The South African Department of Energy (DoE) expects the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) to receive higher numbers of bid submissions this year than in previous rounds of bidding.

The REIPPPP was initiated in 2011 to encourage private-sector investment in wind, solar photovoltaic (PV), concentrated solar power (CSP), biomass and small hydro-technology energy sectors.

The programme has – through the first two bid windows – delivered 3 916 MW of electricity from 64 projects across the country. This exceeds the DoE’s first target of 3 725 MW to be generated from renewable energy by 2016, with the DoE having in the interim set a new 2016 target of 3 200 MW in December 2012.

About R150-billion in investments, one-third of which will be procured from local suppliers, has been mobilised for the programme. Most power plants will be located in rural areas and about 20 000 jobs will be created in the construction phase, with another 35 000 jobs being created for plant operations.

According to the DoE’s Independent Power Producer (IPP) renewables website, the fourth window of bidding is scheduled to start this July, with the registration date for bidders set for July 21 and bid submission on August 18, with winning bids being announced on October 28 and all relevant documents being signed on July 31 next year.

“Based on the statistics of previous rounds, we are expecting more bidders to come on board during this round. The department received 53 submissions during the first bid window in 2011, 64 submissions during the second bid window in 2012 and 89 submissions during the third round last year. The numbers increased with each round and we expect that trend to continue,” the DoE explains.

The department states that to qualify for the fourth round of bidding, bidders should meet some requirements, which are available on the IPP renewables website. These include a minimum megawatt per technology of 1 MW, a maximum capacity per plant of 10 MW for hydropower, biomass and biogas plants, 140 MW for wind plants, 75 MW for PV plants and 100 MW for CSP plants.

Bidders are also required to specify the price per technology and the price must not exceed the provided caps that have been outlined in the DoE’s request for proposal publications, while there are no caps for PV and wind technologies.

“The market determines the price and the department is comfortable with the level of competition, which means that there is no need for a cap in these two sectors.

“As the DoE aims to redress the inequalities of the past and ensure the creation of employment opportunities, bidders will be scored against their contribution towards broad-based black economic empowerment and job creation,” the DoE elaborates.

It is understood that a total of 1 105 MW has been allocated for the fourth bid window, divided between onshore wind (590 MW), solar PV (400 MW), biomass (40 MW), landfill gas (15 MW) and small hydropower (60 MW).

Programme Progress
The department states that it is pleased with the progress made by some projects, adding that projects from the first two rounds are under construction and that some have been connected to the national grid in various provinces.

“Each developer has committed to local economic development, including skills development, local enterprise development and job opportunities during and after construction.

“These commitments are in writing and developers breaching these obligations are liable to have their contracts terminated. However, it is still too early to assess the actual economic impact of the programme, but indications are that some parts of the country are seeing substantial economic activity for the first time under the energy programme,” explains the DoE.

The REIPPPP represents progress toward realising the energy mix outlined in the National Development Plan and the Integrated Resource Plan (IRP) 2010. In terms of the IRP 2010, by 2030 about 42% of the electricity generated in South Africa is required to come from renewable resources.

“South Africa has a high level of renewable- energy potential and the department has a target in place of obtaining 10 000 GWh of renewable energy, of which 3 725 MW will be generated from renewable-energy sources to ensure the continued uninterrupted supply of electricity.

“This REIPPPP has been designed to contribute towards socioeconomic and environmentally sustainable growth, and to start and stimulate the renewable industry in the country,” concludes the DoE.