In an address dominated by the announcement that South Africa would indeed be moving ahead with a controversial procurement process for 9 600 MW of new nuclear capacity, Energy Minister Tina Joemat-Pettersson offered some interesting feedback on the performance of another electricity procurement programme: the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
She reported that the competitive-bidding model for the procure- ment of renewable-energy projects from independent power producers (IPPs) had delivered major cost reductions since its intro- duction in 2011. In April 2014 terms, the average per-kilowatt-hour tariff for onshore wind had declined by 55% to an average of 62c, while the solar photovoltaic tariff had fallen by 76% to 79c.
Following four bidding rounds under the REIPPPP, 5 243 MW had been procured, with 37 projects, or 1 827 MW, already connected the grid. The programme had also secured capital investment commitments of about R170-billion. “On average, 15% of this energy was delivered to the power system during system peak periods, alleviating pressure on the power system. The energy contribution should grow to approximately 7 000 GWh per annum, with the first 47 renewable-energy IPPs fully operational and producing at full capacity by mid-2016,” the Minister said.
In addition, by 2022, 17 000 MW of IPP capacity could be added to the South African electricity mix from renewable-energy, cogeneration, coal and gas sources, with the Department of Energy (DoE) set to procure the capacity at a rate of 2 400 MW a year.
The department had submitted new determinations to the National Energy Regulator of South Africa (Nersa) to enable it to buy an additional 6 300 MW under the REIPPPP, while a request for proposals for an additional 1 800 MW from existing renewables bid submissions would be released by June.
The DoE was also seeking Nersa’s concurrence for a determination relating to the procurement of 1 800 MW from cogenerators and had released a request for information for gas-fired electricity generation, the outcome of which would guide the design of a 3 126 MW ‘Gas to Power Procurement Programme’. The Minister confirmed progress in the area of coal, but announced that the bid-submission date for the Coal Baseload Independent Power Producer Programme had been extended from June to the end of August 2015.
Primarily through the REIPPPP, government has shown that it is capable of running “competitive, fair, transparent and cost effective” procurement processes. As citizens, we need to insist on the same degree of rigour during any nuclear process, as the financial and implementation risks will dwarf anything previously undertaken during the democratic era.