Sep 28, 2012
Fresh renewables delay, but DoE insists projects will be signed off in OctoberBack
Construction|Engineering|Johannesburg|Africa|Eskom|Projects|Renewable Energy|Renewable-Energy|Africa|South Africa|Energy|Dipuo Peters|Power|Operations
© Reuse this
Under the original schedule, the projects, which were named by Energy Minister Dipuo Peters in December, were expected to reach financial closure by mid-June. But the process has been delayed to enable government to finalise a support framework for Eskom, which will purchase the power produced by the wind and solar developers.
Initially, bidders were requested to extend the validity of their bids until the end of September, but they have received a subsequent request to extend the validity to the end of October. Bidders had until the close of business on September 28 to indicate that they accepted the schedule change.
The Department of Energy’s (DoE’s) Ompi Aphane has confirmed with Engineering News Online that the request had indeed been made. But he insists that the internal government processes required to finalise a government support framework for Eskom are well advanced and that government should be in a position to begin signing-off on the first projects in the coming weeks.
The signing would open the way for the construction of projects representing a collective investment value of around R46-billion and a collective capacity of 1 415 MW.
A National Treasury credit committee met to advance the matter on Thursday, September 27.
Aphane says it would be premature to comment on whether the “slippage” will result in a change to the published commercial operations deadlines for the projects, most of which are meant to be fully integrated into the national grid during 2014. The concentrated solar power projects have until 2016 to reach commercial operations.
Once all government approvals have been secured, Aphane says the focus will shift to establishing the necessary logistical arrangements for the signing of the various agreements, including the 20-year power purchase agreements with Eskom and the implementation agreements with government.
He anticipates that government will initially seek to sign two or three of these a day, and then move to accelerate the process once it becomes more accustomed to what is entailed. A central facility is likely to be established in Johannesburg to help streamline the sign-off.
In light of the first-window delays, the DoE has already confirmed schedule changes for the conclusion of the second-window process and the third bid-window submission date.
Financial close for the 19 second-round preferred bidders, initially set for December 2012, is now expected to take place between March 18 and 28, 2013.
A new third-window submission date of May 7, 2013, has also been confirmed, with the previous deadline having been October 1, 2012.
Through the REIPPP, government is aiming to procure 3 725 MW of renewables capacity, which leaves only 1 165 MW still to be allocated, owing to the fact that the current 47 preferred bidders have absorbed 2 460 MW.
However, it is possible that the DoE will approach the National Energy Regulator of South Africa during October for its concurrence on a new determination that could materially enlarge the allocation and convert the REIPPP into an ongoing procurement mechanism.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Construction News
Updated 3 hours ago The Transnet National Ports Authority (TNPA) was committed to spending R17-billion on infrastructure upgrades at the Port of Durban by 2023. In a briefing on current projects that had begun or were about to get under way at the port, Port of Durban manager Moshe...
Updated 6 hours ago China’s investment in African resources remains at a relatively early stage and is likely to increase further over the next decade, despite the economic slowdown in the world’s second-largest economy, reports South African financier Standard Bank. China’s economy...
Updated 6 hours ago Property management company Citiq has officially opened its Umhlanga Junction Extension, a 75-bed student apartment block, in Brixton, built entirely from shipping containers. Situated in Caroline Street, the striking building was erected within two months. “We...
Updated 1 hour 50 minutes ago The Gauteng Provincial Government has outlined plans to develop a handful of “mega” human settlements as part of an ambitious long-term housing development strategy aimed at narrowing the housing backlog, with plans afoot to replace informal settlements with...
Updated 2 hours 3 minutes ago While State-owned power utility Eskom was unable to cut off electricity supply to some of its neighbouring trade partners, it was able to reduce energy exports by 10% when load shedding was implemented locally. The Department of Public Enterprise explained that Eskom...
Updated 2 hours 7 minutes ago While the new tax introductions and hiked levies outlined in Finance Minister Nhlanhla Nene’s inaugural budget speech this week were likely to hit consumers hard, it was deemed the most efficient option for government to narrow its fiscal gap without hurting South...
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...