Picture:REUTERS/FABIAN ANDRES CAMBERO
Picture:REUTERS/FABIAN ANDRES CAMBERO

Plans to buy emergency power, already the subject of a court challenge, faces fresh controversy after a local-content requirement for solar-panel frames was scrapped subsequent to the award of the tenders.

The 65% local-content requirement on aluminum frames for photovoltaic panels was waived by the department of trade, industry and competition on May 12.

This followed an application by ARTsolar, which, along with a local unit of China’s Seraphim Solar, will be the only beneficiaries of the exemption. The two companies will now be able to sell panels to some of the winners of contracts to supply emergency power to the national grid.

The preferred bidders were named in March and they must conclude funding arrangements and regulatory requirements by the end of July for their contracts to come into force.

The SA Photovoltaic Industry Association (Sapvia), which represents both manufacturers and importers of solar panels, said the exemption disadvantages some of its members that were unaware that the bidding requirements would be changed retrospectively.

Some SA solar panel plants have had to shut down because of the inconsistency of government demand, according to Wido Schnabel, Sapvia’s chair. “They have set up manufacturing in the past and were bitterly disappointed,” he said.

The government has vacillated when it comes to procuring renewable energy from private producers — the last tender it issued prior to this year was in 2016.

“I personally wasn’t aware” that the frames couldn’t be made locally, Gerhard Fourie, the department’s chief director of green industries, said when asked why the requirements were changed after bids had closed. The local-content exemption will only apply to the emergency power bid round, he said.

Hulamin, which processes aluminum, said it plans to invest to supply frames for future solar projects.

ARTsolar and Seraphim, which say they aren’t members of Sapvia, welcomed the exemption. Both companies plan to more than triple their production capacity.

“We were clever enough to complain,” said David Nunez Blundell, co-founder of Seraphim’s Southern Africa unit.

The controversy comes after Karpowership, a Turkish supplier of gas-fired power plants mounted on ships, was exempted from local content requirements when it was selected as a preferred bidder to supply 1,220MW of emergency electricity for 20 years.

DNG Energy has filed a legal suit demanding that it be given Karpowership’s contract.

Bloomberg News. More stories like this are available on Bloomberg.com

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