Mining Weekly

Mineral Resources and Energy Minister Gwede Mantashe reported that the bid submission deadline for Bid Window Six (BW6) of the Renewable Energy Independent Power Producer Procurement Programme would be delayed by between 45 and 60 days to ensure procedural fairness in light of President Cyril Ramaphosa’s announcement that the size of the round would be doubled from 2 600 MW to 5 200 MW.

The bid submission date for BW6 was initially set down for August 11, after the request for proposals (RFP) documentation was published on April 6.

Speaking during a briefing of the newly established Energy Crisis Committee, Mantashe said it would be “unfair to expect people to bid for double the capacity if they're not given the notice”. However, government still needed to make a final decision on the duration of the extension.

He said a formal notice of the extension would be made soon.

In July, Eskom’s Grid Access Unit reported that it had received a total of 219 grid-access applications in relation to BW6, which at that stage was still limited to 2 600 MW.

On July 25, Ramaphosa announced that the round would be doubled as part of a broad-ranging set of interventions designed to add additional private generation capacity to the grid as part of efforts to respond to intensifying load-shedding, as well as to provide Eskom the headroom it required to increase coal maintenance and reduce diesel use.

Mantashe also confirmed that a new Section 34 Ministerial determination would be published to allow for the procurement of the balance of the renewables capacity catered for in the Integrated Resource Plan of 2019, which includes an allocation for 14 400 MW of wind and 6 000 MW of utility scale solar photovoltaic (PV) by 2030.

He indicated that the determination would be published only once concurrence had been secured from the National Energy Regulator of South Africa, but provided no timeframe for such publication.

Meanwhile, Trade, Industry and Competition Minister Ebrahim Patel said that localisation “flexibility” had been introduced to address the difficulties that some of the 25 BW5 preferred bidders were having in meeting local content requirements.

These difficulties were said to be partly responsible for delays in the projects progressing to financial close, which was initially scheduled for April, but which had since been shifted to a two-stage deadline of July and September respectively.

Patel said the 100% local-content designation for solar PV modules had been reduced to 35% and that those bidders continuing to face delays or difficulties in timeously securing modules from the two local producers – ARTSolar and Seraphim – were entitled to apply for a full exemption.

“This is a wide deviation and it's been put in place because we believe it's most helpful to the economy and at the same time it's been structured to enable local production of some of the demand from local producers,” Patel explained.

He added that localisation targets would be increased incrementally during future bid windows.

“We've taken the view in government, as set out by the President in the address to the nation, that the priority is to secure as much electricity into the grid as rapidly as possible.

“[Electricity supply is] fundamental: it's important for the economy, it's important for growth, it's important for industrialisation and even our localisation ambitions across the economy.

“And so, therefore, we've reached the conclusion that the localisation targets for component manufacturing – in this case, the PV solar module – should not retard the speed with which the independent power producers and Eskom can get energy onto the grid.”