Independent Power Producers in South Africa Submit 60,300 Megawatts of Projects

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--After being held in suspense for a long time by the South African government, independent power producers (IPP) are now receiving a specific program of targets in the development of the Energy Ministry's Integrated Resource Plan (IRP), which would enable the construction of an additional 6,250 megawatts (MW) of coal-fired generation between 2014 and 2030. IPPs also could build 2,370 MW of gas-fired capacity and 3,910 MW of peaking capacity between 2019 and 2030. This total of 12,530 MW of IPP-produced power would be in addition to projects due for commissioning in the period by Eskom, the state-owned power utility.

Energy Minister Dipuo Peters, speaking at a renewable energy IPP program (REIPPP) bidders' conference in Johannesburg, said that the current renewable target of 3,725 MW scheduled for delivery by 2016 could be extended beyond that date, with ongoing renewables additions targeted at 1,000 MW a year. The REIPPP is to be converted into a rolling program, allowing additional renewable capacity to be added.

A request for information from the power sector produced a strong response and included an emphasis on increasing the level of gas in the overall energy mix. Developers submitted projects with a potential combined capacity of 60,300 MW, which they claimed could be introduced before March 2019.

The Department of Energy is expected to conclude financial closure agreements on the first 28 wind and solar projects by the end of this month, which would lead to a capacity of 1,415 MW being added with a combined project investment of $5.75 billion. A further 19 bidders would raise capacity allocated to 2,460 MW.

The minister said that there was nothing to stop the renewable energy industry establishing manufacturing facilities in South Africa, and measures were in hand to give the private sector comfort to invest in manufacturing plants.

For related information, see June 11, 2012, article - South Africa's 3,725 Megawatt Renewables Roll-Out Could Bring More than $12 Billion in Investments.

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