Grid access emerges as major hurdle to wind projects in South Africa
The South African Wind Energy Association (SAWEA) has expressed dismay that none of the 23 wind-project bids submitted as part of government’s latest and expanded renewables procurement round were selected as preferred bidders and expressed concern about the current system for allocating grid access.
Mineral Resources and Energy Minister Gwede Mantashe announced on December 8 that only six solar projects, with a combined capacity of 1 000 MW, had been appointed as preferred bidders following the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Progamme.
This despite the round having been expanded from 2 600 MW to 4 200 MW as part of a series of initiatives, announced by President Cyril Ramaphosa in July, to tackle intensifying loadshedding, which was being implemented at Stage 6 at the time of the announcement.
A total of 56 wind and solar bids were received by the bid submission deadline and IPP Office head Bernard Magoro attributed the low conversion rate to the fact that Eskom no longer had grid capacity available, mostly in the Cape provinces, to absorb the generators bid under BW6.
Eskom transmission MD Segomoco Scheepers said the non-discriminatory access rules of the Grid Code meant that Eskom could not reserve grid access for BW6 projects where other IPPs had made financial commitments to gain access to the capacity.
However, SAWEA argued that Eskom needed to be more responsible in managing grid access with a balanced view between publicly and privately procured electricity.
“A clearly defined queueing system needs to be urgently implemented,” CEO Niveshen Govender said in a statement.
Under BW6, bidders were required to secure cost estimate letters from Eskom for grid access but were unable to pay for Budget Quotes until they were named as preferred bidders. In the interim, developers of projects with private offtakers secured Budget Quotes for the very same grid access on which the BW6 bids were reliant.
SAWEA noted that wind developers had been guided by Eskom’s recently published Generation Connection Capacity Assessment, which indicated that there was grid availability for public procurement.
“We agree with Minister Mantashe that investment into the grid infrastructure must be prioritised and accelerated to allow for more new generation capacity, however, grid-access processes are providing little confidence in articulating how grid capacity is being allocated and we view the announcement today as a missed opportunity given our dire need for electricity in South Africa,” Govender said, while calling for a balanced view between publicly and privately procured electricity.
“We strongly urge immediate intervention by key role-players to unpack the challenges with the wind sector and find viable solutions to unlock the hurdles facing the progression toward a secure energy system,” he added.
Had all 23 wind projects been built, they would have contributed 10 TWh yearly, and could have contributed significantly to combating loadshedding, which was being implemented at Stage 6 when the decision to exclude the projects was announced.