SA signs agreements with bidders in REIPPP

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09-5-2013

Pretoria - South Africa on Thursday signed agreements with preferred bidders in Window 2 of the Renewable Energy Independent Power Producers Programme (REIPPP) that will contribute to the country’s energy mix and job creation.

Speaking at the signing ceremony of the 19 IPPs that had been named as the preferred bidders for Window 2 in May 2012, Department of Energy (DoE) Minister Dipuo Peters said the programme was an indication by government that it wants to create space for IPPs to also generate electricity in the country.

“Today is an important day because it is another opportunity that presents itself to our successful bidders and Eskom to enter into the requisite agreements that will see the continuation of the programme. This is also an opportune time for us to reflect on the significant strides in our programme. The path we have traversed was characterised by criticism and scepticism with seeds of doubt planted about the ability of South Africa being able to pull this off,” said Peters.

The sceptics had been proven wrong, she said.

The department signed the implementation agreements and the Direct Agreements with each bidder, while power parastatal Eskom signed Power Purchase Agreements with the bidders.

Of the 19 selected bidders, nine were selected for the solar photovoltaic technology taking up 417.1 MW,7 for wind, two for small hydro and one for concentrated solar thermal (CSP). For Solar photovoltaic 417 MW has been taken up by bidders with the maximum MW allocated for round 2 at 450; for wind 562.5 MW has been taken up with the maximum allocation at 650 MW. For small hydro 13.3 MW has been taken up from a maximum allocated for round 2 at 75 MW while for CSP the allocated maximum 50MW has been taken up. In the second window a total 1043.9 MW has been taken up by bidders. The preferred bidders in this window are located in Eastern Cape, Free State, the Northern Cape and the Western Cape.

The Integrated Resource Plan (IRP2010) places specific emphasis on broadening electricity supply technologies to include gas, imports, nuclear, biomass, renewables (wind, solar and hydro), in response to both the country's future electricity needs as well as reduce its CO2 emissions.

South Africa wants to procure 3 725 MW of renewable energy through this process.

According to the IRP2010 - which is a 20-year projection on electricity supply and demand - about 42% of electricity generated in South Africa is required to come from renewable resources.

Peters added that the creation of job opportunities, local content and community development remain the essential ingredients of the programme. 

The minister added that localisation needs constant emphasis as REIPPP in its design and implementation is biased toward the economic development of the country with bidders being subjected to local content assessment.

The second window of the programme follows on Window 1 which is seeing the construction of 28 projects that were announced in 2011. Progress in Window 1 is been made with most of the projects still being in the construction phase, said Ompie Aphane, Deputy Director General for Electricity, Nuclear and Clean Energy at the department. “Everything is on track,” he said, adding that bidders in Window 1 were required to submit monthly progress reports.

“The total financial injection in all these projects amounts to R28 billion for a net generation capacity of 1043MW. It is a welcome and much needed investment that should bolster our quest to grow the economy simultaneously as creating jobs,” said Peters, adding that the department will continue to provide technical and administrative support to all bidders.

Lessons learnt from Window 1 and 2, said Peters, would be factored in going forward. “Remember the IRP speaks to 17800 MW. The first three determinations speak to determination of 2755 mw and we believe that because of the size of renewable energy there will still be other windows not necessarily related to this determination but there will be more windows. It’s important to realise that this first determination for 2725 we are going to close it off at Window 3 and we will reopen other windows.”

Early this month, a request for proposals (RFP) for the third bid window of the programme was issued by the department.  

Director General at the department Nelly Magubane said the improvements to the RFP for Window 3 have been made with details for Window 3 now being available on the IPP website for downloading (www.ipprenewables.co.za). The third bid submission date is 19 August 2013.

In improving the bidding programme the department has established a unit dealing with the monitoring the commitments made through the bid submissions. “The unit will ensure that you keep to your commitments particularly those of socio economic development,” she said.

The department said Magubane had noted that bidders attempted to make substantial changes to their submissions at the bid submission phase. “Such behaviour is unacceptable; it puts stress on the department.”

The first megawatt in respect of Window 1 “we can report on 15 November, of 7 megawatt PV,” said Aphane.

Mongezi Ntsokolo Transmission Director at Eskom said the demand for electricity was growing  with South Africa having relied on fossil fuels for many decades, a low carbon future was important. “The signing ceremony marks a transition to a new era. The ceremony brings to life government’s commitment to change the energy landscape and to grow the economy,” said Ntsokolo, while also thanking the department for its “visionary leadership.”

Eskom as the buyer of renewable power is committed to the diversification of the country’s energy mix. “We look forward to welcome new players,” said Ntsokolo, who also encouraged consumers to use electricity wisely over the winter months seeing that the power parastatal is also conducting maintenance work on some plants in the course of winter.

The REIPPP has won the Green Infrastructure Project of the year award at the 6th Global Infrastructure Leadership Forum held in New York. - SAnews.gov.za

 

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