A new Ministerial determination is required to allow for additional solar PV to be procured
Photo by: Creamer Media
Government has confirmed that the procurement allocation for Bid Window Six (BW 6) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has been scaled back to 4 200 MW from the 5 200 MW announced by President Cyril Ramaphosa on July 25.
The National Energy Crisis Committee announced on Sunday that the decision to proceed with a 4 200 MW request for proposals (RFP) had been decided so as to ensure that the procurement process was not delayed, given that the National Energy Regulator of South Africa (Nersa) still needed to concur with a Ministerial determination opening the way for the procurement of more solar photovoltaic (PV) capacity.
Engineering News reported previously that Nersa had invited public comment on it providing concurrence with the new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity catered for under the 2019 edition of the Integrated Resource Plan (IRP 2019).
The regulator initially set a deadline of September 23 for such comment, which would have been a day after the BW6 bid submission deadline of September 22, which had itself been shifted from August 11 following the announced enlargement of the round.
Nersa later confirmed an earlier September 16 deadline.
The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office had indicated to Engineering News that the size of BW 6 might have to be reduced to 4 200 MW.
Initially, 2 600 MW was due to be procured through BW 6, but Ramaphosa announced in July that the round would be doubled as part of a series of interventions announced as part of a so-called Energy Action Plan to tackle intensifying load-shedding.
Mineral Resources and Energy Minister Gwede Mantashe subsequently delivered three proposed determinations to Nersa in line with Section 34 of the Electricity Regulation Act, covering the following capacities included in Table 5 of the IRP 2019:
- 14 791 MW of ‘Storage’, ‘PV’ and ‘Wind’, for the years 2024 to 2030;
- 3 000 MW in accordance with the heading labelled ‘Gas/Diesel’, for the years 2024 to 2027; and
- 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill’, for the years 2023 and 2024.
However, in a statement the National Energy Crisis Committee said the RFP would be limited to 4 200 MW so as to avoid delaying the bidding process.
“To clarify the procurement process currently under way, due to the urgency required to resolve the electricity supply crisis, the government decided to proceed with increasing the wind allocation from 2 600 MW to 3 200 MW at this stage, in line with the Second Determination of 2020.
“Rather than delay this RFP for all requests to be approved, government opted to issue the current RFP for 4 200 MW as opposed to delaying the entire Bid Window.
“A further announcement regarding the remaining 1 000 MW of solar PV will be made following the conclusion of the Nersa process regarding the concurrence of the new determination.
“At the end of this process, we aim to be adding a total of 5 200 MW under BW 6 to the grid,” the statement reads.
It adds that the decision to proceed follows the conclusion of all required governance approvals, including Eskom’s approval, which is necessary as the State-owned utility remains the single buyer of all electricity procured by government under the REIPPPP.
Meanwhile, none of the 25 preferred projects selected under REIPPPP BW 5 have reached financial close, despite the deadline having been shifted twice to accommodate the projects.
The BW 5 projects, which were initially meant to close at the end of April, have been hampered by the slow issuance of grid connection Budget Quotes by Eskom’s Grid Access Unit, as well as major cost changes precipitated by supply-chain disruptions and the rise in the cost of components since Russia’s invasion of Ukraine.
The IPP Office told Engineering News recently that three projects have progressed to a point where financial close could be said to be imminent.