Wind bids fall well short of BW7 allocation, while PV bids far exceed provision

The Independent Power Producer Office (IPPO) has confirmed that 48 onshore wind and solar PV bids with a combined capacity of 10 218 MW have been submitted under Bid Window Seven (BW7) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The bids were submitted on August 15, a deadline that was postponed from an initial date of April 30, largely owing to grid-access-related delays.

South Africa is seeking to procure 5 000 MW during the public procurement round, comprising 3 200 MW of wind and 1 800 MW of solar PV.

The solar PV allocation is substantially oversubscribed, with a total of 40 projects submitted, representing a combined capacity of 8 526 MW.

However, only eight onshore wind projects with a combined capacity of 1 692 MW have been submitted, falling 1 508 MW short of the capacity allocated to the technology for the round.

Ahead of the deadline, the South African Wind Energy Association cautioned that the imbalances in the prevailing rules for allocating grid access between projects competing under the REIPPPP as opposed to projects proceeding on the back of private power purchase agreements posed a challenge to wind projects under BW7.

The association also warned that, unless an alternative grid-access solution was found, BW7 could fail in a similar way as was the case during BW6.

During that previous bid window, none of the 23 wind projects that bid for a 3 200 MW allocation was selected as a preferred bidder, as the necessary grid capacity had been absorbed by private projects that were subjected to different grid-access rules.

Ahead of the BW7 deadline, Eskom sought permission from the National Energy Regulator of South Africa (Nersa) to reserve grid capacity for the REIPPPP to avert a recurrence of the BW6 failure.

In its application it argued that “without any form of protection, public procurement programmes remain incapable of competing with the much more agile and well-funded private sector energy procurement programmes”.

Nersa rejected the application, however, noting that Eskom had not identified the specific customers against which it intended discriminating, and also did not present objectively justifiable and identifiable differences regarding such customers, which were requirements for any approval for grid reservation.

Of the wind bids received, three are located in the Eastern Cape, two in the Western Cape, two in the Northern Cape and one in KwaZulu-Natal, with no bids made in grid-rich Mpumalanga despite various private wind projects advancing in the province.

The Free Sate has the highest number of solar PV bids with 20, followed by Limpopo (13), the North West (3), Mpumalanga (2) and the Northern Cape (2).

The IPPO will now evaluate the projects submitted under BW7 and it is anticipated that this process should be completed within three months of the bid submission deadline.