The South African government is planning to seek more interest in renewable energy development through their successful Renewable Energy Independent Power Producers Procurement Programme, which has already seen four rounds of auctions.
Through the first 4 auctions under the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), South Africa managed to allocate 5,443 MW capacity, mainly in the form of wind and solar power projects. A total number of 79 projects have been allocated to some of the leading national and international project developers.
And while the results of the fourth auction were delayed by several months due to questions over the reliability of grid access, the response to the auction was highly encouraging, with participation from emerging national project developers as well as well-established international developers.
The Minister of Energy’s Tina Joemat-Pettersson announced that the tender for the fifth auction of projects would be redesigned and released before the end of the this quarter. The minister also announced that she would approach the National Energy Regulator (NERSA) to make arrangements to offer an additional 6.3 GW in future auctions.
Some of the project developers successfully participating in the auctions include Scatec Solar, SunEdison, Acciona, Abengoa Solar, and Enel Green Power. Some of the major lenders to the selected projects are the African Development Bank, KfW, Norfund, the International Finance Corporation, Industrial Development Corporation, and the Development Bank of Southern Africa.
The auctions for REIPPPP are part of the Integrated Resource Plan 2010-2030 currently under implementation in South Africa. The initial plan under the REIPPPP was to offer just 3,725 MW, however the response of the developers has clearly been overwhelming.
The environmental and financial benefits of these projects would be enormous. A study by the Council for Scientific and Industrial Research (CSIR) stated that the 1.6 GW wind and solar power capacity operational through the REIPPPP at the end of December 2014 helped save more than $450 million. With the payments to these renewable energy projects through feed-in tariffs at around $390 million, the net ‘profit’ to the economy from these project is over $60 million.
Electricity generated from 0.6 GW wind energy projects and 1 GW solar power projects replaced 1.07 TWh electricity from diesel-fired power plants and 1.12 TWh electricity from coal-fired power plants. Renewable energy projects have thus offset more than 2 million tonnes of CO2e emissions in 2014.