Private sector to invest another R50bn in renewables
Barely 24 hours after his cabinet colleague asked for the procurement of new electricity generation capacity, Mineral Resources and Energy Minister Gwede Mantashe on Thursday night announced the preferred bidders who will jointly invest R50 billion in renewable energy projects expected to start generating by April 2024.
On Wednesday October 27 Public Enterprises Minister Pravin Gordhan held a briefing about the current round of load shedding that intensified to stage four on that day. He expressed his frustration at the slow pace of the procurement programme for new generation capacity, stating that the country needs an additional 4 000 – 6 000MW.
Read: Gordhan tries to reassure country as Stage 4 load shedding bites
Mantashe on the other hand emphasised that newly procured projects still need to be developed and are not an immediate solution for load shedding.
“The problem is not a shortage of capacity connected to the grid. The problem is projects connected to the grid are not available.”
Eskom needs to be fixed, said Mantashe.
The preferred bidders jointly offered 2 583 MW, of which 1 608 MW will be based on onshore wind and 975 MW solar PV.
This is a game changer in South Africa. We have actual bid prices in the REIPPP 5 auction that demonstrate that its now cheaper to contract solar and wind energy than to pay for the coal to fire @Eskom_SA’s power stations.
— Anton Eberhard (@AntonEberhard) October 28, 2021
The weighted average fully indexed price of the preferred bidders is 47.3c/kWh with the wind projects coming in at 49,5c/kWh ad solar PV at 42,9c/kWh.
Read:
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Eight IPPs to plug over 1 800MW to power grid
This is the cheapest since the inception of government’s renewable energy procurement program in 2021. The prices could however have been even lower if not for constraints on the transmission grid that prevented some of the cheaper projects to be selected.
From the results announced it is clear that grid constraints are now shaping the development of renewable energy countrywide with projects increasingly being situated in provinces less preferred by bidders in earlier rounds.
The Free State got a total of 8 projects, which is more than the Northern Cape (7) with its premium solar resources. The Western Cape also got seven projects, Eastern Cape 2 and KwaZulu-Natal one.
Officials of the department confirmed that the grid is now saturated in the Northern and Western Cape with little capacity left in the Eastern Cape.
Nevertheless, Eskom will do a reconciliation after this announcement to confirm where there is still capacity left.
It is clear that the appetite among investors was huge with a total of 102 bid responses representing 9 644 MW.
Mantashe said the preferred bidders will now work towards financial close by December.
The department plans to release the next bid window in January next year.
The winning bidders are:
- Coleskop WEF
Fully Indexed Price (ZAR/MWh): R601.17 million
Contracted Capacity (MW): 140
Province: Eastern Cape
Local Municipality: Inxuba Yethemba
- Wolf Wind Farm
Fully Indexed Price (ZAR/MWh): R617.70 million
Contracted capacity: 84
Province: Eastern Cape
Local municipality: Dr Beyers Naude
Sannaspos Solar PV Project
Fully Indexed Price (ZAR/MWh): R479 million
Contracted capacity: 75
Province: Free State
Local municipality: Mangaung
Grootspruit Solar PV Project
Fully Indexed Price (ZAR/MWh): R476.50 million
Contracted capacity: 75
Province: Free State
Local municipality: Matjhabeng
Kentani Solar Facility
Fully Indexed Price (ZAR/MWh): R374.79 million
Contracted capacity: 75
Province: Free State
Local municipality: Tokologo
Klipfontein Solar Facility
Fully Indexed Price (ZAR/MWh): R374.79 million
Contracted capacity: 75
Province: Free State
Local municipality: Tokologo
Klipfontein 2 Solar Facility
Fully Indexed Price (ZAR/MWh): R374.79 million
Contracted capacity: 75
Province: Free State
Local municipality: Tokologo
Leliehoek Solar Facility
Fully Indexed Price (ZAR/MWh): R374.79 million
Contracted capacity: 75
Province: Free State
Local municipality: Tokologo
Braklaagte Solar Facility
Fully Indexed Price (ZAR/MWh): R374.79 million
Contracted capacity: 75
Province: Free State
Local municipality: Tokologo
Sonoblomo Solar Facility
Fully Indexed Price (ZAR/MWh): R374.79 million
Contracted capacity: 75
Province: Free State
Local municipality: Tokologo
Waaihoek Wind Facility
Fully Indexed Price (ZAR/MWh): R529.78 million
Contracted capacity: 140
Province: KwaZulu-Natal
Local municipality: eMadlangeni
Du Plessis Dam Solar PV 1
Fully Indexed Price (ZAR/MWh): R475.45 million
Contracted capacity: 75
Province: Northern Cape
Local municipality: Emthanjeni
Dwarsrug Wind Facility
Fully Indexed Price (ZAR/MWh): R344.25 million
Contracted capacity: 124
Province: Northern Cape
Local municipality: Hantam
Sutherland Wind Facility
Fully Indexed Price (ZAR/MWh): R428.27 million
Contracted capacity: 140
Province: Northern Cape
Local municipality: Karoo Hoogland
Rietrug Wind Facility
Fully Indexed Price (ZAR/MWh): R428.27 million
Contracted capacity: 140
Province: Northern Cape
Local municipality: Karoo Hoogland
Graspan Solar PV Project
Fully Indexed Price (ZAR/MWh): R470 million
Contracted capacity: 75
Province: Northern Cape
Local Municipality: Siyancuma
San Kraal WEF
Fully Indexed Price (ZAR/MWh): R564.45 million
Contracted capacity: 140
Province: Northern Cape
Local municipality: Unsobomvu
Phezukomoya WEF
Fully Indexed Price (ZAR/MWh): R564.45 million
Contracted capacity: 140
Province: Northern Cape
Local municipality: Unsobomvu
Brandvalley Wind Farm
Fully Indexed Price (ZAR/MWh): R496.90 million
Contracted capacity: 140
Province: Western Cape
Local municipality: Laingsburg
Rietkloof Wind Farm
Fully Indexed Price (ZAR/MWh): R502.70 million
Contracted capacity: 140
Province: Western Cape
Local municipality: Laingsburg
Beaufort West Wind Facility
Fully Indexed Price (ZAR/MWh): R427.41 million
Contracted capacity: 140
Province: Western Cape
Local municipality: Prince Albert
Trakas Wind Facility
Fully Indexed Price (ZAR/MWh): R427.41 million
Contracted capacity: 140
Province: Western Cape
Local municipality: Prince Albert
Grootfontein PV 1
Fully Indexed Price (ZAR/MWh): R484.60 million
Contracted capacity: 75
Province: Western Cape
Local municipality: Witzenberg
Grootfontein PV 2
Fully Indexed Price (ZAR/MWh): R484.60 million
Contracted capacity: 75
Province: Western Cape
Local municipality: Witzenberg
Grootfontein PV 3
Fully Indexed Price (ZAR/MWh): R484.60 million
Contracted capacity: 75
Province: Western Cape
Local municipality: Witzenberg
Source: moneyweb.co.za