South Africa Announces 8 Bidders For 1.76 GW RE Projects

South African Electricity and Energy Minister, Kgosientsho Ramokgopa recently appointed eight preferred bidders to develop eight renewable energy projects. These projects will be developed under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 7. The project has a combined contracted capacity of 1.76 GW.

It further awarded the project to eight preferred bidders under the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) Bid Window 2. Both Bid Windows were released to market on 14 December 2023 and bids were received during August 2024. Evaluations were conducted over 3 months by Independent Bid Evaluation Committees under strict security measures at the IPP Office.

REIPPPP BID WINDOW 7

The Seventh Bid Window of the REIPPPP (REIPPPP BW 7) was designed to facilitate the procurement of up to 5,000 MW of renewable energy capacity, comprising 1 800 MW Solar PV and 3 200 MW Onshore Wind capacity. The Department received a total of 48 Bid Responses, totaling over 10,2GW, including forty (40) from Solar PV and eight (8) from Onshore Wind projects on 15 August 2024.

Following the independent evaluation, thirty (30) Solar PV projects and 4 (four) Onshore Wind projects were evaluated as compliant with the requirements of the Request for Proposals (RFP). Of these, 8 (eight) Solar PV projects, totaling 1 760MW, have been appointed as Preferred Bidders under the REIPPPP Bid Window 7.

Further announcements will follow in this regard. Total investments from the eight (8) Solar PV Preferred Bidders in this bid window is R31.4 billion. South African Equity Participation of 49% across all the Preferred Bidders and average Black Economic Empowerment participation of 46% have been committed in this Bid Window.

The eight (8) Solar PV Preferred Bidders have committed to creating a total of 6 971 job opportunities for South African citizens (measured in job years) during both the construction and operational phases of the contracts. These projects will allocate 38.8% of their Total Project Costs to Local Content, equating to R7.8 billion during construction and R2.4 billion during the operation and maintenance phases.

BESIPPPP BID WINDOW 2

The second Battery Energy Storage Programme in South Africa is a critical measure to assist in providing the ancillary services required by the power system, and increasing the available grid capacity in the North West, Gauteng, and Free State Supply Areas.
The site-specific BESIPPPP Bid Window 2 is designed to facilitate the procurement of up to 615 Megawatts (MW) from facilities that will provide Capacity, Energy, and Ancillary Services to Eskom at eight (8) specified sites, therefore only one Preferred Bidder is appointed per site.

The Department received 31 Bid Responses on the 29th of August 2024. Following the independent evaluation conducted from September to November 2024, the following 8 (eight) Preferred Bidders, with a total investment of R12.8 billion, have been appointed under this Bid Window:

The BESIPPPP BW2 round was found to be highly competitive, with a marked increase in the number of bids relative to Battery Energy Storage BW 1, resulting in a 35% decrease in the average evaluation price, compared to Bid Window 1 price. The eight Preferred Bidders have committed to 41% black shareholding in the IPP Project Companies, up to 27% shareholding by construction contractors, and up to 36% in operations contractors.

These projects will allocate 31% of their total project costs to local content, equating to R2.6 billion during construction and R2.5 billion during the operation and maintenance phases. The Preferred Bidders have also undertaken to invest R1.8 billion in Black Enterprise Procurement, R1.4 billion in B-BBEE Procurement on Qualifying Small Enterprises (QSEs) and Exempt Micro Enterprises (EMEs), and an additional R 659 million in B-BBEE Procurement specifically for Black Women. The Preferred Bidders have also committed to spend R 316 million on Supplier Development, Skills Development, Bursaries for Black Students, Skills Development for Black disabled people, and Socio-Economic Development initiatives over the lifetime of the projects.