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Renewable energy REBID first round technical evaluation complete
by Mike Rycroft, editor, Energize magazine
At a meeting of the South African Independent Power Producers Association (SAIPPA) on Wednesday 30 November 2011, Karen Breytenbach of the National Treasury of South Africa announced that the first bidding window of the first tranche of renewable energy generation had been 57% subscribed, with a total of 53 bids received for some 2127 MW of RE generation capacity with a value of R64-billion.
This compared favourably with the first tranche total of 3725 MW that was being sought by the DoE, and Breytenbach indicated that bids received were for renewable energy projects located across all provinces, with the exception of KwaZulu-Natal and Mpumalanga.
The Department of Energy (DoE) had published a request for proposals (RFP) in August 2011 for the first tranche of 3725 MW of renewable energy which is required to be in service by 2016. The programme for this first tranche made provison for up to five bidding windows, with the first closing on 4 November 2011. Huge interest was shown in the programme, with more than 400 potential bidding companies registering and drawing bid documentation from the DoE.
Wind energy projects constituted about 50% of the capacity bid in the first bidding window, with the balance being solar power projects (including two concentrating solar plants) and one small hydro-power project. Projects are required to be delivering power to the grid by 2014, with the exception of the concentrating solar plant which has been given until 2016 to achieve this.
Breytenbach indicated that the bids have already been evaluated by the transaction advisors, and the results have been passed to the DoE for adjudication. The government ran a parallel assessment process for internal learning purposes and the whole process is said to have been audited by independent auditors.
The balance of 1615 MW required for the first tranche of RE will be offered for tender in four further bidding windows, two in 2012 and two in 2013, if the full requirement is not achieved in the earlier bidding windows. Treasury is also considering a "rolling" bid process rather than discrete blocks, but how this will be applied in practice is still uncertain.
There appears to be significant interest in the second and subsequent bidding windows, with the Department of Environmental Affairs reporting some difficulty in processing all the environmental authorisations required for the first round. A number of developers indicated their intention to change to the second window as they were unable to meet the readiness criteria for the first window of the RFP.
The relatively high response to the first bidding window has caused some uncertainty on what to expect from subsequent windows, although there appears to be a strong interest from bidders who could not participate in the first round. There is no clarity on what path would be followed if the required capacity is not achieved in subsequent bids.
In spite of the stated intention of the DoE to release the results and the names of the preferred bidders at COP 17, at the time of writing this appears not to be the case. Neither is there any indication on when the results will be made known, what information will be released, how it will be released, and to whom it will be released.
At a side event for media at the bidders conference held on 14 September 2011, the director general of the DoE, Nelisiwe Magubane, stated that the REBID prices were expected to be be significantly lower than the REFIT tariffs that had previously been determined by NERSA and subsequently abandoned by the DoE and Treasury, and that the process was, in part, intended to determine the real cost of getting renewable energy systems operating on the ground in South Africa, and that the pricing information obtained could influence future programmes.
Once bid prices from the first round are known, this will surely influence subsequent bid prices into a narrow band (ignoring the effects of cost reductions). Could this precipitate a return to a form of renewable energy feed-in tariffs (REFIT) in the future? Time will tell.
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Winners of the 2011 SAIEE National Student Project Competition
The winners of the 2011 SAIEE National Student Project Competition, which took place in the new Engineering Building at the Potchefstroom Campus of the North-West University on Thursday 24 November 2011, are:
- 1st Prize in the University category: Myrin Naidoo, University of Pretoria, with his project "Smartphone Controlled Unmanned Vehicle
- 1st Prize in the University of Technology category: Japie Greeff, Tshwane University of Technology, with his project "Util Labs Generic Test Jig Framework"
Due to the exceptionally high quality of the projects and the superb presentations, the judges decided to award discretionary prizes to the following students:
- Bradley Marques and Benjamin Sim, University of the Witwatersrand, for their project "Mona Lisa's Smile"
- Thembani Mzekeli, Cape Peninsula University of Technology, for his project "Radial Feeder Protection Training Module"
South Africa's leading tertiary educational institutions of electrical, electronics, computer and information engineering (academic universities and universities of technology) participated by fielding eligible teams of final-year undergraduate students at the contest, which was opened by SAIEE President Andries Tshabalala, divisional MD, ACTOM Head Office.
For the third consecutive year, EE Publishers was the lead sponsor of the SAIEE National Student Project Competition, and donated R25 000 for the prize money and staging of the 2011 event. Other sponsors of corporate gifts to all participants included Zest WEG Group, Powertech Transformers and City Power Johannesburg.
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