South Africa’s renewable energy industry has welcomed the opening of Bid Window 6 (BW6) of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP).
The sector believes the opening of the bid window will be crucial for the country to ensure energy security.
Last week, the Department of Mineral Resources and Energy opened a new procurement round, as another step towards addressing energy security and further stimulating the role of the renewable energy sector in SA’s development objectives.
During his State of the Nation Address in February, president Cyril Ramaphosa pinned his hopes on renewable energy to resuscitate SA’s frail energy sector, saying it will give a much-needed boost to the economy.
He also revealed that due to the country’s aging power stations, poor maintenance, policy missteps and the ruinous effects of state capture, SA has a shortfall of around 4 000MW of electricity.
This, as state-owned power utility Eskom, which provides about 90% of the county’s electricity, has over the years implemented multiple bouts of load-shedding, much to the detriment of the fragile economy.
Freeing the energy supply
The South African Wind Energy Association (SAWEA) notes the energy department published the announcement of the opening of BW6 of the REIPPPP, which will procure a further 2 600MW of renewable energy from independent power producers (IPPs), of which 1.6GW is wind energy, in line with the gazetted Integrated Resource Plan 2019.
“The announcement to open BW6, calling for proposals from IPPs, adds vitally-needed power capacity to the country, which continues to struggle with strangled energy supply that is preventing the necessary economic recovery that South Africa so badly needs,” says Niveshen Govender, CEO of SAWEA.
“This also adds impetus to the sector’s push for industrialisation, which relies on rolling procurement in order for the industry to attract the necessary market investment and reduce risk.”
This announcement comes off the back of Bid Window 5, which was opened a year ago and is expected to reach financial closure by the end of this month, heralding the rebirth of the wind energy industry, following a hiatus of almost seven years, the association says.
It adds the wind energy industry is dependent on policy set by government, and the association is grateful to the various government departments for implementing a number of procurement-enabling policies over the last few years.
SAWEA notes that policy shifts indicate a clear direction in terms of plans to procure new generation capacity on an ongoing basis, in line with the energy roadmap, which sees 14.4GW of new wind power over the next decade.
With consistent procurement facilitated by supporting regulations, the organisation points out the opportunities to increase local manufacturing are hugely positive.
“South Africa can address fundamental challenges of energy access, energy security and climate change through the deployment of renewable energy,” Govender adds.
“We can harness our abundant potential of increasingly cost-competitive renewable energy to service the growing demand for electricity and avoid a potential fossil-fuel lock-in, in addition to local and foreign investment. Furthermore, renewable technologies present potential for the creation of new industries, job creation and localisation across the value chain.”
The energy department has set 11 August as a firm closing date for bid submission.
This announcement comes a week after the department confirmed postponement of the signing of power purchase agreements for the Risk Mitigation Independent Power Producer Procurement Programme, which is now scheduled for the end of this month.
Meeting energy requirements
The South African Photovoltaic Industry Association (SAPVIA) also welcomed the commitment shown by government with the release of BW6.
The organisation believes this new bid window is critical in the drive to get much-needed additional generation capacity, and ultimately kilowatt hours, onto the grid.
Welcoming the news, SAPVIA spokesperson Maloba Tshehla says: “This is another positive step forward for the solar PV sector, and the broader renewable market, in our ambition to deliver affordable, secure and clean energy supply to the country.
“We must do this, as embodied in the economic development requirements of the programme, contributing to South Africa’s development needs.
“The continued release of bid windows in a timely fashion demonstrates clearly that the Department of Mineral Resources and Energy is intent on harnessing renewable energy capacity to meet the country’s energy requirements and in doing so consistently, leverage this significant infrastructure programme to drive economic development.”
According to SAPVIA, solar PV presents the least-cost, quickest-to-build option, and with every advancing technological capability, the sector continues to play an increasingly important role in meeting the country’s capacity requirements, while driving the journey of a just transition.
The organisation says solar PV will account for 1 000MW of procured energy in BW6.
“We look forward to working with our members, the Department of Mineral Resources and Energy, the Department of Trade, Industry and Competition and other stakeholders to realise the opportunities built into the programme’s economic development requirements,” says Tshehla.
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