National Energy Commission

Opinion/Readers’ Response

Power Purchase Agreements between French conglomerate and Reunion Island could be enlightening

I read with interest the setting up of the wide-membership National Energy Commission (NEC) to review in depth the energy and electricity generation and demand scenarios for the short/medium and long terms. Numerous questions of energy strategy to ensure autonomy with a safe, secure and reliable network, in a greener environment and with effective and fair pricing will no doubt be taken on board.

Many of us will recall the days bagasse was burned to generate steam for the sugar factories during the harvest season, but the excess bagasse was a cumbersome waste which offered few industrially viable avenues of storage, transformation or value addition. Until sometime in the late eighties when it was found that it could be dried up further, pressed and pelletised suitably for burning in adapted coal-fired generators to produce electricity that could serve the factory in harvest season and the excess sold to CEB.

In the early nineties it seems that Sechilienne-SIDEC, the French conglomerate resulting from mergers of Charbonnages de France and other French firms, gave operational life to the first coal-bagasse cogeneration plant at the Bois Rouge sugar factory in Reunion island and has, since those days, carved itself a speciality niche in the generation of electricity from bagasse and other bio-resources in the Indian Ocean and Caribbean islands.

It appears from the early press reports of the NEC that the Sechilienne-SIDEC has been a major partner in Mauritius as part of its drive to entrench this new niche, leading to the strong concerns that have been expressed that the Independent Power Producer (IPP) contracts, where Sechilienne-SIDEC is a major partner, are unfair to the CEB and Mauritian public at large, despite whatever role and advice tendered by the World Bank and the European Investment Bank to the various governments in place since the early nineties.

Given the similarities of context between Reunion and Mauritius, I trust the NEC will find it useful to inquire into the respective contracts. In particular,

a) the general terms and conditions of Power Purchase Agreements between SIDEC and the EEDF (if that’s the public service in Reunion island) and if the dice is heavily loaded there too so that all risks are passed on to the consumer and the CEB while the producer reaps all profits, whatever the formula;

b) since bagasse belongs to all the cane planters and producers indiscriminately, how and under what terms and conditions is bagasse purchased in Reunion from the outlet of sugar factories and the revenues distributed to planters on a cane tonnage pro-rata basis;

c) if the governing relations and contracts between SIDEC Independent Power Producers and the EEDF are significantly different in Reunion, one has to assume that they may not have benefited from expert advice tendered to us by World Bank and the European Investment Bank. We trust that the NEC would not find it beyond its mandate to hear from and inquire how such institutions led us up the garden path since the nineties, when the dogma was about privatisation at all costs.

It is tragic that a national resource has become a source of greed and hampers a society at large that would no doubt welcome that a green source of renewable energy be fully tapped provided it is seen to be fair and gainful to all parties.

By TK Rai
Rose Hill

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