South Africa: DMRE Signs 13 Renewable Energy Agreements

The Department of Mineral Resources and Energy (DMRE) has signed agreements with 13 renewable energy providers under Bid Window 5 of government’s Renewable Energy Independent Power Producers Procurement Programme (REIPPP).

At least six more preferred bidders under Window 5 are yet to close and are in discussions with the department to conclude procurement.

These projects are expected to add some 975MW of energy to the grid over the next 24 months and have attracted investment of some R34.3 billion.

“Once all Conditions Precedent have been met, and projects have reached commercial and financial close, they will enter into the construction period, which is expected to be 24 months. The new generation capacity should therefore be online from 2025.

“With the signing of these 13 agreements, the department has now concluded 19 out of the 25 announced projects under Bid Window 5, which will add an overall total of 1 759MW renewable capacity to the national grid. This comprises 784 MW from onshore wind technologies and 975 MW from Solar PV,” the department said.

The projects are expected to create some 7 701 job opportunities and provide training and skills development opportunities.

“[The] bid window achieved an overall 49.2% South African ownership, of which the total B-BBEE [Broad-Based Black Economic Empowerment] ownership amounts to 36.2%. A percentage of the total project spend will be retained for local suppliers, encouraging the growth of the local industry. The minimum local content commitments by the Bid Window 5 IPPs [independent power producers] amount to 46% of total project value during construction, and 42% during operation.

“All the signed Bid Window 5 projects will also contribute over R1.9 billion to Skills Development, Supplier Development, Enterprise Development, and Socio-Economic Development in the communities in which they operate,” the department said.

The department has also announced the five preferred bidders under Bid Window 6, at an investment of R12.1 billion.

Those projects are expected to add some 860MW to the grid, with a sixth bidder yet to be officially appointed to bring that figure up to 1 000MW.

The department said although it had received bids from wind farm projects, these had to be rejected due to a lack of grid capacity by Eskom.

“Minister Gwede Mantashe emphasised that the department is engaging with Eskom to find ways around the grid challenges, especially considering that the National Energy Regulator of South Africa is currently considering a Determination for 14 791MW of new generation capacity.

“It is critical that the grid accommodates this additional generation capacity. The Cape supply region remains the most attractive area for development of wind and solar projects, and is also the area where we have historically achieved the cheapest prices. However, the Minister encouraged project developers to consider developing projects in other parts of the country where there is still capacity, whilst the country builds additional grid capacity in the cape supply area,” the department said.

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