South Africa’s 2.6 GW renewables tender draws lowest solar bid of $0.02481/kWh

The South African authorities have published the list of the preferred bidders of the fifth round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP). Around 2.58 GW of renewable energy capacity was allocated through the procurement exercise.

October 29, 2021

South Africa’s Department of Mineral Resources and Energy has announced the results of the fifth round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP).

Overall, the South African authorities allocated 2,583 MW of renewable energy capacity across 25 projects ranging in size from 75 to 140 MW.

The procurement exercise’s lowest bid of ZAR 0.34425 ($0.02279) was submitted for a 124 MW wind facility planned to be built in Hantam, in the Northern Cape region, while for the solar technology the lowest price was ZAR 0.37479 ($0.02481), which was offered for six 75 MW solar parks expected to be constructed in Tokologo, an administrative area in the Lejweleputswa District of the Free State region.

“The average price for the solar PV projects of $0.029/kWh is about 13% lower than the average price for the 12 wind farms, despite having a lower average size per project,” Chris Ahlfeldt, an energy specialist at Blue Horizon Energy Consulting Services, told pv magazine.”The average solar PV price would have been even lower if Eskom didn’t have to deal with transmission constraints in the Northern Cape which has the best solar resource.”

According to Ahlfeldt, only 2 of the solar PV projects from Round 5 will be built in the Northern Cape, while the rest will be located in other provinces across the country. “It will be interesting to see how these projects plan to meet socio-economic impact goals given the need for local job creation and economic development in South Africa which is still recovering from the COVID 19 pandemic,” he also stated.

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The ministry had initially pre-selected 39 wind projects and 63 solar projects to compete in the tender.

Norwegian developer Scatec said in a press release it secured 273 MW of PV capacity in the procurement exercise. “Scatec will own 51% of the equity in the projects with H1 Holdings, our local Black Economic Empowerment partner owning 46,5% and a Community Trust holding 2.5%. Financial close is expected in the first half of 2022 with grid connection and commercial operation by the end of 2023,” the company stated, without providing further details.

*The article was updated on October 29 to add the statements from Chris Ahlfeldt, an energy specialist at Blue Horizon Energy Consulting Services.

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