The first 3 project agreements of South Africa’s 5th Bid Window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP Bid Window 5) have been signed. South Africa’s REIPPPP Bid Window 5 Request for Proposals (RFP) was released on 12th April 2021 and was the first bid window to be launched under the Ministerial Determination promulgated on 25th September 2022 under South Africa’s Integrated Resource Plan of 2019. The bid window aims to procure a total of 2,600 MW, consisting of 1,600 MW onshore wind and 1000 MW solar PV plants. The bid submission on 16th August 2021 confirmed the strong interest from the market with 102 bids submitted totaling an oversubscribed 9,644 MW. The Minister of the Department of Minerals and Energy announced 25 Preferred Bidders on the 28th of October 2021, to provide a total capacity of 2,583 MW. Of this, 1,608 MW will be procured from 12 wind projects, and 975 MW from 13 solar PV projects.
The 3 project agreements that were signed on 22 September 2022 are all procured from onshore wind technologies and will contribute a total of 420 MW of renewable capacity to the national grid. These projects are Coleskop Wind Power 140 MW; San Kraal Wind Power 140 MW; and Phezukomoya Wind Power 140 MW. These projects will be developed by international developer EDF Renewables in partnership with local shareholders.
The Coleskop project is located close to the town of Middleburg in the Eastern Cape Province, while both the San Kraal and Phezukomoya wind projects are located close to the town of Noupoort in the Northern Cape. Once these projects have reached financial close, the construction timeline is expected to be 24 months and the new generation capacity should be online by the end of 2024. The total investment amount for these projects is approximately R11 billion ($614 million), of which R7.8 billion ($435 million) is debt finance. As with other IPP procurement, this bid window was also designed to stimulate economic growth and support socio-economic transformation throughout the full value chain. In this respect, together the three projects will create a total number of 2 230 job opportunities and an amount of R543 million is dedicated to be spent on Skills Development, Supplier Development, Enterprise Development, and Socio-Economic Development. The Department of Minerals and Energy and IPP Office are currently engaging with the remaining 22 Preferred Bidders under REIPPPP Bid Window 5 with a view to finalizing the conditions precedent to enable the signing of the Project Agreements.
Minister Mantashe lauded EDF Renewables EDF for taking up the challenge to invest in the three wind power projects that are going to add some much needed renewable energy capacity to the national grid. “Congratulations and we must not put pressure on you to put energy on the grid in two months, it is not going to happen. We must accept that you are going to build the facilities and give us that energy in the medium to long term,” said the Minister.
South Africa is currently experiencing its worst ever period of load-shedding due to incessant breakdowns at its aging coal plants. This week, Eskom, the national electric utility company, had to implement Stage 6 load-shedding. Eskom’s load-shedding program is structured in Stages, where Eskom sheds a certain quantum of load from the grid to stabilize the grid. So, depending on the severity of the crisis, load-shedding is implemented in stages from Stage 1 to Stage 8, where Stage 1 sheds 1000 MW of load from the grid and in a Stage 8 scenario, Eskom takes out 8,000 MW of load from the grid. Load-shedding is implemented over 2-hour or 4-hour blocks on a rotational basis depending on the severity of the crises. Stage 8, however, means most consumers will experience a blackout for about 12 hours.
It’s really good to see some traction on these renewable energy projects. South Africa needs new generation capacity ASAP!
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