South Africa’s Mineral Resources and Energy Minister, Gwede Mantashe, has revealed that the government is working to shorten the procurement process of new energy to the national grid to help reduce the country’s energy deficit. Mantashe made the pronouncements last week during the signing of agreements of three renewable energy projects procured under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
“Government has committed itself to shortening its procurement processes to accelerate the process of adding new energy to the national grid. The process of building generators must also be reviewed. The 18-month period is too long when dealing with [load shedding],” Mantashe said.
Renewable energy investors have bemoaned the long and arduous procurement process for renewable energy projects in South Africa, with several government departments battling to issue permits and consents timeously. Regulatory processes and approvals are not moving fast enough to allow projects to reach financial close early, and start construction despite the country being in urgent need of new energy capacity to meet its demand and reduce the occurrence of blackouts.
“For example, the water-use licence process takes months to complete, even with the assistance of the Presidency’s office,” said the South Africa Wind Energy Association (SAWEA) in a statement last week.
“The capacity of various government departments needs to be improved to ensure that requests for permits and consents can be processed as quickly as possible,” SAWEA’s Policy and Markets Working Group added.
Last year South Africa procured 2 500MW of new renewable energy capacity last year under the 5th round of the government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The projects are yet to reach financial close with bidders citing the slow process of regulatory approvals and permits issuance as delaying the conclusion of the projects’ financial close.
Eskom, the offtaker of renewable energy projects under government’s procurement programmes also made commitments to ensure new renewable energy projects are quickly added to the grid to improve the country’s energy security.
“We have arrived at a point where we can really bring much-needed additional generation capacity onto the national grid, which is urgently needed at this point. Eskom will continue to do everything we can to assist the DMRE [Department of Mineral Resources and Energy] to facilitate the introduction of further generation capacity in the best interests of the whole country,” said Eskom CEO Andre de Ruyter, commenting at the signing ceremony for RMIPPPP projects last week.