The government has decided to ramp up procuring additional renewable energy to shore up electricity supply in the country as Eskom’s generation capacity struggles to meet demand, but will take more than 24 months to come online.
Minister of Mineral Resources and Energy Gwede Mantashe last week said he planned to launch the 6th Window for bidders in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) by January 2022.
The Bid Window 6 will look to procure 2 600MW of renewable energy following an oversubscribed Bid Window 5 which also procured the same amount at reduced prices.
“We are aiming to release Bid Window 6 by no later than the end of January 2022,” Mantashe said.
“Bid Window 6 will also include 1 600MW of onshore wind and 1 000MW of solar PV in accordance with the Integrated Resource Plan 2019.”
Last week, Mantashe announced 25 Preferred Bidder projects, which will provide a total of 2 583MW of wind and solar energy to the grid.
The bid window will procure a total of 1600MW from onshore wind and 1 000MW from solar PV plants.
However, this renewable energy will not immediately end load shedding as it would take more than 24 months to come online.
The appointed preferred bidders will be expected to reach commercial close in about 6 months’ time, subject to the required regulatory approvals, but they are expected to start generating electricity by earliest in April 2024.
Mantashe said these projects would inject a total private sector investment amount of about R50 billion into the South African economy and create almost 14 000 jobs.
Norway’s Scatec, which was awarded preferred bidder status on three solar projects totalling 273MW, said it expected to achieve grid connection and commercial operation by the end of 2023.
“We are pleased with the South African government’s commitment to the REIPPP programme and their announcement within the set time frame,” said Scatec’s chief executive, Raymond Carlsen.
Eskom urgently needs an additional 4 000MW of capacity to meet average demand for electricity supply.
The power utility suspended load shedding on Friday night as generation capacity had sufficiently recovered and the demand reduced over the long weekend, with breakdowns totalling 14 618MW while planned maintenance was 4 855MW of capacity.
Eskom had plunged the country into darkness last week with crippling Stage 4 load shedding, threatening the fragile economic recovery.
Earlier on Friday, Eskom chief operations officer Jan Oberholzer reiterated that power cuts will continue in the absence of additional capacity that would plug the shortage due to some units taken out for maintenance.
Oberholzer said they typically needed between R8 billion to R11bn a year to do proper and adequate maintenance of its fleet, and 24 months to plan it effectively.
“We need about R11bn per annum to do the maintenance, however, it needs to be released well in advance.”
BUSINESS REPORT ONLINE