The South African government has kicked off the sixth round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The programme is designed to facilitate private sector investment in renewable energy development. Under this sixth round, the authorities aim to procure 2.6 GW of solar and wind power.
The Department of Mineral Resources and Energy (DMRE) is launching the pre-qualification process for the development of new renewable energy capacity, which includes 1 GW of solar PV and 1.6 GW of wind power. Interested IPPs have to submit their proposals by 22 August 2022.
According to the DMRE, the qualification criteria have been developed to promote the participation of projects that can be constructed within 24 months after their financial close and connected to the national power grid as soon as possible.
The procurement exercise is also part of South Africa’s plan to tender almost 12 GW of solar capacity and follows the recent publication of the new Integrated Resource Plan (IRP) of the country. The IRP aims to develop up to 6 GW of new large-scale solar, as well as 6 GW of distributed-generation PV capacity, by 2030.
The fifth round of REIPPPP, launched in March 2021, also has the same objective of acquiring 1.6 GW of wind and 1 GW of solar capacity. The bidding for the fifth round was closed in October 2021, which resulted in the selection of 25 preferred bids. It included 12 wind and 13 solar projects ranging in size from 75 to 140 MW.
The transmission capacity constraints in the Northern Cape province made it difficult for some IPPs in the fifth round of REIPPPP, so most of the developers will likely target other provinces in the sixth round. The projects in the new round have the potential benefit of spreading local socio-economic impacts to other parts of the country
Out of 58 GW of total installed capacity, more than 80% of electricity in the country is generated from thermal power plants, owned by the public utility Eskom. In recent years, its power grid has been boosted by renewable energy implemented under the REIPPP program.
South Africa is still dealing with the problem of load shedding and its transition away from coal needs quick procurement of these renewable energy projects and connecting them to the grid. The government wants to accelerate its energy transition and reduce its coal fleet over the next few years, which is in line with the country’s environmental commitments made at COP26.