South Africa’s Department of Mineral Resources and Energy (DMRE) has issued a request for proposals for procurement of 2 600MW of new renewable energy projects from independent power producers (IPP). This was announced by South Africa’s energy minister Gwede Mantashe last week. 1 600 megawatts of the new energy procured will come from wind energy and 1 000 megawatts from Solar PV, the DMRE said.
The procurement exercise is part of the country’s Bid Window 5 of the world renowned Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) that the country launched a decade ago.
Given the energy challenges that we are facing the objective is to get these projects connected to the grid as soon as possibleGwede Mantashe, Energy Minister
The Minister also announced the preferred bidders for the procurement of the 2000MW of new capacity under Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). RMIPPPP is an energy procurement initiative that the Pretoria government launched last year to curb the power deficit that the country is currently experiencing and to reduce the extensive utilisation of diesel-based peaking electrical generators. The country has been experiencing rolling blackouts that’s costing the country billions of Rands a day and stifling economic recovery.
Renewables industry celebrates the new procurement
The announcement of new energy procurement from renewable energy independent power producers was met with celebration by investors and the renewable energy sector. “The announcement by the Minister to open Bid Window 5, calling for proposals from IPPs, marks the rebirth of the wind energy industry, as the last bidding round took place almost seven years ago, in 2014,” said Ntombifuthi Ntuli CEO of the South African Wind Energy Association (SAWEA).
South Africa’s energy Minister Gwede Mantashe has set the 4th of August 2021 as the closing date for bid submission.
The South African government intends to release four more Requests for Proposals (RFPs) within the next 12 months.
The RFPs will include:
- 2 600MW of additional renewable energy capacity
- Three thousand megawatts (3 000MW) from gas
- One thousand five hundred megawatts (1 500MW) from coal
- Five hundred and thirteen megawatts (513MW) from battery storage
Awarded independent power producer (IPP) projects will sign 20-year power purchase agreements (PPAs) with state utility Eskom.
South Africa’s new energy regulations now also allow IPPs to sell power directly to municipalities. The minister also indicated that the licencing exemption threshold for self generation will be increased to 10MW. Pouring water on the industry’s calls to raise the threshold from 1MW to 50MW.