shipping, and a weakening rand has made imports of turbines and solar modules more expensive. We need the [renewable] power. We are doing all we can within the ambit of the law to help [IPPs] reach financial closure.The SA Photovoltaic Industry Association
“Either the government resolves the issues with a solution that suits all, or reaching financial close will be a significant challenge,” the executive, who asked not to be named, said.Scatec reached financial close on July 19 for three projects under the on-demand round, but declined to comment on the status for its other projects.