Renewables

DMRE initiates sixth renewables bidding round

6TH APRIL 2022

BY: TERENCE CREAMER

original article here

The Department of Mineral Resources and Energy has officially launched the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) with the release of bid documentation on April 6.

As has become the norm, prospective bidders are required to pay a R25 000 nonrefundable fee for each prospective project and complete a registration form before receiving the request for proposals (RFP) documentation.

The RFP advertisement does not indicate how much renewables capacity has been allocated to the latest auction, but it is anticipated that at least 1 600 MW of onshore wind and 1 000 MW of solar photovoltaic (PV) will be procured in line with the yearly allocations outlined in the Integrated Resource Plan and catered for by a subsequent Ministerial determination.

The South African Wind Energy Association (SAWEA), which welcomed the launch of a sixth bidding round, indicated that 2 600 MW would be procured, including 1 600 MW of wind.

SAWEA CEO Niveshen Govender described the new procurement round as another step towards addressing energy security and to supporting the local manufacture of renewables components.

“The announcement to open BW6, calling for proposals from IPPs, adds vitally needed power capacity to the country, which continues to struggle with strangled energy supply that is preventing the necessary economic recovery that South Africa so badly needs.

“This also adds impetus to the sector’s push for industrialisation, which relies on rolling procurement in order for the industry to attract the necessary market investment and reduce risk,” Govender said in a statement.

The DMRE advert states that a bidders’ conference will be held prior to the closing date for bid submissions of 17:00 on August 11.

The Independent Power Producer Office (IPP Office), which oversees the procurement on behalf of government, has also confirmed that financial close for the wind and solar projects being procured under BW5 is still scheduled for the end of April.

It reports that the Eskom board has approved the conclusion of power purchase agreements (PPAs) for the projects.

In October, Mineral Resources and Energy Minister Gwede Mantashe announced that 25 preferred bids had been selected, representing nearly 2 600 MW of wind and solar PV capacity.

The projects have a combined investment value of about R50-billion and the weighted average price across both wind and solar PV projects came in at an impressive 47.3c/kWh, the lowest yet to be achieved in South Africa.

The IPP Office also announced that the signing date for the much-delayed Risk Mitigation Independent Power Producer Procurement Programme projects had been rescheduled to the end of April.

A signing ceremony was expected to take place in Pretoria on March 31 but was postponed “due to outstanding matters and conditions to be addressed in respect of the PPAs with Eskom, and the need to provide the preferred bidders and their lenders adequate time to undertake due diligence reviews of the project agreements”.

Financial close on the so-called emergency procurement round has been postponed three times, with the initial deadline having been set for the end of July 2021 

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