Preferred renewables bidders for South Africa announced

South Africa’s Energy Minister Dipuo Peters has officially disclosed the names of the first 28 renewable energy independent power producer (IPP) preferred bidders, which now have until June 2012 to take their projects to financial closure.

The projects were among an initial batch of 53 bids submitted for the November 4 bid window and represent potential capacity of 1 415.52 MW and potential investment representing billions of rand.

The preferred bidders named included 18 solar photovoltaic (PV) projects, eight onshore wind projects and two concentrated solar power (CSP) projects.

The PV projects named, which range in size from 5 MW to 75 MW, included: the SlimSun Swartland solar park (5 MW), the RustMo1 solar farm (6.76 MW), Mulilo Renewable Energy Solar PV De Aar (9.65 MW), Konkoonsies Solar(9.65 MW), Aries Solar (9.65 MW), the Greefspan PV power plant (10 MW), the Herbert PV power plant (19.9 MW), the Mulilo Renewable Energy solar PV Prieska (19.93 MW), the Soutpan solar park (28 MW), the Witkop solar park (30 MW), the Touwsrivier project (36 MW), De Aar Solar PV (48.25 MW), the South Africa Mainstream Renewable Power Droogfontein project (48.25 MW), the Letsatsi Power Company (64 MW), the Lesedi Power Company (64 MW), the Kalkbult project (72.5 MW)t, the Kathu solar energy facility (75 MW) and Solar Capital De Aar (75 MW).

The combined capacity of the solar PV projects that made it through to the preferred-bidder stage was 631.53 MW.

The two solar CSP projects were named as Khi Solar One (60 MW) and KaXu Solar One (100 MW).

The wind projects listed, which collectively represented 633.99 MW of capacity, included: the Dassiesklip wind energy facility (26.19 MW), the MetroWind Van Stadens wind farm (26.19 MW), the Hopefield wind farm (65.40 MW), Noblesfontein (72.75 MW), the Red Cap Kouga wind farm – Oyster Bay (77.6 MW), the Dorper wind farm (97 MW), the Jeffreys Bay project (133.86) and the Cookhouse wind farm (135 MW).

A further two windows were planned for 2012, and two more for 2013, as part of a programme to procure 3 725 MW of renewables capacity from IPPs before 2016. The next bid window would close in the first quarter of 2012, with more than 2 309 MW, or more than 60% of the capacity, yet to be allocated.

The Department of Energy (DoE) was currently aiming to procure 1 850 MW of onshore wind, 1 450 MW of solar PV, 200 MW of CSP, 75 MW of small hydro, 25 MW of landfill gas and 12.5 MW apiece of biomass and biogas capacity. These allocations might change should there be under subscription form some technologies and an oversubscription for others.

Prices had also been capped for each technology. Wind projects would need to be priced at below 115c/kWh, solar PV and CSP at below 285c/kWh, while a cap of 107c/kWh had been set for biomass, 80c/kWh for biogas, 60c/kWh for landfill gas and 103c/kWh for mini hydro.

Speaking at a briefing held on the sidelines of the Durban climate negotiations, Peters thanked those who had partnered with South Africa to ensure that the tender had been run in an “open, fair and equitable” manner, and she promised an even better performance in subsequent rounds.

DoE director-general Nelisiwe Magubane said the bids had been evaluated by a team of professional financial, technical and legal transaction advisers and approved by the DoE’s adjudication committee. The evaluation, which took place in a secure location in Gauteng, began on November 4 and was concluded on November 28.

No details were given as to why some of the bids had been rejected. But the DoE and the National Treasury had indicated previously that the projects would need to meet the price caps stipulated in the tender, as well as the economic development criteria.

The non-price criteria, which carried a 30% evaluation weighting, included issues such as localisation, black economic empowerment, preferential procurement, community development and job creation. The bids needed to be financially sound in structure, technically viable and have received all the necessary environmental approvals.

Prospective bidders were also expected to pay a nonrefundable fee of R15 000 to be able to access the request for proposal documentation and a bid bond of R100 000 for every megawatt of capacity bid.

The projects recommended for selection were located across all nine provinces, excluding KwaZulu-Natal and Mpumalanga.

All projects would need to be generating power by mid-2014, apart from the CSP plants, which had been given a deadline of 2016. Peters stressed that the selected bidders needed to meet the timelines outlined in the tender, failing which their preferred-bidder status could be withdrawn.

Government was currently working on the architecture for funding options to help provide a cost cushion to the economy during the transition from the current coal-based system to one that included the introduction of some 17 800 MW of renewables by 2030.

A 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.

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