Preferred Bidders for Renewable Energy Programme Announced

Energy Minister Tina Joemat-Pettersson has announced the preferred bidders for phase four of the Independent Power Producer (IPP) procurement programme, who are expected to feed an additional 1 121 Megawatts to the grid.

The Minister’s announcement comes as government continues to pull all the stops to accelerate the finalisation of purchase processes for renewable energy that forms part of government’s plan to resolve the country’s energy challenges.

Addressing a breakfast briefing at the Pepper Club Hotel on Thursday, the Minister said she expects the financial close for the bid window for this phase in the fourth quarter of this year, and for the projects to be commissioned from November 2016.

“In view of the current electricity supply challenges experienced in our country, and in the context of broader coordination efforts of government, the department has been structuring a comprehensive response with regard to the IPP programme,” she said.

In responding to the current energy challenges, Cabinet established a war room on energy in December to come up with short, medium to long term solutions that needed to be explored.

The war room devised a five-point plan to tackle the challenges that would help government to resolve the challenges.

As part of the five-point plan, the war room was tasked with looking at co-generation capacity and ensuring that existing Power Purchase Agreements (PPAs) are renewed to restore some 1 390 Megawatts power that is being supplied to the grid.

The war room also needed to work with the Department of Energy to go into the market and procure additional capacity on to the grid.

The Minister said the renewable energy IPP programme has been a flagship programme of the department.

A total of 4 322 Megawatts have been procured in less than four years, she said.

“Resolving the energy challenge remains a critical element of the South African Cabinet’s list of nine strategic priorities to be pursued in partnership with the private sector and all stakeholders.

“The South Africa government is following a coordinated approach to the energy crisis, while ensuring that energy developments are maximising socio-economic development objectives, in addition to economic growth,” the Minister said.

The Minister said the issuing of confirmation letters to 13 preferred bidders brings the total number of projects that the department has approved to 79 with a capacity of 5 243 Megawatts across all renewable energy windows.

This, she said, represents a massive investment of R168 billion in economic infrastructure in South Africa, which will contribute to economic growth and job creation.

The investment would also contribute to the electricity supply security.

The 13 preferred bidders for the fourth window include Ngodwana Energy Project, which derives energy from biomass to contribute 25 Megawatts.

The preferred bidders under on-shore wind include:

– Roggeveld Wind Farm (140 Megawatts)

– The Karusa Wind Farm (140 Megawatts)

– The Nxuba Wind Farm (139 Megawatts)

– Golden Valley Wind Farm (117 Megawatts)

– Oyster Bay Wind Farm (140 Megawatts)

Those that are under solar power include:

– Sirius Solar PV Project One (75 Megawatts)

– Droogfontein 2 Solar (75 Megawatts)

– Dyason’s Klip 1 (75 Megawatts)

– Dyason’s Klip 2 (75 Megawatts)

– Konkoonsies II Solar Facility (75 Megawatts)

– Aggeneys Solar Project (40 Megawatts)

In the hydro power category, Kruisvallei Hydro will supply 5 Megawatts to the grid.

The Minister said, meanwhile, that she has instructed her department and the IPP office to accelerate and expand the renewable energy IPP procurement programme through firstly utilising the enabling provisions in the current request for proposals (RFP) form to allocate additional megawatts from the bid window four procurement process.

She said she expects to receive a comprehensive report on her instruction by the end of April and that she would make an announcement thereafter.

“Secondly, we will be issuing a request for further proposals for an expedited procurement process of 180 Megawatts from all technologies.

“I have directed the IPP office to follow a diligent, but shortened and simplified, competitive procurement process.

“This bidding process would be open to inter alia unsuccessful bidders from all previous bid windows (one to four) which are ready for a re-submission,” she said.

The Minister said, meanwhile, that she has asked the IPP team to redesign the current RFP for the fifth bid submission phase to be ready for release in the second quarter of 2016.

She said the redesigned RFP would include, amongst others, a definition of the local community, the mechanisms to ensure early, efficient and equitable benefits to the communities and the local content or industrialisation regime, as well as to take into account the constrained distribution and industrialisation regime. –

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