Bidders of second window of IPPs to be announced next week

Friday, May 18, 2012

Pretoria - The preferred bidders for the second window of the Independent Power Producers (IPPs) will be announced next week, says Energy Minister Dipuo Peters.

"We are now set to initiate a fresh bidding round for the other technologies such as cogeneration from biomass, including sugar and paper, biogas, landfill gas, and small hydro. The selected preferred bidders for the REIPP [Renewable Energy Independent Power Producers] under window two will be announced on Monday," she said on Thursday, delivering the department's Budget Vote.

The programme involves a bidding process where it looks for proposals on new generation capacity.

South Africa wants to procure 3 625 MW of renewable energy through this process. According to the Integrated Resource Plan (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.

Last year, the Department of Energy announced 28 preferred bidders, out of a total of 53 applications for the Renewable Energy Independent Power Producers bid process first window.

"Through this process we have so far secured commitment for the provision of 1 416 megawatts of renewable energy out of the 3 625 total required, surpassing our commitment to achieve at least 1 000 MW by the end of the year," said Peters.

The IPP process has attracted foreign direct investment into South Africa worth about R100 billion over a period of 12 months.

According to the department, successful bidders are expected to enter into a contractual agreement which is referred to as the Implementation Agreement.

"The agreement is designed to govern the commitments made by bidders in relation to the minimum number of jobs that they will create during the construction period, the local content procurement of some power plant's components and the change in control and BEE equity. The procurement process is designed such that the bidders will not be able to finalize their deals without signing this critical component of the project agreements.

"We are confident that this will boost the energy sector employment growth potential," said the minister.

Ahead of the Budget Vote, Peters said she was confident that South Africa would be able to keep the lights on in the winter period. She called on the public and business to conserve power so as to ensure that the lights are kept on.