The 53 renewable energy independent power producer (IPP) project bids received by South Africa’s Department of Energy (DoE) on November 4 – representing potential capacity of 2 127 MW and potential investment of R64-billion – have been evaluated by the transaction advisers appointed to the programme and the results have been passed on to the DoE for adjudication.
The National Treasury’s Karen Breytenbach, who has been part of the government team supporting the DoE with its programme to procure 3 725 MW of renewables capacity before 2016, told members of the South African Independent Power Producer Association on Wednesday that the intention remained to announce the names of the preferred bidders during the Durban climate talks, which run until December 9.
DoE deputy director-general Ompi Aphane indicated separately to Engineering News Online that the process was on track and that government was still keen to announce the qualifying bidders during the course of next week.
Breytenbach did not give an indication as to the number of projects that met the price caps stipulated in the tender, as well as the economic development criteria. But she indicated that the projects recommended for selection by the DoE were located across all nine provinces, excluding KwaZulu-Natal and Mpumalanga.
The evaluation had been conducted by technical, financial and legal professionals at a secure location in Gauteng over the past few weeks, where every effort had been made (including through the use of video surveillance and private security firms) to ensure that the evaluation could not be “contaminated”.
The government had run parallel assessments as part of an internal learning programme and the entire process had been subjected to a process audit conducted by Ernst & Young.
The outcomes sent to the DoE would be scrutinised by the department’s adjudication committee ahead of announcing the preferred IPP bidders, which would have until June 2012 to reach financial close.
All projects would need to be generating power by mid-2014, apart from the concentrated solar power plants, which had been given a deadline of 2016.
ROLLING PROCUREMENT?
The next windows for the IPP bidders would close on March 5 and August 20, with two more planned for 2013.
However, consideration was also being given to converting the procurement process into a rolling programme beyond the 3 725 MW initially sought. Much would depend, though, on ensuring there was sufficient funding in the “kitty” for the further procurement of renewables – funding which would be secured through the next tariff round, as well as from development finance institutions and global funds.
Government was currently working on the architecture for funding options to help provide a cost cushion during the transition from the current coal-based system to one that included the introduction of some 17 000 MW of renewables by 2030.
Breytenbach also announced that the simplified bid document, together with a term sheet, for small-scale renewable projects of between 1 MW and 5 MW would be released during the first quarter of 2012. Initially, this documentation was also expected to be released during the Durban conference, but scaling back and simplifying the tender had proved challenging.
Efforts would be made to align the small programme with a Development Bank of Southern Africa funding facility to support the smaller projects.
It was also likely that a Department of Water Affairs plan to exploit the hydropower potential of 21 dams across South Africa could be packaged for IPP bidders during the second quarter of 2012. A study had indicated that there was an opportunity for the projects to yield a combined nameplate capacity of 40 MW.
