The National Energy Regulator of South Africa has approved a government plan to tender almost 12 GW of power generation capacity. The decision will enable the government to procure generation capacity in line with the Integrated Resource Plan (IRP 2019). The IRP aims for up to 6 GW of new large-scale solar by 2030, as well as 6 GW of distributed-generation capacity.
The government’s new procurement scheme comes on top of 2 GW of short-term, risk-mitigation generation capacity the government is tendering through a technology-neutral exercise launched in August 2020.
The first tender for wind and solar power will likely constitute the long-expected fifth round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP). The capacity determined is 6.8 GW, to be generated from renewable energy sources (solar PV and wind), 0.5 GW to be generated from storage solutions, 3 GW to be generated from gas and 1.5 GW to be generated from coal. According to sources, the government has already commenced work with key stakeholders, including the developers, to firm up on the framework critical for the bankability of the program.
REGlobal’s Views: South Africa’s REIPPPP scheme has been successful in driving solar power capacity development in the country. The proposed tenders would create a significant opportunity under the existing regime for both domestic and global investors.