There has, at last, been some movement on the long-awaited cogeneration and coal-independent power producer (IPP) procurement programmes. Energy Minister Dikobe Ben Martins confirmed last week that a procurement programme for 800 MW of cogeneration capacity would be initiated in April and that bidding documents would be released in May for 2 500 MW of coal generation.

The programmes were in line with Ministerial determinations published in 2012, which indicated that the additional IPP generation capacity would be procured to help meet South Africa’s electricity needs.

The determinations also indicated that 2 652 MW of baseload or midmerit natural gas capacity would be procured. But bidding processes would only be initiated once the Gas Utilisation Master Plan had been completed. Martins said the document would become available in May for public consultation.

In addition, in something of a surprise move, Martins announced that further renewable-energy projects would be added to the list of 17 preferred projects selected in November, following the third bid window under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The inclusion of additional projects under bid-window three of the REIPPPP, meanwhile, would “follow due procurement process” and contribute towards the Department of Energy’s (DoE’s) effort to raise the contribution of renewables in the country’s electricity mix.

The size of the additional allocation was not immediately disclosed, but the DoE confirmed that the allocation of additional megawatts took account of the fact “that the prices offered by the bidders are competitive, and reflect a downward trend compared to the prices in windows one and two”.

The August 18 submission deadline for bid-window four remained intact, however, with the DoE intent on buying an additional 1 000 MW of renewables capacity during that round.

Prior to the enlargement of bid-window three, the DoE had selected a total of 64 renewables projects following three bidding rounds. These projects, 17 of which still had to reach financial close, collectively represented a combined foreign and domestic investment value of more than R100-billion and a combined capacity of 3 933 MW.

In addition, the submission date for a concentrated solar power- only bidding round closed on March 31, with three bids having been received for an allocation of 200 MW.

The hope now is that the baseload and cogeneration procurement programmes are run as diligently as has been the case with the REIPPPP.

In parallel, though, it will also be necessary to demonstrate that government is committed to a longer-term role for IPPs. To do so, it will be important for there to be some decisive legislative movement to level the playing field between Eskom and private producers. Naturally, this will have to be done with due consideration to the possible impacts on the State-owned utility, which has taken on a considerable amount of debt to begin dealing with the prevailing electricity supply deficit.