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SA set for R47bn in energy investments

30 October 2012

South Africa's Energy Department says it is expecting R47-billion to be invested in the country through the first window of its renewable energy programme for independent power producers.

The department received bids for the first window, which seeks 1 400 megawatts of renewable energy, in November 2011 and announced the first 28 preferred bidders in December.

The outline for the first 28 preferred bidders is now in place and the department says it is ready to sign contracts, unlocking the investments.

Briefing reporters in Pretoria on Monday, Energy Minister Dipuo Peters said the department had been working closely with the preferred bidders to conclude the contract documentation, including the power purchase and implementation agreements.

"The delay for financial close was largely related to government approvals. We apologise for shifting the timeframes," Peters said, adding that the delays in government approvals had caused by the need to have fully populated contracts to be presented to the relevant structures within the government for approval.

Job opportunities in rural areas

"I'm pleased to announce that the country will receive about R47-billion of investment in renewable power generation through window 1 preferred bidders," Peters said.

The investment will provide job opportunities, especially for those in rural areas where renewable power plants are located.

According to the government's Integrated Resource Plan, a 20-year projection on electricity supply and demand, about 42% of electricity generated in South Africa will be required to come from renewable resources.

The plan places specific emphasis on broadening electricity supply technologies to include gas, imports, nuclear, biomass, and renewables (wind, solar and hydro) both to meet the country's future electricity needs and to reduce its carbon emissions.

Originally, 53 bids amounting to 2 128 MW were received across wind, photovoltaic (PV) solar systems, concentrated solar power (CSP) and small hydro.

The evaluation resulted in 28 bids, with a total of 1 416 MW being selected as preferred bidders in the first window.

The wind and solar PV projects are expected to be integrated into the country's national energy grid during 2014.

"The signing of agreements for window 1 preferred bidders will take place on 5 November," Peters said, adding that bidders were expected to honour the commitments made in their bids.

Should bidders fail to comply with their commitments, penalties such as the termination of the power purchase agreement would be implemented.

Peters said she had received concurrence from the National Energy Regulator of SA for additional allocations to the renewable programme, base load generation and the medium-term risk mitigation plan generation.

Earlier this month, Peters said she was considering a second determination that would provide additional megawatts in the renewable energy space.

"I will be promulgating these determinations before the end of the year," she said.

Source: SANews.gov.za