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Renewable Energy Independent Power Producer Procurement Programme

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Solar potential of South Africa
4 MW Merino run-of-the-river power plant on the As River, outputting 25GWh/annum
Darling Wind Farm
Khi Solar One, a solar power tower in Upington in the Northern Cape. It has a planned annual net output of 180 GWh.

The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP or REI4P) is an initiative by the South African government aimed at increasing electricity capacity through private sector investment in solar photovoltaic and concentrated solar, onshore wind power, small hydro (<40 MW), landfill gas, biomass, and biogas.[1][2] As of 2023, a total of 123 projects have been awarded to the private sector. Private sector investment totalling R256 billion (US$17.32 billion) has been committed to the REIPPPP.[3][4] Four of the six Bid Windows have come online, totalling 6200 MW of installed capacity (or 5% of South Africa's energy supply).[5]

The programme supports the commitments made by South Africa under the Paris Agreement as of 2018, having contributed to climate change objectives, i.e. the reduction of 22.5 million tonnes of carbon dioxide (CO2) and saving 26.6 million kilolitres of water.[6]

History

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At the 2011 United Nations Climate Change Conference (COP17) in Durban, the Renewable Energy Independent Power Producer Programme (REIPPP) was introduced to implement the objectives of the Integrated Resource Plan (IRP 2010-2030);[6] of which are to diversify the country's energy mix away from fossil-fired power generation like coal and crude oil, add 30 GW to the grid before 2030,[5] take advantage of opportunities relating to a Green Economy, and in creating new green industries with at least 300 000 jobs.[7][6]

In 2023, the Development Bank of Southern Africa tendered for the programme to be reviewed in terms of its cost and efficacy.[8]

Load shedding

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Main article: South African energy crisis

In 2023, in an affidavit by outgoing Eskom CEO, André De Ruyter said former Eskom CEOs Brian Molefe and Matshela Koko refused to conclude agreements with Renewable Energy Independent Power Producers, thus exacerbating load shedding. It was estimated that up to 96% of load shedding would have been avoided had they not halted the REIPPPP.[9] According to analysts the REIPPPP is two to three years behind schedule. This is due to the programme being halted between 2015 and 2019, the Minister of Mineral Resources and Energy Gwede Mantashe not following the outline of the IRP[3] and the grid network not adequately developed in areas where renewable energy is best harnessed (the Cape Provinces).[5]

Following the Stage 6 load shedding crisis in June 2022, President Ramaphosa announced that Bid Window 6 will double the amount procured from 2,600 MW to 5,200 MW,[10] with 3,200MW allocated for wind and 1000 MW for Solar PV.[11] The National Planning Commission also proposed the 100 MW ceiling of private generation be removed.[12] It said solar and wind power projects can bring online 10 000 MW of capacity within 2–3 years.[12]

Bid window allocations

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Companies are meant to submit competitive tenders and self-fund their projects to be accepted as Preferred Bidders.[6]

As of 2021, Bid Windows 1-4 have 85 out of 92 projects operational, supplying the national grid with 71 073 GWh of renewable energy.[3]

Bid Window 5 projects will come onto the grid in 2025. Bid Window 6 is behind schedule as well.[3]

Bid Window 7 was initially meant to be a "rolling bid window" and aimed for 15 000 MW.[5] In December 2023, Bid Window 7 was announced and targeted 5 000 MW; 3 200 MW allocated for wind and 1 800 MW for Solar PV.[13]

Bid Window Allocations
Bid Window Year Allocated (MW) Number of Preferred Bidders chosen Notes
1 2011 1425.34 MW (out of 3725 MW) 30 2 allocated for Concentrated Solar Power (CSP) (150 MW); 8 for Wind (648.53 MW); 20 Solar PV (626.81 MW) 2209 MW was available for the next windows.[7]
2 2012 1040.96[14] 19[2] 1 project with CSP (50 MW); 7 Onshore wind (559.44 MW); 9 Solar PV (417.12 MW), 2 Small Hydro (14.40 MW).[15]
3 2013 1456.56 MW (out of 1473 MW) 19 The allocated projects were: 6 Solar PV (435 MW); 9 Onshore wind (787 MW); 2 CSP (200 MW); 1 Landfill Gas (18 MW); 1 Biomass project (16 MW).[15]
3.5 2014 200 MW 2 2 CSP projects were allocated, each with a 100 MW capacity.[16] The first, Kathu Solar Park, began construction in 2016. The other is Redstone Solar Thermal Power.[15]
4 2018 2204.51 MW[14] 26[16] Minister of Energy Tina Joemat-Pettersson, announced that Bid Window 4 will be extended by a further 1800 MW to reconsider unsuccessful project bids from windows 1 to 4.

1 Biomass, 12 Onshore wind, 12 Solar PV and 1 Hydro project was allocated.[17]

5 2021 2583 MW (out of 2600 MW)[18] 25 12 Onshore wind (1600 MW) and 13 Solar PV (1000 MW) projects were allocated on 28 October 2021.[19][20] The weighted average price of the Preferred Bidder projects, i.e. both Wind and Solar PV, was R473 (US$32) per MWh. Bid Window 5 will inject a total private sector investment of R50 billion (US$3.38 billion) into the economy, with 13 900 job opportunities.
6 2022 1000 MW (out of 5200 MW)[21][22][23] 6 Initially, capacity was increased from 2600 MW to 4200 MW.[22] This was then increased to 5200 MW. At the end of the bid window, 5 Solar PV (1000 MW) projects were announced and 860 MW allocated, for a total investment of R12.1 billion. Onshore wind applications, totalling 4116 MW was received, but none could be allocated since Eskom could not connect it to the grid.[21] An additional Solar PV project was announced on 23 March 2023.[23]
7 2024 (out of 5000 MW) 3 200 MW allocated for wind and 1 800 MW for Solar PV.[13]
Total 9910.37 MW 127

Risk Mitigation IPP Procurement Programme

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In August 2020, the Risk Mitigation IPP Procurement Programme (RMIPP) was initially introduced to quickly bring online 2000 MW of capacity and reduce the utilisation of expensive diesel-based peaking open cycle gas turbines. This is different from the REIPPPP where it doesn't target specific types of generation.[24]

See also

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References

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  1. ^ "Renewable Independent Power Producer Programme | South African Government". www.gov.za. Retrieved 31 October 2021.
  2. ^ a b "Bid Window 3 Preferred Bidders' announcement" (PDF). 4 November 2013.
  3. ^ a b c d Ngcuka, Julia Evans and Onke (28 January 2023). "POWER CRISIS: How the ANC's years-long delays on renewables plunged SA into darkness and scuppered plan to end blackouts". Daily Maverick. Retrieved 15 May 2023.
  4. ^ Eberhard, Anton; Kolker, Joel; Leigland, James (2014). South Africa's Renewable Energy IPP Procurement Program: Success Factors and Lessons. Washington, DC.{{cite book}}: CS1 maint: location missing publisher (link)
  5. ^ a b c d Evans, Julia (2 May 2023). "POWER CRISIS: Mega bid window to be released to market in June — but SA's big challenge is grid capacity, says electricity minister". Daily Maverick. Retrieved 17 May 2023.
  6. ^ a b c d Radebe, Jeff. "Renewable energy independent power producer (REIPP) agreements will benefit South Africa in the transition to an environmentally sustainable economic future" (PDF).
  7. ^ a b Peters, Dipuo (7 December 2011). "IPP Bids Announcement" (PDF).
  8. ^ "Procurement of a transaction advisor to Review of the Renewable Energy IPP Procurement (REIPPPP) and Evaluation model for improvement in cost effectiveness and efficiency. Exploring and recommending an alternative auction model for the REIPPP Procurement Programme" (PDF). pv magazine International. Retrieved 26 November 2023.
  9. ^ UDM vs Eskom - 2023/005779. High Court of South Africa.
  10. ^ Diemen, Ethan van (25 July 2022). "POWER CRISIS: Here it is: Ramaphosa's 'energy action plan' to end SA's rolling blackouts". Daily Maverick. Retrieved 27 July 2022.
  11. ^ "Government Communications gives update on procurement process for renewable energy IPP procurement programme bid window 6 | South African Government". www.gov.za. Retrieved 12 September 2022.
  12. ^ a b "NPC PROPOSES URGENT MEASURES TO END LOADSHEDDING CRISIS 6 July" (PDF).
  13. ^ a b "Overview of the request for qualification and proposals for new generation capacity under seventh bid submission phase of the Renewable Energy Independent Power Producers Procurement Programme" (PDF).
  14. ^ a b "IPP Projects - Project Database". www.ipp-projects.co.za. Retrieved 12 May 2022.
  15. ^ a b c "REIPPPP - Bid Window 1-4 Preferred Bidder List" (PDF).
  16. ^ a b Larmuth, James; Cuellar, Alberto (2019). "An updated review of South African CSP projects under the renewable energy independent power producer procurement programme (REIPPPP)". SOLARPACES 2018: International Conference on Concentrating Solar Power and Chemical Energy Systems. Vol. 2126. Casablanca, Morocco. p. 040001. doi:10.1063/1.5117581. S2CID 201453338.{{cite book}}: CS1 maint: location missing publisher (link)
  17. ^ "Renewable IPPPP - Bid Window 4 Preferred Bidders" (PDF). Archived (PDF) from the original on 9 November 2021.
  18. ^ Mantashe, Gwede (2021). RENEWABLE ENERGY IPP PROCUREMENT PROGRAMME (REIPPPP) BID WINDOW 5 (PDF). Archived from the original (PDF) on 31 March 2022.
  19. ^ "KEY MESSAGES FROM THE RENEWABLE ENERGY INDEPENDENT POWER PRODUCER PROCUREMENT PROGRAMME BID WINDOW 5 (REIPPPP BID WINDOW 5) BIDDERS' CONFERENCE, HELD ON 26 MAY 2021". DMRE. Retrieved 10 May 2022.
  20. ^ "REIPPPP BID WINDOW 5 - LIST OF PREFERRED BIDDERS" (PDF).
  21. ^ a b "Media Statement: BW6 Bidder Announcement" (PDF). Independent Power Producer Procurement Programme.
  22. ^ a b "Government Communications gives update on procurement process for renewable energy IPP procurement programme bid window 6".
  23. ^ a b "RENEWABLE ENERGY IPPP PROGRAMME (REIPPPP) BID WINDOW 6: APPOINTMENT OF ADDITIONAL PREFERRED BIDDER". DMRE. Retrieved 15 May 2023.
  24. ^ "Department of Mineral Resources and Energy: The Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) in Context" (PDF).
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