The Department of Energy has officially disclosed the names of the first 28 renewable energy Independent Power Producer (IPP) preferred bidders.

The move towards a more open energy market is a positive development, and this announcement should be welcomed.

For some time now, the Democratic Alliance (DA) has been calling on government to open the energy market to power producers who operate entirely independently of state ownership.

IPPs will provide competition in a market currently dominated by Eskom’s monopoly. This will help to lower prices for businesses and individual consumers, which will help to encourage economic growth.

The preferred IPP bidders will provide roughly 40% of the envisioned 3725 MW of energy to be provided by renewable sources by 2016. The Department of Energy needs to ensure that the process of securing the remaining 60% is completed as soon as possible. This will send the right signal to the market that government is indeed serious about meeting its targets. It also provides the stability and certainty necessary for attracting foreign direct investment in this sector.

The move to cleaner energy stands to benefit all South Africans, provided the bidding process is executed with integrity. The DA will therefore be conducting its own due diligence investigations into the companies that have been selected as preferred bidders.

Opening up the market to independent power producers creates extensive job opportunities, and alleviates the burden of health problems associated with coal produced energy.

The DA will continue to encourage government to create a regulatory environment that fosters a competitive energy market. Cleaner energy stands to benefit all South Africans, especially the poor, and government must do all it can to promote its development.