Following Energy Minister Jeff Radebe’s announcement that 27 long-delayed IPP contracts would be signed by Eskom, the National Union of Metalworkers of South Africa (Numsa) together with Transform RSA obtained an urgent court interdict to temporarily prevent Eskom from signing the deals. The unions believe that the IPP contracts will lead to job losses and an increase in electricity prices.

“Numsa believes that 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‚” the union said in a statement.

Irwin Jim NumsaNumsa General Secretary Irvin Jim called the interdict a victory, adding that the union was demanding the opportunity to make submissions to the National Energy Regulator of South Africa, Eskom and the Energy Minister on the IPP contracts and the implications for its members and their families. The issue will be heard at the North Gauteng High Court next week.

“The delayed investment of over R59 billion, the creation of over 13 000 construction jobs and a further 2000 operations jobs was meant to be unlocked [through the signing of the IPP contracts]. Instead, the coal lobby has sought an urgent interdict to delay the conclusion of power purchase agreements, citing already-debunked arguments relating to job losses, coal power station closures and rising electricity prices,” Brenda Martin, CEO of SAWEA said in a statement responding to the interdict.

“Let’s be reminded that REIPPPP was born out of government’s policy-embedded vision for an expansion of South Africa’s energy mix to include independent power with an associated range of clear developmental imperatives, the association noted. These include a goal-directed transition away from coal-fired power, the creation of new jobs in this transition, a direct contribution to the country’s carbon emissions reduction targets, and investment growth that would strengthen the South African economy.”

Martin pointed out that renewables already cost over 50% less than new coal-fired power, and that government policy has for years included the closure of coal-fired power stations. The associated job losses are being planned for through numerous processes currently underway – most notably processes being undertaken by the national planning commission, and electricity price increases are directly related to the extended delays and rising costs associated with Eskom’s coal build programme, she added.

“As has been demonstrated through three competitive bidding rounds, the renewable energy industry is in a strong position to contribute to the South African economy through job creation, advancing the transformation agenda, improving rural livelihoods and attracting foreign direct investment,” she concluded.

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