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South Africa's renewable energy programme announces successful bidders for REIPPPP round three

By Staff Writer on 14 November 2013

The names of the 17 preferred bidders out of a total of 93 submissions in round three of the Renewable Energy Independent Power Producer Procurement (REIPPP) programme were announced earlier this month. This brings the total number of utility-scale renewable energy projects in progress to 64 with many window one projects in advanced stages of construction and a handful already feeding into the grid.

The total megawatt value of bids submitted in window three amounted to 6 023 MW whilst the available allocation for this window was 1 473 MW. The round also saw aggressive price decreases across all the technologies with an average of 74 c/kWh achieved for wind down from 1.14 R/kWh in window one, 99 c/kWh for solar photovoltaic (PV) down from 2.75 R/kWh in window one and 1.64 R/kWh for concentrated solar power (CSP), down from 2.69 R/kWh in window one.

It is noteworthy that the base price for CSP quoted above is payable for 12 hours every day and that 270% of the base price is payable for 5 “peak” hours every day. This effectively incentivises the storage benefits of CSP technology (heat is stored in the form of molten salt) whereby electricity can be generated at peak hours in the early morning and evenings when it is most needed.

It is believed that the low prices in some instances were achieved by developers being able to finance a larger proportion of their projects out of equity, thus decreasing the cost of debt. Some commentators cautioned that whilst this is desirable in the short term from a pricing point of view, it does not necessarily contribute to a more broadly based emerging renewable energy industry and effectively curtails the ability of emerging developers to compete.

Window three saw the addition of biomass (16 MW) and landfill gas (18 MW) projects to the REIPPP mix with the provinces of kwaZulu-Natal and Gauteng now boasting their entry into the REIPPP programme. Linear Fresnel CSP technology also makes its debut in the South African context.

Window three project developers will now focus on concluding Power Purchase Agreements, Implementation Agreements and Generation Licenses in order to reach financial close.


REIPPP Megawatts to Date

The REIPPP programme first targeted 3 725MW of renewable energy power to be online by 2015. In December 2012, the DoE announced a further allocation of 3 200MW of renewable energy power to be online by 2020.

Source: DoE presentation
 MW in window 1MW in window 2MW in window 3MW remaining
Solar PV 632 417 435  1 041
Wind 634 563 787  1 336
Concentrated Solar Power 150 50 200  200
Small Hydro (less than 40MW) 0 14 0  121
Landfill Gas 0  0  18  7
Biomass 0  0  16  43
Biogas 0  0  0  60
TOTALS 1 416 1 044 1 456 2 808


Window Three: Preferred Bidders Summary


Source: DoE presentation
 No of BidsMW by Preferred BiddersMax MW Allocated for Window 3
Solar PV 6 435 401
Wind 7 787 654
Concentrated Solar Power 2 200 200
Small Hydro (less than 40MW) 0 0 121
Landfill Gas 1  18  25
Biomass 1  16  60
Biogas 0  0  12
TOTALS 17 1 456 1 473


Window Three: Job Creation


Source: DoE presentation
 Jobs During ConstructionJobs During Operational Lifespan *
Eastern Cape 512 4 908
Free State 414 1 443
Gauteng 6 240
kwaZulu-Natal 96 240
Limpopo 160  1 366
Northern Cape 6 502  8 736
Western Cape 223  1 295
TOTALS 7 915 18 228

* One job = 12 person-months


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