New Ministerial determinations creating the framework for the procurement of additional renewable-energy, gas and cogeneration capacity from independent power producers (IPPs) have been published in the Government Gazette.

The determinations are in line with announcements made by Energy Minister Tina Joemat-Pettersson in April and have been published following consultations with the National Energy Regulator of South Africa (Nersa), with the signature of Nersa chairperson Jacob Modise also appearing at the foot of the notices.

The renewable-energy determination provides for an additional allocation of 6 300 MW for future bid windows under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The new allocation, published on August 18, effectively doubles the previous allocation for renewables, which stood at 6 725 MW.

Following four REIPPPP bid windows, 92 renewables projects, with a nominal capacity of 6 243 MW, have been procured and the IPP Office, which oversees procurement on behalf of the Department of Energy, is currently finalising a so-called “expedited” round to procure a further 1 800 MW before the introduction of a new tender framework from bid window five onwards.

The bid submission date for the expedited round, which will primarily seek to mop up those competitive projects that slimly failed to progress to the preferred-bidder stage during the previous bid windows, has been set for October 1.

In a note to clients, Macfarlanes partner Scott Brodsky said the renewable-energy determination would be welcomed by prospective bidders and investors as it provided the “desired certainty that there will be a pipeline of renewable-energy projects”.

The renewables determination has been allocated across seven categories and sets aside 3 040 MW for onshore wind, 2 200 MW for solar photovoltaic projects, 600 MW for concentrated solar power, 150 MW for biomass, 60 MW for small hydro, 50 MW for biogas and 200 MW for small-scale renewables projects of less than 5 MW in size.

The electricity produced by the IPPs is currently bought by Eskom, which has been designated as the buyer, or offtaker.

Gas & Cogen

Meanwhile, the 2012 determinations relating to gas and cogeneration have been amended, with the gas determination opening the way for any gas type or source to be used for the procurement of 3 126 MW of gas-to-power capacity.

This includes gas derived from a natural gasfield, liquefied natural gas, coal-bed methane, synthesis gas, above or underground coal gasification, shale gas and any other gas type considered appropriate by the procurer.

The IPP Office is currently considering over 200 responses to a gas-to-power request for information, which closed on July 20. The responses will be used to formulate a future procurement programme.

Amendments have also been made to the cogeneration IPP procurement framework, with the Minister including an additional capacity allocation for new generation capacity for the procurement of 1 800 MW.

The determination has been increased from 800 MW previously, owing to delays to Eskom’s new build programme, a deterioration in the energy availability factor associated with Eskom’s coal-fired fleet to below 85% and the fact that demand-side management programmes envisaged under the Medium-Term Risk Mitigation Project have not been achieved.

The capacity can be generated from waste heat or furnace offgas, cogeneration and/or an energy source that is a coproduct, by-product, waste product or residual product of an industrial process or an agricultural or forestry activity.

A phased cogeneration procurement programme is also being run by the IPP Office, with the first bid window having been divided into four parts, with submission dates set for between August and November this year.

The first bid window is targeting existing generation, whereby electrical surplus energy can be bought in terms of a power purchase agreement.