The state of SA’s independent power
O To date, 112 projects have been successfully procured during the Renewable Energy Independent Power Producers Procurement Programme (REI4P) bid windows completed at the end of 2015. Of these, 54 have reached commercial operation date and have contributed 2.9GW to the national grid.
O The average lead time of the operational IPPs under the REI4P has been 1.8 years and were within budget in 98% of cases.
O Since 2012, the REI4P has attracted R201.8-billion in investment, 25% of which has been foreign direct investment and 75% domestic. The delayed projects have a value of R58-billion.
O By the end of 2015, the tariff for utility-scale wind and solar photovoltaic energy was 62c per kilowatthour. Concentrated solar power was R3.09/kWh. The tariff for baseload
Energy Consulting Services writes: “The price cap is lower than what many projects bid at a couple of years ago, and may be an unbankable level for some. In particular, the CSP [concentrated solar power] (100MW), small hydro (5MW) and biomass (25MW) projects included in this determination will have the most difficulty if held to the same price cap.”
He added that the price cap also doesn’t account for the effects the squeeze on project costs will have on the other benefits of the projects, such as local content, job creation and socioeconomic development of coal IPPs in 2016 was R1.03/kWh. The new coal-fired power stations Medupi and Kusile final costs will depend on when they are completed but in 2016 they were R1.05/kWh and R1.16/kWh respectively.
O South Africa is the largest wind-power producer in Africa, fifth in the world for concentrated power generation, and 10th for utility-scale solar power. — local communities — all these are now at risk of being cut.
Webber Wentzel’s legal advice to the South African Renewable Energy Council in November last year was that the preferred bidders have a right to approach a court to enforce the conclusion of the power purchase agreements, and that they have a reasonable prospect of success.
A renewables industry insider said: “If I were one of these IPPs, especially the concentrated solar power guys, I would sue.”
But Davin Chown, the chairperson of the South African Photovoltaic Industry Association (Sapvia), said a potentially protracted legal case was not thought to be in the industry’s best interest, although it is an option.
He thought the minister’s announcement, after years of silence, is a positive development. “There’s been this blockage for two years now causing huge problems for people and organisations and having a massive impact on the market.