South Africa's renewable energy programme announces successful bidders for REIPPPP round three
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 âpeakâ 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.
|MW in window 1||MW in window 2||MW in window 3||MW remaining|
|Solar PV||632||417||435||1 041|
|Concentrated Solar Power||150||50||200||200|
|Small Hydro (less than 40MW)||0||14||0||121|
|TOTALS||1 416||1 044||1 456||2 808|
Window Three: Preferred Bidders Summary
|No of Bids||MW by Preferred Bidders||Max MW Allocated for Window 3|
|Concentrated Solar Power||2||200||200|
|Small Hydro (less than 40MW)||0||0||121|
|TOTALS||17||1 456||1 473|
Window Three: Job Creation
|Jobs During Construction||Jobs During Operational Lifespan *|
|Eastern Cape||512||4 908|
|Free State||414||1 443|
|Northern Cape||6 502||8 736|
|Western Cape||223||1 295|
|TOTALS||7 915||18 228|
* One job = 12 person-months
From the Twittersphere
Wind energy prices bid in South Africa's #REIPPP have fallen 42% over 2 years from R1.14/kWh to 89.7c/kWh to 66c/kWh. Cheaper than coal.— Anton Eberhard (@AntonEberhard) November 5, 2013
Wind energy prices continue to fall in South Africa. In 3 #REIPPP bid rounds prices fall from R1.14/kWh to 89c and lowest bid now 66c/kWh— Anton Eberhard (@AntonEberhard) October 29, 2013