QUO VADIS AFRICAN WIND ENERGY INDUSTRY?

Most are not aware that the initial plan by the National Energy Regulator NERSA to introduce an attractive feed-in tariff ( 12,5 Euro Cents/kWh) had been changed into a bidding process, which aims at very low electricity tariffs ( 0,85 Euro Cents/kWh).

The introduced bidding process is extremely expensive for developers and results in unattractive returns especially for foreign investors. The only winners are the legal advisors and large companies, which can absorb any losses within their overall operations.

Since developers and investors are fearful of not being selected as preferred bidders nobody is really raising their voices and complains, except for a lonely and courageous comment from Doug Kuni, MD of the South African Independent Power Producers Association (SAIPP), which was published recently in the ESI-AFRICA Journal, copy of which is printed in full below. The bidding process is unacceptable complicated and expensive and preferred bids selected in November last year have still not even reached financial close.

Since South Africa is obviously the gateway to Sub-Saharan Africa any delays in implementing projects here to generate electricity from wind, creating a new industry, jobs and attract local and foreign investments will considerably also delay the future of Wind power in the rest of Africa.

The present situation is again proof of the fact well-known all over the world, that the only successful regulatory instrument would be the introduction of a feed-in tariff and not a bidding process. Hope to see some of you at the Husum Wind Fair 18. - 22. September. Can be reached there at +49 1577 874 4018, if possible by sms.