Evaluation of first renewable-energy project bids begins as first deadline closes (05 November 2011)

By: Terence Creamer
5th November 2011

The evaluation of the first bids received under South Africa’s tender for the procurement of 3 725 MW of renewable energy capacity from independent power producers (IPP) would begin during the “coming week”, the Department of Energy (DoE) revealed at the weekend, after the first bid window closed at midday on Friday.

The DoE aims to procure 1 850 MW of onshore wind, 1 450 MW of solar photovoltaic capacity, 200 MW of concentrated solar power, 75 MW of small hydro capacity, 25 MW of landfill gas and 12.5 MW of biomass and biogas respectively.

The department would announce preferred bidders in each category during the upcoming climate negotiations, known as COP 17, which are due to take place in Durban from November 28 to December 9.

The department did not immediately confirm the number of bids received, nor how many megawatts of capacity were represented therein.

In the run-up to the November 4 deadline more than 400 bidders registered their interest in the tender. However, the DoE and the National Treasury had cautioned potential bidders to refrain from submitting bids that did not fully comply with the technical, financial, environmental, economic development and social stipulations outlined in the documentation released on August 3.

These high entry barriers had been met with some concern, particularly from developers of smaller projects. It was also widely accepted that these stringent stipulations would prevent developers from taking up the full 3 725 MW on offer by the close of the first bidding window.

But director-general Nelisiwe Magubane confirmed that a second bid window would close in March 2012 and would be followed by three subsequent rounds. She encouraged those who missed the first deadline to express their interest ahead of the March deadline.
 
The DoE also confirmed that a separate procurement process for the small renewable energy IPP projects, involving a total capacity of 100 MW, would start in early 2012 and that more information on this process would be provided at a later stage.