First Project Bidding Round for South African Renewables Culls 1,415 Megawatts

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The determination with which South Africa's Department of Energy is implementing its renewable energy targets and project plans, particularly in the Integrated Resource Plan adopted in 2010, could see it surpass milestones set for the next 20 years. These include 8,400 megawatts (MW) of wind power.

Energy Minister Dipuo Peters has announced the winning bids for the first round of tenders for renewable energy projects. She made the announcement at the COP-17 United Nations climate change conference in Durban, South Africa.

The combined capacity of the winning solar photovoltaic (PV) projects is 631.53 MW. Two concentrating solar thermal power projects totaled 150 MW. The eight onshore windfarm projects came in at 633.9 MW. The 28 preferred independent power producers (IPP) must now take the 1,415.53 MW of projects to financial closure by June 2012. The 28 winning bids were selected from a total of 53 submitted for the November 4, 2011, bid window.

Two more windows are planned for 2012 and another two for 2013. The department plans to procure 3,725 MW of renewables capacity from IPPs before 2016. The next bid window will close in the first quarter of 2012 and will cover more than 2,309 MW, which represents more than 60% of the capacity yet to be allocated. In total, the department is aiming to procure 1,850 MW of onshore wind, 1,450 of solar PV, 200 MW of concentrating solar power, 75 MW of small hydro, 25 MW of landfill gas, and 12.5MWh of biomass and biogas energy capacity.

The government is working on the architecture for funding options to help provide a cost cushion to the economy during the transition from the current coal-based system to an energy mix that will contain 17,800 MW of renewable energy by 2030.

A simplified bid document and a sheet of terms will be released for small-scale renewable projects of between 1 MW and 5 MW during the first quarter of 2012. This was due to be released during COP-17, but some challenges have been met in scaling back and simplifying the tender. Efforts will be made to align the small projects program with the Development Bank of Southern Africa's (DBSA) funding facility for smaller projects.

For related information, see November 22, 2011, article - Response to South Africa's Renewables Scheme Yields 53 Bids Worth 2,100 Megawatts.

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