Renewable energy projects to pump R50bn into SA economy
Mineral resources and energy minister Gwede Mantashe yesterday announced 25 preferred bidders selected in the fifth round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
The announcement comes as Eskom is struggling to keep the lights on in SA, resorting to crippling bouts of load-shedding.
The opening of REIPPPP Bid Window 5 will allow 2 600MW of wind and solar to be procured and, together with subsequent bid windows, will not only allow for increased energy security but will be a critical step in SA’s energy transition towards a greener energy future.
This week, the embattled power utility said it is planning to bring more renewable energy on to the national grid.
The Bid Window 5 was released to market in April and is the first bidding round to be launched under the Second Section 34 Determination.
It aimed to procure a total of 2 600MW, which includes 1 600MW from onshore wind and 1 000MW from solar PV plants.
According to Mantashe, the programme attracted a total of 102 bids, with capacity totalling 9 644MW.
He pointed out that the 25 preferred bidder projects will inject a total private sector investment amount of about R50 billion into the South African economy.
They will further create a total of 13 900 job opportunities, he added.
“In an effort to re-stimulate local manufacturing and production in the renewable energy value chain, the RFP [request for proposal] required projects to commit at least 40% local content during construction,” said the minister.
“The preferred bidders committed to about 44% local spend during construction. This is in addition to the use of designated components as determined by the Department of Trade, Industry and Competition.”
For the first time, he noted, the RFP also required bidders to commit to local content during operation.
“In this regard, the preferred bidders undertook to spend about 41% of their committed budget during operations towards the purchasing of products that are locally produced and meet the requirements for local content.
“These projects will continue to make a difference in the lives of not only those communities in the vicinity of the proposed power plants who will own 2.5% of the preferred bidder projects. The preferred bidders have also committed a total of R2.7 billion towards socio-economic development and enterprise and skills development initiatives over the 20-year lifetime of the projects.
“We look forward to more competition and reduced price when we issue Bid Window 6. We are aiming to release Bid Window 6 by not later than end of January 2022.”
According to Mantashe, Bid Window 6 will also include 1 600MW of onshore wind and 1 000MW of solar PV, in accordance with the Integrated Resource Plan 2019.
Eve of COP26
Responding to the announcement, environmental activist group Greenpeace Africa says it is relieved the 25 preferred bidders for Bid Window 5 were comprised of off-shore wind and solar PV projects, to aid in the diversification of SA’s “coal-addicted” energy mix.
These bidders will create a total of 13 000 job opportunities and set South Africa on course to its climate commitments in line with the Paris Agreement, says the group.
Says Greenpeace Africa climate and energy campaigner Thandile Chinyavanhu: “The announcement comes on the eve of the COP26 meeting, where nations are racing to share positive advancements on the climate action front.
“It is worth noting that South Africa has not even begun to tap into its renewable energy potential. The renewable energy components of the Integrated Resource Plan alone will contribute a reduction in emission of 84Mt CO2 equivalent per annum.”
Chinyavanhu says Greenpeace Africa calls on Mantashe to revisit the IRP to further exploit its renewable energy potential and move up the timeline for the decommissioning of coal-fired power stations.
“This is an opportunity for South Africa to play its role in averting the current climate crisis,” Chinyavanhu says.
Norway-based Scatec, one of the preferred bidders, says in a statement that it was awarded three solar projects totalling 273MW.
“This is another great milestone for Scatec in South Africa and for renewable energy in the country. We are pleased with the South African government’s commitment to the REIPPP programme and their announcement within the set timeframe. The award is a manifestation of our position in South Africa as the leading solar IPP,” says CEO Raymond Carlsen.
Under the programme, Scatec will sell power from the solar plants under a 20-year power purchase agreement. Scatec will own 51% of the equity in the projects with H1 Holdings, its local black economic empowerment partner, owning 46.5% and a community trust holding 2.5%.
List of the 25 preferred bidders:
• Coleskop Wind Energy Facility
• San Kraal Wind Energy Facility
• Phezukomoya Wind Energy Facility
• Brandvalley Wind Farm
• Rietkloof Wind Farm
• Wolf Wind Farm
• Beaufort West Wind Facility
• Trakas Wind Facility
• Sutherland Wind Facility
• Rietrug Wind Facility
• Waaihoek Wind Facility
• Dwarsrug Wind Facility
• Grootfontein PV 1
• Grootfontein PV 2
• Grootfontein PV 3
• Grootspruit Solar PV Project
• Graspan Solar PV Project
• Sannaspos Solar PV Project
• Du Plessis Dam Solar PV 1
• Kentani Solar Facility
• Klipfontein Solar Facility
• Klipfontein 2 Solar Facility
• Leliehoek Solar Facility
• Braklaagte Solar Facility
• Sonoblomo Solar Facility