Commenting on the NPC’s stance that the Integrated Resource Plan needs updating, Niveshen Govender, CEO of the SA Wind Energy Association (SAWEA) said the association is of the view that while the policy document may not be perfect, it certainly is effective in providing clear direction.
Reaffirming the association’s commitment to continue to support and engage the South African government and the country’s grid operators as it navigates through current power constraints, Govender said: “The development of a strategic plan under government direction should give rise to a set of solutions to address the complexities of the challenge. The determinations should consider grid infrastructure, accelerated new generation capacity, grid balancing, affordability, timelines as well as social-economic imperatives aligned to our countries objectives.”
Asked to comment on the National Planning Commission’s recommendations and suggestions to rapidly deploy renewable energy, Govender told ESI Africa they welcome the suggestions which could address short-term power issues, but the need for expert stakeholder engagement with government remains a necessity.
“We reiterate the need for a comprehensive solution that will not only address the short-term energy crisis but will deliver a comprehensive plan to address local content, industrialisation, economic impact and the strangling grid constraints,” said Govender.
“There are various outdated assumptions that may need to be updated, and we agree that the IRP should be updated more regularly, in order to stay relevant, however, we certainly advocate for the continued implementation of this policy document,” confirmed Govender.
SAWEA was paying close attention to the DMRE’s virtual bidder conference which was held on 9 July to provide additional information on the qualifying criteria and bid submission expectations for Bid Window 6.
In his opening remarks, IPP Office head Bernard Magoro was very positive about the strong indicators suggesting rolling procurement rounds for clean power technology. In particular, he mentioned the imminent release of the 513MW storage RFP set to happen before October 2022 and the announcement of Bid Window 7 before the end of 2022.
Govender added: “Our country is urgently in need of this accelerated uptake in new generation capacity, which will help stabilise the country’s energy supply so that we can move away from our ongoing struggle with power shortages.
“Furthermore the sector relies on rolling procurement to attract the necessary market investment, unlock economic benefits and support the local industrialisation of the industry across the value chain,” explained Govender.
SAWEA believes the country can expect to see large utility-scale wind farms as the contracted capacity range has been increased to a minimum 50MW and a maximum of 240MW. This is a significant increase since the first bid more than a decade ago, which was capped at 140MW.
This change takes into account the recent change to allow private sector projects up to 100MW without licencing requirements.
Bid window criteria expanding
The Association noted the virtual conference’s emphasis that bidders had to design their project to include ways to stimulate investment and deliver economic and socio-economic benefits for the country.
The IPPO has also tried to increase competitiveness, reduce potential anti-competitive behaviour and encourage the introduction of new players as it has noticed a trend of similar participants dominating a large number of previous bids.
Though the wind industry has reached up to 47% of local content in previous bid windows, SAWEA believes a coordinated plan with a guiding policy and local incentives needs to be developed to promote more local manufacturing to achieve industrialisation.
This bid window 6 has also seen the introduction of ancillary services to support grid stability – in addition to energy provision. SAWEA looks forward to seeing how this will have an impact on the design of generation plants and the associated cost implication.
The next important deadline for Bid Window 6 is submission of RFP responses closes on 11 August 2022 and preferred bidders will be announced in mid-October. ESI
