The Independent Power Producer (IPP) Office has, at the request of prospective bidders, again deferred the first bid submission date for the Coal Baseload IPP Programme. The new submission date has been set as November 2, having initially been shifted to August 28, from June 8.

Preferred bidders would be announced in January 2016 and the IPP Office expected projects to reach financial close six months thereafter.

A leading energy lawyer said the delay did not represent a lack of appetite from IPPs for the programme and should be seen rather as part of the learning processes associated with a novel procurement programme.

In fact, in its note to prospective bidders, the IPP Office stressed that the decision to move the deadline had been made after receiving several requests for an extension.

Macfarlanes partner Scott Brodsky told Engineering News Online that, while the programme had been modelled on the successful Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the coal-fired projects were far larger and more complex.

The coal projects, he said, also had the added dimension of having to secure sufficient primary energy, including coal and water, to supply the power station for the duration of its 25-year operating life. In addition, water-use and environmental authorisations were required.

Brodsky also noted that there had been similar delays at the start of the REIPPPP, which had subsequently had four successful bid windows, with an expedited bidding round for a further 1 800 MW due to close on October 1.

A total of 92 projects, with a combined capacity of nearly 6 300 MW and an investment value of R192-billion, had been contracted. The Department of Energy told the Portfolio Committee on Energy this week that 37 renewables projects had been connected to the grid as of June 2015.

Through the Coal Baseload programme, the IPP Office was seeking to procure 1 000 MW of domestic capacity and 600 MW of cross border capacity during the first bid window.

However it had clarified that, should competitive bids be received, it could contract up to the 2 500 MW catered for under a 2012 Ministerial determination.  It had also indicated that it would not contract the 600 MW in cross-border capacity during the first round, owing to the added complexity associated with such projects.

The IPP Office was looking for projects of 600 MW or smaller, which could also be introduced into South Africa’s supply-stressed grid by 2021 or earlier.

The request for proposals also set a price cap of 82c/kWh for the first bid window and stipulated that South Africans own 51% of the project company set up to develop the power stations, including 30% black economic–empowerment participation.