South Africa hands out 1GW in second renewables tender

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The South African government announced on Monday that 19 companies had been selected as preferred bidders during the second bidding window for the Renewable Energy Independent Power Producer Programme (REIPPP), which closed on March 5.

A total of 79 bids were submitted by the deadline, representing more than 3 200 MW of potential capacity.

Overall, the REIPPP programme, which is seeking to procure 3 725 MW of renewables capacity, was expected to attract investments of around R100-billion between 2012 and 2016.

During December, the Department of Energy (DoE) and the National Treasury named the first 28 preferred bidders, along with solar and wind projects collectively representing 1 416 MW of potential capacity. These developers had until June 19 to take their projects to financial close.

The second-round projects were valued collectively at close to R28-billion, while the first-window projects could involve a collective capital expenditure of around R46-billion. The programme would create tens of thousands of temporary construction jobs and thousands of permanent operational jobs.

A total of 51 of the second-window bidders met the requirements of the REIPPP request for proposals. But, owing partly to the fact that only 1 275 MW was available, only 19 projects, representing 1 043.9 MW of capacity, were selected, Energy Minister Dipuo Peters said at a briefing in Pretoria.

Bidders present at the announcement expressed some disappointment with the fact that the full window-two allocation had not been taken up. But government explained that the next best bids would have resulted in more than 1 275 MW being allocated and that it had, thus, decided to hold off until the third bid window.

It was possible that bids would be sought for the remaining 1 165.9 MW not yet allocated for large projects during window three. The next window could also include capacity that might become available should any round-one preferred projects fail to reach financial closure.

In the next few weeks, the DoE would release a tender for projects involving less than 5 MW. An allocation of 100 MW had been set aside from the 3 725 MW currently being procured by government.

Peters said she was concerned that some of the projects named during window one were experiencing challenges in reaching closure by the June deadline, and appealed to those facing any distress to communicate with government as soon as possible.

She also appealed to the financial community to do all it could to ensure that the projects reached closure by the schedule outlined in the bidding documentation.

Director-general Nelisiwe Magubane indicated, though, that any capacity not taken up was likely to be included during the third bidding window. In addition, those developers that missed out during the first two bidding rounds would be able to make new submissions when the third window opened.

However, Magubane refused to confirm the August 20 bid-window opening, saying that the DoE and the National Treasury planned to first undertake a review to glean lessons from the two initial bid periods before inviting the next bids.

At this stage, 798.9 MW of the 1 850 MW of onshore wind allocated under the tender was yet to be allocated, while 256 MW of the 1 450 MW of solar photovoltaic (PV) available under the REIPPP remained available. Concentrated solar power’s (CSP’s) full 200 MW allocation had been taken up, while 60.7 MW of small hydro capacity remained out of the 75 MW allocated.

But the 25 MW available for landfill gas, as well as the 12.5 MW for biomass and the 12.5 MW for biogas technologies remained available and were likely to feature in the small-project tender.

As with window one, price and nonprice elements, including black economic empowerment and local content, were used to determine bid selection, deputy director-general Ompi Aphane explained.

The evaluation was conducted by financial, technical and legal experts at a secure location in Gauteng.

NINE SOLAR PV PROJECTS

Nine solar PV bidders were selected with a combined allocation of 417.1 MW against an allocation of 450 MW. There were also seven wind projects selected, representing 562.6 MW (650 MW), two small hydropower projects of 14.3 MW (75 MW) and one 50 MW CSP project, which matched the allocation cap available.

The nine solar PV bidders identified were: the 75 MW Solar Capital De Aar 3, the 74 MW Sishen Solar facility, the 9 MW Aurora project, the 8.8 MW Vredendal project, the 36.8 MW Linde project, the 69.6 MW Dreunberg venture, the 75 MW Jasper Power Company development, the 60 MW Boshoff Solar Park and the 8.9 MW Upington Solar PV plant.

The wind projects listed included: the 135.2 MW Gouda wind facility, the 137.9 MW Amakhala Emoyeni (Phase 1); the 94.8 MW Tsitsikamma Community wind farm, the 90.8 MW West Coast 1 project; the 23.4 MW Waainek venture, the 59.8 MW Grassridge project, and the 20.6 MW Chaba project.

The two small hydropower preferred bidders were named as the 4.3 MW Stortemelk hydro scheme and the 10 MW Neusberg hydroelectric project.

The 50 MW CSP project was named as the Bokpoort CSP project.

The average prices offered by the solar PV developers fell from 2.75 c/kWh in window one to 1.65c/kWh, while wind fell from 114c/kWh to an impressive 89c/kWh. The CSP prices fell slightly from 268c/kWh to 251c/kWh.

The second-window preferred bidders also offered superior local content terms, with solar PV rising to 47.5% from 28.5%, wind rising from 21.7% to 36.7% and the CSP projects rising from 21% to 36.5%.

However, Aphane confirmed that government would be seeking even better pricing and economic development terms than had hitherto been the case.

The preferred bidders identified during the second bid window had until December 13 to take their projects to financial closure.Source….
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