|Energy: New renewables bid window may be fast-tracked
Spring has brought fresh hope for renewables as SA's energy regulator smoothed the way last week for the procurement of more independent power, writes Legalbrief. The SA Renewable Energy Council (Sarec) expressed optimism last week that the long-awaited fifth bid window (BW5) of the Renewable Energy Independent Power Producer Procurement Programme could be fast-tracked in light of the energy regulator’s recent concurrence with a Ministerial determination opening the way for the procurement of 11 813 MW of new generation capacity. According to an Engineering News report, in a statement signed by chairperson Terence Govender, Sarec said the determination ‘came ahead of its initially anticipated date’, giving its members hope that the BW5 request for proposals (RFP) could be ‘expedited’. Sarec members include the Solar Thermal Association of Southern Africa, the South African Photovoltaic Industry Association, the South African Energy Storage Association and the South African Wind Energy Association. The Department of Mineral Resources and Energy (DMRE) has indicated that it was aiming to release the BW5 bid documentation in December, while the Political Task Team on Eskom, which is chaired by Deputy President David Mabuza, has stated that the DMRE would open-up various bid-windows, including BW5, and that the ‘process will be completed in December 2020’. The determination has not yet been formally gazetted, but the DMRE expects that it will be published within the coming week. Besides a procurement allocation of 4 800 MW for onshore wind and 2 000 MW for solar photovoltaic generators, the determination also caters for 3 000 MW of gas to power, 1 500 MW of new coal and 513 MW of energy storage.
The SA Wind Energy Association has welcomed Nersa's move. A Bizcommunity report quotes Ntombifuthi Ntuli, CEO of the SA Wind Energy Association (Sawea), who said: ‘We are hopeful that policy and procurement can work hand in hand to enable a green power revolution that will support the economic growth that is so desperately needed in SA.’ Sawea portends that the country’s continued power crisis is a problem that will keep recurring unless the country executes decisive policy initiatives and implements the 2019 Integrated Resource Plan (IRP). This development is the next step to making this happen. ‘It is clear from the 2019 IRP that the new generation capacity should come from low-cost and reliable renewable energy sources, such as wind and other clean power technologies, especially as renewables can be rolled out within a period of 18 to 24 months, so it is the most feasible option to close the short term capacity gap and give the country a chance to catch its breath,’ Ntuli said.
It seems that Eskom’s CEO, Andre De Ruyter, agrees with this sentiment. He is reported, in a number of media sources, as acknowledging the global shift to renewable energy and that renewable power is cost competitive power, whilst delivering on reduced emissions and jobs. To this end, the utility has established a Just Energy Transition office, to engage workers and communities. Another win for the renewable sector is the recent issuing of draft regulations by the DMRE, which paves the way for municipalities to be able to procure their own power from Independent Power Producers, the Bizcommunity report notes. Once that regulation is approved it will open a new market segment for renewable energy procurement. ‘We have also seen an increased interest from private sector, particularly the members of the energy intensive users group, to procure power directly from Independent Power Producers,’ said Ntuli.
There is also hope that a move towards race equity is imminent within the BW5 procurement process. Speaking during a webinar last week, Independent Power Procurement Office CEO Tshifhiwa Bernard Magoro said the BW5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) would be launched by the end of January 2021 at the latest, but that the RFP could be released before the end of 2020. A Mining Weekly report notes that Magoro told participants at the webinar that, once gazetted, the determination would set in motion a series of procurement schemes that would be implemented over the coming five to eight years. He indicated that deliberations with the DMRE and the National Treasury ahead of the finalisation of the RFP would home in on the themes of increasing black participation in the full REIPPPP value chain, including ownership, as well as how to raise the level of local content and stimulate industrialisation around the roll-out of the projects. Black Energy Professionals Association chair Meta Mhlarhi argued that the REIPPPP RFP needed to be ‘re-imagined’ to support far greater participation by black South Africans in the scheme.
New renewables bid window may be fast-tracked