- In their request for qualification and proposals for new generation capacity under seventh bid submission phase of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), South Africa’s Independent Power Producer Procurement Office (IPPPO) set a deadline of 30 April for bid submissions.
- The IPPPO has now extended that deadline to 30 May 2024, issuing notice with a briefing note on 8 March without formal press statement.
“As a result of the extension of the CEL application timeline, and following consultation with Eskom, the department has approved the consequent extension of the bid submission date to allow Eskom more time to process the CEL applications, and also taking into consideration further requests from bidders to allow more time for the preparation of their bid responses,” the note reads.
The sovereign debt cover offered to bidders in REIPPPP BW 7 has been reduced to 80%. Bidders who still have the appetite to participate in REIPPPP must now build in 20% debt default cover in their financial models which is likely to result in higher bid tariffs. Read more
Link to the full REIPPPP BW7 RFP Summary HERE
The national energy procurement programme has been plagued by delays and mismanagement since Gwede Mantashe was appointed as the country’s Minister of Mineral Resources and Energy in 2018. Read more
The brief reveals that there are further challenges with the programme which will no doubt cause further pivot to private sector projects by independent power producers (IPP’s). This is something the country’s state owned and state-run energy utility, Eskom, can ill afford. In their 2023 AFS report, they lay blame to the worsening of the country’s energy crisis, where blackouts of up to 10 hours are a daily occurrence, on the IPP Office and their ongoing delays in procuring new generation capacity. Read more
REIPPPP in decline
Only 56 bids were received for the country’s REIPPP Bid Window 6. This marks a dramatic decline in bids by around half compared to Bid Window 5 which was massively oversubscribed, attracting a total of 102 bids. Only five Preferred Bidders with projects totalling 860MW were appointed under the 6th Bid Window of the REIPPPP.
Related news: I was wrong – South Africa’s energy procurement programme is in serious trouble
No wind projects awarded in REIPPPP Bid Window 6. The Department received Onshore Wind bid responses amounting to 4116 MW for the Bid Window 6, all of which are located in the Eastern Cape and Western Cape supply areas. Following the confirmation from Eskom during the evaluation that no grid capacity was available to connect any proposed Onshore Wind projects in these supply areas, the Department could unfortunately not award any of the wind projects up to the allocated 3200 MW under the bid window.
Since then, Mantashe appears to be adding preferred bidders piecemeal without any public announcements. Read more
In a most recent twist and likely also a cause of the BW7 deadline extension, is the announcement by Eskom at the end of January 2024 that additional feed-in capacity in Eastern Cape (790MW) and Western Cape (2680MW) has been made available through curtailment. Read more
Related news: What is curtailment? An electricity market expert explains
Author: Bryan Groenendaal
