Winning bidders confirmed in round four of South Africa IPP programme

The number and capacity of PV projects is roughly in line with what was selected in 2013 under the third round of the Renewable Energy Independent Power Producer Procurement Programme, when six projects totalling 450MW were chosen.

Five of the PV projects in round four have already been revealed this week – three from Scatec Solar and two yesterday from South African firm, BioTherm Energy.

The developer of the sixth project, Droogfontein 2, is US-based firm, SunEdison.

The full list of projects is as follows:

Energy minister Tina Joemat-Pettersson said she expected successful projects in the latest round of the programme to reach financial close in the fourth quarter of this year and begin commissioning in November 2016.

Whether this timetable will be met, though, is open to question if the last round of the programme is any measure. After successful bids were announced in October 2013, it took until around November 2014 for projects to reach financial close because of grid connection constraints.

Moeketsi Thobela, chief executive of the South African Photovoltaic Industry Association, said these problems remained, though there were discussions under way to address them in future rounds.

The minister confirmed she had instructed officials to redesign the bidding process for the anticipated fifth round of the REIPPPP in 2016 to take account of various issues, including grid constraints in some areas of the country.

But before round five, Joemat-Pettersson also said the government would issue a “request for further proposals” for projects across all technology types from bidders who were unsuccessful in rounds one to four of the programme. This will be launched by June this year and seek to procure an additional 1,800MW of capacity.

Thobela said the big story about the REIPPPP as it evolves is the extent to which increasingly competitive pricing is making only larger projects viable – evidenced by the fact that all but one of the six projects in round four are 75MW. That is having the effect of excluding smaller local developers from participating in the programme, Thobela said.

“If you're looking at the local developers they would not be in a position to play at that scale,” Thobela said. “And that means what we need to do is look at alternative ways in which we can still have projects that are within say the sub-50MW range, but financially viable. That's part of the discussion that we still need to have. You'd need to look at a different financing model, and potentially coupled with a different pricing model as well.”

This article was updated from its original version to include additional commentary from SAPVIA.