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3-8-2011 | South African DoE increased procurement to 3,725 MW rather than the 1,025 MW
The South African government’s renewable energy independent power producer (IPP) tender process got off to a rocky start on Wednesday, when bidders were initially unable to access the bid documentation, owing to an information technology glitch.
But the Department of Energy (DoE) also offered potential bidders something of a pleasant surprise by indicating that government will seek to procure 3 725 MW rather than the 1 025 MW indicated in the integrated resource plan (IRP) for the first procurement phase.
The allocation to the various renewables technologies was also released, with 1 850 MW set aside for onshore wind, 200 MW for concentrated solar thermal, a further 1 450 MW for solar photovoltaic solutions, 12.5 MW for biomass and biogas respectively, 25 MW for landfill gas capacity, 75 MW for small hydro, and a further 100 MW for small-scale IPP projects of less than 5 MW.
All told the capital investment associated with the programme is expected to be more than R100-billion, which would have to be pursued within timeframes specified in the request for proposals (RFP).
However, because the contents of the RFP were not immediately accessible, Engineering News Online was unable to immediately confirm these timelines. This publication has also been unable to immediately gauge whether potential developers are pleased with the contents of the document, as well as with the terms of the associated power purchase agreement (PPA).
But government has explained away the misalignment with the IRP by saying that the 3 725 MW is “broadly in accordance with the capacity allocated to renewable energy generation in IRP 2010-2030”.
In fact, the document states that some 17 800 MW of renewables capacity should be deployed between 2010 and 2030, with wind and solar photovoltaic expected to deliver 8 400 MW of capacity each, and concentrated solar thermal a further 1 000 MW.
DoE deputy director-general Ompi Aphane tells Engineering News Online that the enlarged procurement programme has been pursued to make the programme more attractive to those original equipment manufacturers considering localisation options.
In fact, he says the process has been specifically designed so as to contribute towards socioeconomic and environmentally sustainable growth, as well as to “start and stimulate the renewable industry in South Africa”.
Both the New Growth Path and the Industrial Policy Action Plan have placed so-called green industries at the very centre of South Africa plans to grow employment and to stimulate manufacturing investments and activities.
Trade and Industry Minister Dr Rob Davies has revealed that government is engaging with a range of international funders to partner with South Africa in implementing its large-scale renewables programmes.
Such funding will be used to offset any possible further spike in the electricity price path that could otherwise arise from the large-scale adoption of renewables. Further Davies says it could safeguard investments at the scale required to attract manufacturers of renewables technologies and components.
Government has also made it clear that bidders will be required to bid a tariff, while meeting identified socioeconomic development objectives.
In other words, the renewable energy feed-in tariff, or Refit, has been officially abandoned in favour of a two-stage selection process, involving both price and other selection criteria.
The programme will still require a special dispensation to depart from government’s preferential procurement rules, which currently included a 90% weighting towards price and only a 10% weighting for other selection criteria.
The DoE has also confirmed that the tariff will be payable by the buyer, which is expected to be power utility Eskom, in line with a PPA entered into between the buyer and the IPP.
The DoE indicated that all bids should be accompanied by a “bid guarantee” equal to R100 000 for every megawatt of installed capacity proposed. Further, prior to accessing the RFP, prospective bidders would be required to make a nonrefundable payment of R15 000 and to complete a registration form, which was available for download at www.ipp-renewables.co.za.
A mandatory bidders briefing session has been scheduled for September 14, at 10:00.
Source: Creamer Media