The success of the South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is leading to investors showing increasing interest in bidding for future rounds, says Italy-based company Enel Green Power, the Enel Group renewable specialist.

The REIPPPP was launched by government in August 2011 and several bidding rounds were planned and have been completed, with specific volumes of bidders for each technology.

Enel Green Power head of business development Antonio Cammisecra tells Engineering News that the company is considering participating in the next bidding rounds of the REIPPPP.

Enel Green Power has received preferred bidder status for six projects in round three of the REIPPPP bidding process.

“Besides the four solar photovoltaic (PV) and two wind projects recently awarded to Enel Green Power in round three of the REIPPPP, the company is also building a 10 MW solar PV project in Upington, in the Northern Cape.  This is as a result of successful bidder status being awarded in round two of the REIPPPP to its subsidiary ESSE, a 50:50 joint venture between Enel Green Power and Japanese multinational corporation Sharp,” says Cammisecra.

Enel Green Power is also considering participating in the next bidding phase, with its wind and solar projects. “As far as the rest of the continent is concerned, we believe it will make sense to follow the development in other African countries and continue to scout for further opportunities,” he says. 

Africa is endowed with large diversity of renewable-energy resources, including solar, wind, hydro, geothermal and biomass technologies.

Given the ample availability of renewable-energy resources in Africa and its growing economies, booming electricity demand and low rural-area electrification rate, there is large untapped potential for renewable-energy generation.

Renewable Energy in South Africa

“South Africa, in particular, has a population of 50-million and represents about 20% of Africa’s gross domestic profit.  In 2012, power demand in South Africa reached 230 TWh,” says Cammisecra.

He adds that the renewable-energy market in South Africa is characterised by a stable regulatory framework and significant economic growth. “Given the strong growth in electricity demand and the ageing coal generation base, there is strong political and an economic willingness to diversify the country’s energy mix, with particular focus on renewable sources.”

The South African government is aiming to significantly increase production from renewable-energy sources by adding about 8 GW of new capacity by 2020.

Growth Potential

Cammisecra says the biggest potential for growth in the renewable-energy industry lies in technological innovation that may further reduce costs, which has been the case in the past, particularly in the solar PV industry.

“This, together with the abundance of renewable-energy resources in particular areas, will boost renewable-energy development, based increasingly on grid-parity conditions and less on incentives,” he says.

Cammisecra notes that, consequently, the renewable-energy industry is facing a sensitive transition period, from a subsidised industry to a fully unsubsidised and competitive market, in which consolidation can be expected, with the best industrial performers taking leadership positions.

Trends and Technology

Given the limited predictability of most renewable resources, storage technologies play a substantial role in the renewable-energy industry of the future.

“Economies of scale in the automotive industry resulting from the increasing use of batteries for electric vehicles may help reduce storage costs significantly and allow for widespread applications,” says Cammisecra.

Additionally, the continuous improvement of solar PV and new, potentially ground-breaking solar PV technologies that may be launched in the future, will help reduce costs significantly.