South Africa’s REIPPPP Round 5 Massively Oversubscribed With Shovel Ready Wind and Solar Projects

• South Africa’s Independent Power Producer Office (IPPO) has released a list of solar and wind projects submitted in the country’s long awaited Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
• Bid Window 5 will see the procurement of 1600MW onshore wind and 1000mw Solar PV capacity. 
• A total of 63 solar and 39 wind projects have been submitted indicating that Independent Power Producers have been actively developing projects during a 5 year hiatus of renewable energy procurement under the presidency of Jacob Zuma, who favoured nuclear technology.

The IPP Office confirmed that IPP projects up to the maximum size of 75MW for Solar PV and 140MW for Wind projects will be eligible to bid in this window. Assuming all solar projects submitted are 75MW and all wind projects are 140MW (to optimise economies of scale for a competitive bid tariff), a back of the envelope calculation indicates that around 4725MW of solar and 5460MW of wind capacity could potentially be shovel ready in the country.

The Ministerial Determination promulgated on 25th September 2020 calls for the procurement of 11 318 MW from a range of energy technologies, including Renewables, Gas, Storage and Coal, in line with the Integrated Resource Plan (IRP 2019).

South Africa desperately needs new generation capacity. The country is plagued with regular bouts of load-shedding. Eskom, the countries energy utility, recently implemented another bout of load-shedding citing breakdowns totalling 14137MW while planned maintenance is 2 924MW of capacity. Read more

Judging by the sensational response to Bid Window 5, one can deduce that there are enough wind and solar projects in the country to meet over one third of wind (14400MW) and more than two thirds of solar (6000MW) IRP 2019 targets immediately!

Related news: Quality Italian inverter manufacturer, Santerno Enertronica, is setting up a manufacturing facility in South Africa 

Against this enormous and much needed new build energy generation potential plus the delays experienced in the country’s 2000MW Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), it is quite likely that REIPPPP Bid Window Round 6 will be opened in the months to come with Round 7 following soon after.

Link to the list of wind and solar projects submitted for REIPPPP Bid Window 5 HERE

 

 

More About Bid Window 5

Some key changes have been introduced in this new REIPPPP bidding round. The qualification criteria and evidence requirements have been refined and scaled down to promote a more efficient evaluation process and cost and time savings for bidders.  The Economic Development (ED) evaluation approach has also been adjusted. Unlike in previous REIPPPP bid windows, the 90/10 evaluation scoring system will be applied in Round 5, with 90% allocated to price and 10% to B-BBEE Status Contribution level.

This is in line with the Preferential Procurement Policy Framework Act (PPPFA) Exemption granted by National Treasury for the REIPPPP Bid Window 5.  Progressive ED thresholds are still included as part of the functionality requirements and must be met by bidders in order to proceed to evaluation. Preferred Bidder’s Economic Development commitments will be incorporated into the Implementation Agreement (IA) between the Department and IPP.

Bidders are required to demonstrate South African Entity Participation of at least 49%, at least 30% shareholding by black people in the IPPs, as well as 25% ownership by black people, and in particular 5% ownership by black women, in construction and operations contractors.  Apart from other commitments such as jobs, skills development, enterprise and supplier Development, and socio-economic development, bidders will also have to commit to local content spend of at least 40% of project value during construction, and at least 45% local content spend during operations.

Author: Bryan Groenendaal