Refit..We told you so….


There is now some doubt whether the National Energy Regulator of SA (Nersa) could set a bound tariff which renewable energy companies would pay to Eskom following legal advice received by the SA Wind Energy Association from the Island Group of advocates, Ompi Aphane, the acting deputy director-general of the Energy Department, said on Friday.
Wim Trengove, the state counsel, noted that the Treasury had suggested that the renewable energy feed-in tariff (Refit) scheme was unlawful – that it did not comply with the competitive bidding requirement of the constitution and with the Preferential Procurement Policy Framework Act and that Nersa did not have the power to set a tariff to be charged by an independent power producer to Eskom.
Trengove, however, advised that Refit, did, in fact, allow for competitive bidding although it differed from conventional competitive bidding, which determined the product and invited bidders to compete on price. “The Refit scheme does it the other way round by determining the price and inviting bidders to compete on their suitability and the qualities of their product,” he said.
“There does not seem to be any principled distinction between a conventional procurement process which determines the product and invites bidders to compete on price, on the one hand, and the Refit scheme, which determines the price and invites bidders to compete on product, on the other.”