The Department of Energy on 4 November 2013, said it has signed agreements with 17 new preferred bidders in Window 3 of its Renewable Energy Independent Power Producers Procurement Programme (REIPPP), which is set to boost South Africa’s power supply.
Making the announcement in Pretoria, Energy Minister Ben Martins said this was in line with government’s plan to accelerate the rollout of economic infrastructure central to economic growth and development.
In Window 3, a total of 93 bids (for solar photovoltaic, wind, concentrating solar power (CSP) and landfill gas) amounting to 6 023 MW had been received by the department in August. No bids were received for biogas, even though the department had a 12 MW maximum allocation for this bid window.
“The bids amount to 6 023 MW, whilst the available megawatts for allocation is only 1 473 MW. The department is obviously pleased to note the competitive pricing offered by the bids received thus far,” said Martins.
REIPPP is aimed at bringing additional megawatts into the country’s electricity system through private sector investment in wind, biomass and small hydro, among others.
It has seen the department enter into 28 agreements in the programme’s first window, followed by 19 agreements in Window 2. Under the first two windows, 47 projects are due to contribute about 2 400MW of power.
“Window 3 will contribute approximately R4.4 billion to socio economic development, aggregating to a cumulative investment of R9 billion,” said Martins.
The energy sector, he added, was expected to play a crucial role in creating green jobs, developing skills and transferring technology into the economy.
Electricity parastatal Eskom will buy power from the IPPs when plants are up and running.
“Most of the projects under Windows 1 and 2 are presently under construction. It is anticipated that by December 2013, some of these projects will commence delivering energy,” said Martins.
The renewable energy programme constitutes one of the energy mixes, as outlined in the National Development Plan (NDP) and the Integrated Resource Plan (IRP2010), which is a 20-year projection on electricity supply and demand. These renewable energy technologies form part of a broader energy mix that includes coal and nuclear.
Success of the programme
South Africa is presently rated as the 12th most attractive investment destination for renewable energy. To date, the programme has attracted over R150 billion in foreign direct investment (FDI).
“This bodes very well for South Africa, as the programme has achieved international acclaim for fairness, transparency and certainty of programme. The progressive increase in local content and job creation numbers has also been witnessed,” said the minister.
He said that interest in investing helped to decentralise funds to reach remote provinces in the country.
The department’s Director-General, Nelly Magubane, said that some bidders had exceeded the local content requirement of no less than 40%.
“In terms of local content that preferred bidders have committed themselves, they exceeded expectation. We expected no less than 40% local content. Some of them indicated local content as high as 56.5% in the Northern Cape,” she said.