South Africa’s utility scale renewables procurement programme has brought 6,255MW of green power online, but don’t expect the rest of the announced procurement from Bid Window 5 onwards to come online before 2025, writes Theresa Smith.
There was a time when the World Bank lauded South Africa’s REIPPPP and pointed out that between 2012 and 2013, the country ranked tops globally for renewables IPP investment because of the competitive tender process.
The Renewable Energy Independent Power Procurement Programme (REIPPPP or REI4P) announced four consecutive bidding rounds from 2011 to 2014, halted procurement until 2018, then did rounds in 2021, 2022 and 2023.
According to the IPP Office’s latest reporting from end March 2023, REIPPPP successfully procured 7,090MW from 97 IPPs (that reached financial close) between Bid Windows 1 to 5. These are at various stages of construction or have commenced with commercial operation.
At the end of March 2023, 89 projects out of the 90 scheduled to be operational had reached the Commercial Operation Date.
This means 6,105MW of power (of the scheduled 6,204MW) had come online.
A total of 75MW of that 99MW shortfall is because one Bid Window 4 project has not yet started operation, as originally scheduled. Only 24MW of that is attributed to under-delivery against the contracted capacity as at financial close.
Not mentioned in that report is the 150MW brought online by the risk mitigation programme late in 2023.
Beyond Bid Windows 1 to 7 there have also been auctions for gas, risk mitigation and energy storage projects along with smaller scale renewables projects.
Here is a look at the bid rounds so far.
In the beginning
Bid Window 1: All 28 Projects for1,415MW have reached CommercialOperation Date (COD).
Bid Window 2: All 19 projects for 1,033MW have reached COD.
Bid Window 3: All 16 projects for 1,428MW have reached COD. One project of 17MW was cancelled.
Bid Window 3.5: Two Concentrated Solar Power Plants were procured in 2014.
One project (100MW) has reached COD and another 100MW project is still under construction.
Bid Window 4: This bid window asked for 2,130MW of wind and solar power in 2018. Of this, 25 projects (2,130MW) have reached COD and one project of 75MW is still under construction.
Bid Window 5 (online from 2025)
This bid window RFP received 102 bid submissions in 2021 and was oversubscribed by 9,44MW. The DMRE announced 25 preferred bidders to provide 2,583MW of wind and solar, with six initially receiving the nod.
When the DMRE signed another 13 projects under Bid Window 5 at the end of 2022, it brought the total signed projects up to 1,759MW renewable capacity – 784MW from onshore wind technologies and 975MW from solar PV.
By end December 2023, 12 projects had reached commercial close and were under construction to add 1,159 MW to the national grid from 2025 onwards.
Bid Window 6 (online from 2025)
This auction round received 56 bids spread across solar and wind projects. The capacity allocation was increased by the DMRE in September 2022 to 3,200MW of wind, though the 1,000MW proposed for solar stayed the same.
Grid access constraints curtailed this bid window to five preferred solar projects. A sixth project was identified when the announcement was made for preferred bidders on 8 December 2022, to fill the remaining gap to 1,000MW – 240MW Ngonyama Solar PV Park in Free State. The rest are:
- 240MW Virginia Solar PV Park 1 (Free State);
- 240MW Good Hope Solar Park (Free State);
- 120MW Doornhoek PV (NorthWest);
- 150MW Kutlwano Solar PV (NorthWest); and
- 150MW Boitumelo Solar Power Plant (NorthWest).
The six projects are now at permitting stage, prepping for construction.
At the end of March 2023, 89 projects out of the 90 scheduled to be operational had reached the Commercial Operation Date.
Bid Window 7 (comes online from 2027)
This procurement bid window was a long time coming. It is the first to be released in line with the Third Ministerial Determination, at the end of December 2023 (which seeks to procure 14,771MW of new capacity of 3,940MW of solar PV, 9,600MW of wind and 1,231MW of battery energy storage capacity).
This particular RFP is for 5,000MW of new generation capacity, comprises of:
- 1,800MW of Solar PV; and
- 3,200MW of Wind Power.
The RFP is calling for projects at an advanced stage of development that can be constructed and connected to the grid within 24 months after commercial close (which is expected six months after bidder announcement.)
The announcements are expected three months after bid submission on 30 May 2024.
In addition to energy output, prospective bidders are also required to provide ancillary services, as per the requirements of the System Operator.
Risk Mitigation Independent Power Producers Procurement Programme (to come online from 2025)
Six of the 11 appointed preferred bidders under the RMIPPPP (released August 2020) signed agreements to collectively add 428MW of dispatchable capacity to the grid.
Scatec Kenhardt 1, 2 and 3 – solar with battery energy storage for combined, dispatchable power of 150MW – started construction in July 2022. The first two reached commercial operation in November 2023 and the third in December 2023.
Umoyilanga Project (developers EDF Renewables and Perpetua Holdings) reached financial close on 28 November 2023. Construction has started on the project and commercial operation is expected by May 2025.
The Umoyilanga project will operate as a virtual power plant, combining 115MW of solar PV and 30MW of battery storage from a site in Avondale in the Northern Cape, with 63MW of wind and 45MW of battery storage from Dassiesridge in the Eastern Cape.
Then there is the Oya Energy Hybrid Dispatchable Facility (developers GDF International SA, G7 Power, Meadows Oya Energy and Perpetua RMI4P Oya). Located in Matjiesfontein, the 128MW facility project combines 155MW of solar PV power, 86MW of wind power and 92MW/242MWh of lithium-iron-phosphate battery storage with a single hybrid plant controller, all within a single location.
This greenfield development spans the Western and Northern Cape Provinces, lying between the towns of Ceres and Sutherland.
The Oya hybrid project reached financial close mid-February 2024. Once up and running Oya will provide crucial dispatchable energy to the grid.
The Mulilo Total Hydra Storage Project in De Aar, Northern Cape – 75MW – hybrid solar PV plus battery storage technology (developers TotalEnergies Hydra Storage Consortium [TotalEnergies Renewables Southern Africa; Hydra Holdco; and Reatile Renewables TEHS]). It reached financial close mid-December 2023 and is expected to contribute to the grid from 2025.
The remaining five preferred bidders under the RMIPPPP had until December 2023 to reach commercial close but their budget quotes expired, putting an end to the Karpowership, Mulilo Coega gas-to-power plant and Gemsbok PV project bids.
This means 650MW of grid capacity is once again available in Eastern Cape; 320MW in Western Cape, 180MW in Northern Cape and 480MW in KwaZulu-Natal. This creates an opportunity for a second round of the RMIPPPP, as proposed in the draft IRP2023.
Gas Bid Window 1
The DMRE wants to procure 3,000MW of capacity, energy output and ancillary services from new gas-fired power plants.
The first bid submission of the Gas IPPPP is for 2,000MW. The remaining 1,000MW capacity is reserved for a separate procurement process from facilities to be located in the area known as Zone 13 in the Coega Special Economic Zone near the Port of Ngqura.
Sellers will enter into PPAs with Eskom to provide new generation capacity in compliance with performance requirements.
Bid submissions are due 30 August 2024 and bidders announcement is expected within three months of that date.
Battery Energy Storage IPP programme – Bid Window 2 (to come online from beginning of 2027)
RFP released on 14 December 2023 for 513MW of battery energy storage capacity, energy and ancillary services in the North West supply area.
This round is to procure storage capacity spread across the eight eligible substations in the North West:
- Mercury (76MW of allocated capacity)
- Carmel (77MW);
- Hermes (77MW);
- Ngwedi (77MW);
- Midas (77MW);
- Marang (77MW);
- Bighorn (77MW);and
- Ararat (77MW).
Each substation will hold four hours of storage capacity.
The Bid Submissions Date has been extended from 30 April 2024 to 6 June 2024, to take into consideration the timeline to process CEL applications. The construction timeline is anticipated to be about 24 months.
Battery Energy Storage IPP programme – Bid Window 3
The RFP for Bid Window 3 was released on 28 March 2024. It calls for proposals for a total of 616MW (2,464MWh) of battery energy storage projects at five pre-selected substation sites identified by Eskom.
Bid submissions are due by 31 July 2024, with bidder announcements made within three months of that, and financial close expected within six months of that announcement. ESI
Disclaimer: This information was up to date at the time of going to print
Source: https://www.esi-africa.com/renewable-energy/reaping-renewables-in-south-africa/
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