South Africa Launches Round 5 Of Renewable Energy Program

2.6 GW Renewable Energy Procurement Round 5 Launched In South Africa With 1 GW To Come From Solar PV; ACWA Power Among 8 Preferred Bidders For Risk Mitigation IPP Procurement Program
South Africa Launches Round 5 Of Renewable Energy Program

The much anticipated round 5 of South Africa's Renewable Energy IPP Procurement Program (REIPPP) has been issued with the Ministry of Mineral Resources and Energy (MMRE) with a combined capacity of 2.6 GW. It seeks to procure power from 1.6 GW of wind energy and 1 GW from solar PV technology.

"Given the energy challenges that we are facing the objective is to get these projects connected to the grid as soon as possible," stated the Energy Minister SG Mantashe. The ministry will be accepting bids for this round by August 4, 2021.

The call follows President Cyril Ramaphosa's State of the Nation Address in February 2021 promising to launch 2.6 GW solar and wind energy tender under REIPPP round 5, to be followed by another bid window in August 2021 (see South Africa To Launch 2.6 GW Renewable Energy Tender).

Giving a future roadmap, that's sure to give investors some confidence, South Africa intends to release 4 more RFPs over the next 12 months, though not all is for renewable energy. It comprises 2.6 GW for renewable energy, 3 GW for gas, 1.5 GW for coal and 513 MW for battery storage.

Mantashe also shared the list of 8 shortlisted bidders for the Risk Mitigation IPP Procurement Program (RMIPPPP) released in August 2020 through which the government aims to 'alleviate the electricity supply constraints and reduce the extensive utilization of diesel based peaking electrical generators in the medium to long term'.

It received a total of 28 bids offering to provide close to 5,117 MW which the minister said demonstrates a sustained private sector interest, and out of these it shortlisted 8 preferred bids representing a total of 1,845 MW, and another 3 eligible bids of 150 MW. "It is important to note that these Three bidders are within the 2,000 MW capacity threshold in terms of the evaluation rankings, but their announcement can only be made following satisfactory value for money propositions," explained the minister.

Meanwhile the 8 preferred bidders are:

  • ACWA Power Project DAO
  • Karpowership SA Coega
  • Karpowership SA Richards Bay
  • Karpowership SA Saldanha
  • Mulilo Total Coega
  • Mulilo Total Hydra Storage
  • Oya Energy Hybrid Facility, and
  • Umoyilanga Energy

Solar PV, wind, LNG and battery storage are the technologies that these bidders have proposed to build under this round, with a weighted average price of ZAR 1,575 ($107.39) per MWh, while the lowest and highest bids offered range between ZAR 1,468 to ZAR 1,885 ($100 to $128) per MWh.

For these projects, the government has mandated the use of 50% average local content during the construction period with South African entity participation of 51% with black ownership at 41%. These facilities need to start generating first power from August 2022. The list of these preferred bidders are expected to reach financial close latest by July 2021.

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