South Africa Concludes REIPPPP Round 5

2.6 GW Renewable Energy Capacity For South African Auction

South Africa Concludes REIPPPP Round 5

South Africa’s REIPPPP bid window 5 has come to a close with 25 preferred bidding projects selected to bring online around 2.6 GW capacity. Scatec has won 273 MW solar power capacity in the tender. (Photo Credit: Scatec)

  • South Africa has awarded 2.583 GW of renewable energy capacity in the REIPPPP bid window 5
  • 13 solar PV projects won 975 MW capacity with an average weighted bid of ZAR 0.42879 per kWh
  • For wind energy projects, the weighted average bid was ZAR 0.49522 per kWh
  • Winning prices could have gone further down, according to the Energy Ministry, if there were no grid constraints
  • By January 2022, the government plans to launch REIPPPP bid window 6 for 1.6 GW of onshore wind and 1 GW of solar PV capacity

South Africa has selected 25 preferred bidding projects for its Renewable Energy IPP Procurement Programme (REIPPPP) bid window 5, procuring 975 MW of solar PV and 1.6908 GW of wind energy capacity (total: 2.583 GW), as against 2.6 GW target. Agreements will be signed with the winners once financial close is achieved over next 6 months.

Weighted average price for solar PV as determined in this round was ZAR 0.42879 ($0.028) per kWh, while lowest winning bid for this technology was ZAR 0.37479 ($0.025) per kWh.

For wind energy projects, the weighted average bid was ZAR 0.49522 ($0.032) per kWh, and lowest winning bid was ZAR 0.34425 ($0.023) per kWh, also the lowest winning bid in the tender.

Altogether, the weighted average price of preferred bidder projects for the entire bid window is ZAR 0.47394 ($0.031) per kWh, the lowest price achieved by the REIPPPP since its inception in 2010, shared the ministry and added that it could have gone further down if it was not for grid constraints that ‘prevented some of the cheaper projects from being selected’.

South Africa estimates these projects to create thousands of jobs and mobilize a total of around ZAR 50 billion in private investment to the economy.

This round was oversubscribed as the Ministry of Mineral Resources and Energy said bid window 5 attracted 102 bids representing 9.644 GW capacity in all, out of which 25 winning projects (solar PV: 13; onshore wind: 12) were picked. In August 2021, the country had shortlisted 63 solar PV and 39 onshore wind power facilities for this round (see South Africa Releases List Of Bidders For REIPPPP 5).

Norway’s Scatec said it has won 273 MW solar power capacity in the bidding round 5 and expects to achieve grid connection and commercial operation by the end of 2023. It will own 51% of the equity with remaining co-owners.

Ireland’s Mainstream Renewable Power led consortium was awarded 50% of the total allocated capacity in the round with 1.27 GW in the form of 6 solar and wind energy projects each, out of 25 awarded. With 850 MW already won by the company in the last 4 bid windows, Mainstream said its total awarded capacity in South Africa is now over 2.1 GW.

List of winning projects in this round is available on the Energy Ministry’s website.

Keeping the momentum on, the ministry plans to launch REIPPPP bid window 6 latest by January 2022 for 1.6 GW of onshore wind and 1 GW of solar PV capacity, expecting to encourage more competition and further reduced prices.

The ministry said to date it has procured and signed agreements with 93 independent power producers (IPP) for 7.308 GW of total capacity, out of which 89 projects with 6.855 GW combined capacity are already grid connected.

In addition, there are 11 preferred bidder projects with 1.995 GW combined capacity under Risk Mitigation IPP Procurement Programme. Commercial agreements for these facilities are to be signed in January 2022, post which the projects can pursue grid connection.

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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