South Africa Launches Bidding for 3,725 Megawatts of Renewables Projects

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--With the launch of the South African government's tender procedure for independent power producers (IPP) of renewable energy, the 1,025 megawatts (MW) originally offered for government procurement in the integrated resource plan (IRP) was upped to 3,725 MW by the Department of Energy.

Renewable project developers are invited to submit proposals for the financing, construction, operation and maintenance of a range of technologies. Allocations of capacity have been made for the technologies: 1,850 MW for onshore wind energy; 200 MW for concentrated solar thermal power; 1,450 MW for solar photovoltaic; 12.5 MW for biomass; 12.5 MW for biogas, 25 MW for landfill gas; 75 MW for small hydro technologies; and 100 MW for small scale IPP projects of less than 5 MW.

The Department of Energy was reported as saying that the increase of capacity to 3,725 MW was broadly in accordance with the capacity allocated to renewable energy generation in the previously published IRP 2010-2030. The IRP stated that 17,800 MW of renewable capacity would be deployed between 2010 and 2030. Wind and solar photovoltaic were both scheduled for 8,400 MW, and concentrated solar thermal for 1,000 MW.

Dr. Rob Davies, the Trade and Industry Minister, has said that the government is engaging with a range of international funding sources to partner with South Africa in implementing large-scale renewables programs. This funding would be used to offset any possible spike in the electricity price that could otherwise arise from the large-scale adoption of renewables. Davies added that it also would safeguard investments at the scale required to attract manufacturers of renewable technologies and components.

The previously published renewable energy feed-in tariff has been dropped and replaced by a two-phase project selection process covering price and other criteria. A special dispensation is being sought to by-pass the government's preferential procurement rules, which give a 90% weight to price and the 10% balance to other selection criteria.

Bidders must bid a tariff and meet identified socio-economic development objectives. The tariff will be payable by the buyer, which in all probability will be the state-owned power utility Eskom (Johannesburg).

All bids must be submitted with a guarantee of SAR 100,000 (about $15,000) for every megawatt of installed capacity proposed for the project. Before engaging with the request for proposals, a non-refundable payment of SAR 15,000 ($2,250) must be made and a registration form completed.

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