Tag Archives: IPPs

South Africa’s Renewable Energy Procurement Program

Robert Aitken from Restio Energy offers his thoughts on South Africa’s renewable energy procurement program to date.

South Africa has undertaken a very ambitious renewable energy programme which has the world watching with great interest. It has been said that the current programme to secure 3720MW of renewable energy is the largest in the world at this point in time. The approach used by the government is a competitive bid scheme (IPP Procurement Programme) where the private sector is invited to submit proposals against a stipulated amount of renewable energy required. Each of the identified renewable energy technologies has an associated tariff cap beneath which the bid must sit. The renewable energy technologies involved include; on-shore wind, solar PV, concentrated solar as well as a small amount of biomass, biogas and small-hydro.

It is an innovative and effective scheme which has thus far has been heavily over-subscribed in each of the three rounds assessed. It represents an important step for South Africa for a number of reasons;

  • This is the first large scale utility based renewable energy project in the country.
  • It will provide security of supply by diversifying the generational mix (previously predominantly coal) of electricity in the country
  • It has an increasingly demanding ‘local content’ or localisation component which is intended to stimulate the local renewable energy technology industry
  • It also has a strong community component aimed at ensuring local communities in and around these utilities benefit in a meaningful way.

It is these sorts of parallel requirements that will contribute towards the long-term operations and imbedding of renewable energy in the country. However, one of the service gaps this initiative will not address is access to electricity. The REIPPPP is a powerful grid security initiative which demonstrates the country’s willingness to engage with the private sector, promote renewables etc. Despite this 3.4 million households within the country remain without a grid connection and many households that are electrified cannot afford to use electricity particularly for thermal applications. While security of supply is crucial, the South African government needs to ensure a mixed approach (grid/off-grid, rural energy service delivery, small scale distributed initiatives, etc.) if access for all is to be achieved.

– Robert Aitken, Restio Energy