South Africa: Disappointing 6th RE Round For Onshore Wind

• South Africa has awarded only solar PV capacity in the REIPPPP bid window 6 with 860 MW
• Tariffs were up 8% as weighted average increased from ZAR 0.45423 per kWh to ZAR 0.49048 per kWh
• An additional 6^th bidder is currently under discussions to fill up the remaining gap up to 1 GW
• Onshore wind projects were not selected due to unavailability of grid capacity in Eastern and Western Cape

South Africa has concluded the country's 6^th bid window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), awarding all of 860 MW to 5 solar PV projects even as the oversubscribed segment of onshore wind lost with no grid capacity available.

Following the evaluation of 56 bids submitted, a total of 860 MW solar PV capacity was selected with a weighted average tariff of ZAR 0.49048 ($0.0028) per kWh, representing an 8% increase from the tariffs achieved for solar PV technologies during bid window 5 at ZAR 0. 45423 per kWh.

"This is indicative of the global economic challenges experienced over the last two years resulting in increased input costs across the entire value chain," according to the ministry.

Lowest winning bid of ZAR 0.4695 per kWh was offered for Kutlwano and Boitumelo solar projects, each with 150 MW capacity and in North West province. Virginia Solar Park in Free State with 240 MW capacity was selected for ZAR 0.48650 per kWh winning tariff, and 200 MW Good Hope Park—also in Free State—offered ZAR 0.4989 per kWh.

The 120 MW Doornhoek PV Project in the North West was the facility selected with the highest winning tariff of ZAR 0.540 per kWh. Altogether these 5 projects are expected to attract an investment of ZAR 12.1 billion.

"An eligible 6th bidder has also been identified, and the Department is in discussion with the potential bidder on conditions for appointment, in order to fill the remaining gap up to 1,000 MW," added the ministry.

For onshore wind energy facilities, the ministry received bids for 4.116 GW for projects in Eastern Cape and Western Cape. However, national utility confirmed there was no grid capacity available for any of these facilities hence none of the projects for this technology made the cut.

The ministry encouraged project developers to consider developing projects in other parts of the country where there is still capacity while it builds additional grid capacity in the cape supply area.

A quick recap of the events so far. The South African Ministry of Mineral Resources and Energy had increased the capacity of bid window 6 from 2.6 GW to 4.2 GW, after increasing the share of onshore wind from 1.6 GW to 3.2 GW, while keeping that of solar at 1 GW. The bid round was oversubscribed with 56 projects representing 9.6 GW capacity, including 5.5 GW solar PV was offered by interested developers (see South Africa Unveils Bidders For REIPPPP BW 6).

The ministry has also provided an update to bid window 5. Along with Eskom, it has signed power purchase agreements and implementation agreements (IA) with 13 projects with 975 MW combined capacity, all solar PV facilities. It expects this capacity to become operational in 2025. For onshore wind, the round awarded 784 MW (see South Africa Concludes REIPPPP Round 5).