Kgosientsho Ramokgopa
Electricity Minister Dr Kgosientsho Ramokgopa says he “laments” the time it takes for government to go from issuing requests for proposals (RFPs) to announcing preferred bidder status and reaching financial close when it comes to renewable energy power projects.
“Our going out for RFPs and preferred bidder status is really the domain of the State, and the State takes an inordinate amount of time.”
Speaking at Windaba 2023 in Cape Town, Ramokgopa said a study indicated that it took on average around 18 months for this process to be concluded.
“That is unacceptable by any measure. It is going to disincentivise the private sector from coming to this space.”
Ramokgopa added that rolling out renewable power projects was also about “the frequency with which you go out to the market”.
“If that frequency is erratic, if the periods are too far from each other, then you lose market appetite.
“That is why it is important you resolve…the frequency in which you go out to the market, and then also truncate the process of when you go out and get to preferred bidder status.
“Once the market has that confidence, and then you will have a thriving [renewable energy] sector.”
Ramokgopa’s comments come as the seventh round (bid window 7) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) remains in limbo, having been delayed since early last year.
Grid Capacity
The previous bid window, REIPPP bid window 6, illustrated that there had to be symmetry in the geographic location of renewable energy projects and the grid capacity available, noted Ramokgopa.
“The State must be deliberate in redirecting interest to where these opportunities are.
“Of course, the market will make its calculations and decide if it wants to go to these spaces or not, but the State must guarantee grid capacity. The State cannot be an impediment.”
Ramokgopa said a survey of renewable energy projects developed by the South African Wind Energy Association and the South African Photovoltaic Industry Association showed that 66 GW of wind and solar projects were in development across the country.
He said strengthening the transmission network would be key to enabling this investment.
The Western and Northern Cape have zero grid capacity remaining following a spate of wind and solar projects in recent years, while the Eastern Cape is close to maxed out.
KwaZulu-Natal has the biggest grid capacity available, but the least interest from power producers, as recorded at July this year.