Wind farm owners in South Africa are mulling a legal challenge to a decision by public utility Eskom to curtail operations.
Eskom has cited reduced demand resulting from the coronavirus pandemic as the reason.
The industry is seeking legal counsel on whether the reduced electricity demand as a result of COVID-19 constitutes ‘Force Majeure’ as declared by Eskom.
South African Wind Energy Association (SAWEA) chief executive Ntombifuthi Ntuli said: “It is concerning that wind energy power producers have not been given an opportunity to engage on this matter with Eskom, despite both Eskom and government confirming that operational independent power producers are in fact an essential service, just five days ago.
“The industry will be approaching Eskom with a view to finding a constructive resolution that does not prejudice the country nor the power producers.”
The government issued an official notice on 25 March 2020 classifying electricity production, supply and maintenance as essential services.
Since then Eskom has proposed curtailing wind farms, claiming ‘Force Majeure’.
SAWEA said energy experts the wind industry has consulted deem reduced demand as a normal system event, which would therefore not imply a Force Majeure event.
“Additionally, experts raise the point that South Africa is, in actual fact, not currently facing a structural oversupply and the fact that Eskom is still struggling to keep the system stable, despite shift in demand patterns,” said SAWEA in a statement.
South Africa has 22 operational wind farms, with a combined installed capacity of 1980MW.
The energy specialists consulted by the sector have stated should power curtailment be required, the wind sector is able to “curtail on short notice and in precise increments”.
Energy producers must be paid a deemed energy fee in line with the philosophy that all power that would have been generated is paid for, according to the agreements in place, said SAWEA.
“Eskom has indicated in their letter to IPPs that they will make provision for the extension of the power purchase agreement period to make up for the curtailment period, however, we are concerned about the immediate impact this will have on shareholders, particularly, BBBEE partners and community trusts, who have loans to repay,” added Ntuli.
The 12 wind farms under construction in the country have gone into lockdown, with a confirmation that delays, directly related to the lockdown period, will not attract any penalties.