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Projects and Energy Weekly Snippets

15 May 2017

South Africa

Energy Alert
Weekly projects and energy updates in South Africa

DoE won’t appeal nuclear ruling, but Kubayi leaves door open for new nuclear determination ahead of IRP update

Energy Minister Mmamoloko Kubayi announced on Saturday that government would not appeal the 26 April ruling of the Western Cape High Court, which declared the processes hitherto used to procure new nuclear capacity to be unconstitutional and illegal, along with three nuclear-related intergovernmental agreements (IGAs).

Nevertheless, she left the door open for the issuance of a new legally-compliant nuclear determination ahead of the finalisation of a new Integrated Resource Plan (IRP), which she confirmed would be updated only in the last quarter of the current fiscal year, which ends on 31 March 2018.

Engineering News, 13 May 2017

Brian Molefe returns as chief executive of Eskom

Brian Molefe is returning to his job as Eskom CEO on Monday – just months after stepping down in the aftermath of a furore over his links to the Gupta family.

Board spokesman Khulani Qoma confirmed his return in an interview on Radio 702 www.702.co.za on Friday.

“Definitely‚ he is coming back on Monday‚” Qoma said.

Molefe has resigned as an MP in order to resume his former position.

Business Day, 12 May 2017

Brown defends shock Molefe reinstatement, as Koko takes leave amid forensic probe

Public Enterprises Minister Lynne Brown has defended her decision to accept the Eskom board’s much-criticised recommendation that Brian Molefe be reinstated as CEO and see out his five-year contract to 2020 on the basis that it offered “better value” than the alternative of paying him a ZAR30 million pension.

The Eskom board made the shock recommendation in response to Brown’s 23 April refusal to accept the proposed pension pay-out. The board's remedy, accepted by Brown, is that the 50-year-old Molefe agree to repay any pension money received and be reinstated as CEO for the remainder of his contract period. In addition, the terms of the contract would be revised to ensure the pension plan was revalued to be more reflective of five years of service and to be in line with Cabinet-approve remuneration standards.

Engineering News, 12 May 2017

Warning issued that nuclear ruling may pose risk to legality of IPP programmes

The recent nuclear ruling, which set aside the ministerial determinations designed to facilitate the procurement of nuclear power stations, may also carry risks for the legality of the various independent power producer (IPP) procurement programmes, which are proceeding on the basis of determinations that were likewise not subjected to public consultations.

This view is expressed in a risk assessment drafted by Craig Morkel for discussion by the South African Independent Power Producer Procurement Association (SAIPPA). Morkel, who is projects director at iKapa Energy, wrote the piece in his personal capacity.

Engineering News, 11 May 2017

NERSA may probe whether Eskom’s refusal to sign renewables PPAs contravened licence

The electricity subcommittee of the National Energy Regulator of South Africa (NERSA) will recommend that the Energy Regulator institute a formal investigation into a complaint that Eskom was flouting the conditions of its licence by refusing to conclude power purchase agreements (PPAs) for 37 renewable-energy projects procured by the Department of Energy.

Spokesperson Charles Hlebela said the next meeting of the Energy Regulator would take place on 25 May, and confirmed that, at its meeting on 3 May, Nersa's electricity subcommittee had endorsed the probe, following a preliminary investigation. Should it proceed, the subcommittee wants Mbulelo Ncetezo, the regulator member responsible for electricity, to chair the probe.

Engineering News, 11 May 2017

The above reflects a summary of certain news articles published during the preceding week. It is not an expression of opinion in respect of each matter, nor may it be considered as a disclosure of advice by any employee of Hogan Lovells.

For more information contact Charles Marais or Mahashini Govender.

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