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SA's renewables procurement programme to be enlarged by a further 3 200 MW

9th October 2012

By: Terence Creamer

Creamer Media Editor

  

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South Africa will move to procure an additional 3 200 MW of renewable energy capacity by 2020, over and above the 3 725 MW being procured currently under the Renewable Energy Independent Power Producer Programme (REIPPP).

Addressing a South Africa-Spain Business Summit in Johannesburg, Department of Energy (DoE) acting chief director Thabang Audat said the proposal had been sent to the National Energy Regulator of South Africa (Nersa) for its concurrence on the additional allocation.

He was unable to provide details as to how the new allocation would be divided between the various renewables technologies, but said this breakdown would be provided in a Ministerial determination, which would be published in the Government Gazette within seven working days of Nersa's concurrence.

The new renewables allocation meant that there would now be more than 4 360 MW of capacity available for future bidding rounds, with the next round scheduled to close in May, 2013.

Prior to this extension only 1 165.6 MW of capacity remained unallocated under the REIPPP, following two bidding rounds during which a total of 47 projects were named as preferred bidders.

Audat said progress had also been made in clearing the last remaining hurdles to enable the 28 first-round preferred bidders to reach financial closure, which had initially been scheduled for in June.

The delay had arisen owing to an "oversight" relating to the guarantees required by Eskom, the buyer of the renewable electricity from the projects, to safeguard its balance sheet.

These National Treasury guarantees would protect the independent power producers in the instance of any Eskom default, and outlined the process of recovering the costs to the State should such a default occur.

The National Treasury had approved and signed off on those guarantees on October 5 and would likely deliver formal communication of that decision to the DoE and Eskom within days, or weeks.

Therefore, Audat anticipated that developers should receive formal correspondence regarding the signing of the first-round power purchase and implementation agreements in late October, or early November.

Edited by Creamer Media Reporter

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