Why do IPPs get such a bad rap in SA? An energy specialist explains

The introduction of Independent Power Producers (IPPs) contracts to help address South Africa's energy crisis has become a contentious issue.

Sustainable development specialist Lauren Hermanus explains that the government introduced the IPP programme primarily because the state doesn't have money to invest in the expansion energy generation.

Read: Eskom in need of structural reform, says energy expert

But the IPP programme has caused some political controversy, with labour unions suggesting that IPPs s will result in job losses in the coal industry.

These IPPs have been pitted in competition with Eskom's coal fire generation which has been increasingly non-competitive and very expensive.

Lauren Hermanus, UCT research associate and co-founder of Power Futures SA

Furthermore, Hermanus says some critics believe that the private sector's profit motive could, in the future, clash with the mandate to deliver electricity at an affordable and accessible manner.

Also read: Eskom unbundling could be South Africa's Brexit, argues economist

South Africa is suspicious of private sector participation in the delivery of goods and services that have a social benefit.

Lauren Hermanus, UCT research associate and co-founder of Power Futures SA

Hermanus discussed the importance of IPPs and how they can be sustainably incorporated into SA's energy mix.

Listen to the discussion on The Eusebius McKiaser Show:


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