The South African Minister of Energy (the Minister) has, in consultation with the National Energy Regulator of South Africa (NERSA), issued new ministerial determinations for additional capacity allocation for the country’s renewable energy, gas and cogeneration procurement programmes.

RENEWABLE ENERGY

The Minister has issued a determination for an additional 6,300 MW of capacity allocation for future bid windows under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). This determination follows the Minister’s announcement in April this year of certain key measures aimed at accelerating and expanding the REIPPPP.

The additional megawatts made available by this determination are to be allocated across the technologies as follows:

Onshore wind:                             3,040 MW

Solar photovoltaic:                        2,200 MW

Concentrated solar power:              600 MW

Biomass:                                    150 MW

Small hydro:                                60 MW

Biogas:                                      50 MW

Small projects:                             200 MW

With this determination, the capacity allocation for the procurement of new generation capacity in future bid windows will almost double from previous determinations, which totalled 6,725 MW. The remaining available megawatts of previous determinations will in all likelihood be taken up under the expedited bid window currently underway with bids due for submission by 1 October 2015.

GAS

The Minister has also issued a separate gas-specific determination stating that new generation capacity for the procurement of 3,126 MW can come from any gas type or source. This includes natural gas delivered to the power  generation facility by any method (including by pipeline from a natural gas field or elsewhere or a liquefied natural gas (LNG) based method), coal bed methane, synthesis gas or syngas, above or underground coal gasification, shale gas and any other gas type as may be considered appropriate.

COGENERATION

The Minister has issued an amendment to the existing determination relating to the Medium Term Risk Mitigation Project IPP Procurement Programme 2012 by including additional capacity allocation for new generation capacity for the procurement of 1,800 MW to be generated from:

  • waste heat or furnace off gas;
  • cogeneration (i.e. the simultaneous generation of electricity and useful thermal energy from a common fuel source); and
  • an energy source which is a co-product, by-product, waste product or residual product of an industrial process and / or sustainable agricultural or forestry activity.

THE IMPORTANCE OF THESE ANNOUNCEMENTS

The renewable energy determination will be welcomed by prospective bidders and investors as it provides the desired certainty that there will be a pipeline of renewable energy projects in South Africa’s procurement of much needed  new electricity generation capacity. At the same time, the determinations on gas and cogeneration projects signal the government’s commitment to diversify South Africa’s energy mix as the country intensifies efforts to keep the lights on and industry working.