Axing of renewable energy office head a major setback, say energy experts

Energy experts say the axing of the head of the Independent
Power Producer’s office Karen Breytenbach will be a major setback to South
Africa’s renewable energy programme that will send the wrong signals to
potential investors.

They say Breytenbach – who said she was given no reason by
the Development Bank of SA or the Department of Energy as to why she had to
leave before the end of her contract – had spearheaded the team that had
built up the IPP office into a world renowned unit, drawing investment of R209bn
in renewable energy projects since 2011.

Some believe the move is because DBSA wants to get rid of
the IPP office to create a much bigger entity to handle public-private
partnerships (PPAs) across a number of infrastructure sectors, which energy
experts say will dilute the focus on renewables.

Others fear it might open the way for “corrupt
individuals” to milk the programme.  All independent power
producers’ who close deals with the government have to give 1% of the cost of
their power projects to the government. This pot of money is used to fund the
IPP office.

Chair of the SA Independent Power Producers’ Association
Thomas Garner warned that Breytenbach’s axing would have a chilling effect on
investment in the renewable energy industry.

Terrible loss

“She was excellent at her job and was absolutely
incorruptible, and was driving one of the best renewable energy programmes in
the world. Business and industry people see this as an absolute shocker.”

“It worries me. In my opinion this could be a move to
make space for a corrupt individual to take her place and to milk the
programme,” Garner said.

The IPP office was set up at the end of 2010 by the
Department of Energy, National Treasury and the DBSA. DBSA provided the initial
funding.

Harald Winkler, head of UCT’s Energy Research Centre,
described Breytenbach’s leaving as a “terrible loss”.

“She was a key person doing an excellent job and this
will be a real setback for a very important programme. Karen did a fantastic
job. Global prices for renewables continue to come down, but not having
continuity in such a key person doesn’t help the programme,” Winkler said.

Energy expert Chris Yelland said he had it on good authority
that the DBSA wanted to set up a bigger procurement platform to establish
public-private partnerships across a number of sectors that built
infrastructure, not just electricity. This was to be headed by the DBSA and
would include banks, ASISA and government.

“It took several years and a lot of painstaking work to
set up the IPP office and it is something that really works. What worries me is
if DBSA is going to build this new procurement platform to handle all sorts of
other infrastructure, it will take years and years. In the meantime they will
take their eye off the ball of the renewable energy programme, something which
exists and which is working,” Yelland said.

“Instead of building on what works, they want to start
all over.”

He said he had heard some criticism levelled at Breytenbach
that she favoured the big international companies and had not done enough to
develop local black industrialists.

“That is unfair criticism. If you are developing a
100MW power plant that takes a truly enormous amount of money to build, you
have to deal with guys who are leaders in the field around the world,”
Yelland said.

Setback

Makoma Lekalakala, head of Earthlife Africa’s Johannesburg
branch, believes Breytenbach was responsible for spearheading the investment
and rollout of the country’s renewable energy programme, helping South Africa
move towards low carbon energy generation.

“This is a setback to a just transition. We hope the
new person does not roll back her success,” Lekalakala said.

Asked to comment, the DBSA said in a statement on Tuesday
afternoon that Breytenbach’s contract had expired at the end of February 2019
when she had reached the retirement age of 60.

DBSA, DoE and National Treasury had offered Breytenbach a
contract until the end of July this year, and later another fixed term
contract, both of which she had declined. DBSA did not say when the second
contract would expire.

“Ms Breytenbach has therefore not been an employee of
DBSA since the expiry of her fixed term employment contract on 28 February
2019,” DBSA said.

However Breytenbach told Fin24 on Tuesday that she had been
given no reason for the termination of her contract, which still had nine
months to run until April 2020.

“I think they wanted someone more to their liking … Politics
is not my strength. I am a worker bee,” Breytenbach said.

She had not been told who would head the office in an acting
capacity, but added that she believed the IPP office would continue.

“We have a very good team, it is not just one person
that made it a success. No one can ignore that renewable energy is here to
stay, so I don’t think it will have an impact on the programme,”
Breytenbach said.