SAPVIA statement on the announcement of preferred bidders for Bidding Window 4
The South African Photovoltaic Industry Association (SAPVIA) welcomes the Minister of Energy’s announcement of preferred bidders for Bidding Window 4. This will help regain the momentum of the Renewable Energy Power Producer Programme.
The proven ability to deliver projects on time and on budget provides the basis for our belief that the solar PV sector, in conjunction with the wind and concentrated solar power (CSP) sectors, stands ready to bring additional generation capacity as part of the government’s 5-Point Plan (5PP) and related initiatives.
Solar PV alone can provide additional capacity of at least 2000MW per year over the next five years, from projects that form part of the flagship Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the mid-scale category (5 to 50MW) and embedded solar PV.
One of the immediate benefits of bringing additional renewable energy generation capacity online will be to buttress the sector’s further contribution towards economic growth, local manufacturing, employment-creation, as well as socio-economic development. In the midst of a debilitating electricity supply deficit, renewable energy from solar PV and wind independent power producers saved the South African economy R5.3bn in 2014, while costing R4.5bn – thus resulting in a net saving of R800 million. This is according to a report released by the Council for Scientific and Industrial Research (CSIR) on 21 January 2015, which concluded that the savings were due the contribution of solar PV and wind power generation to a reduction in coal and diesel consumption, as well as 120 fewer load-shedding hours.
It is against this background that SAPVIA welcomes the following as ways to urgently reduce the electricity supply deficit:
- Allocation of at least 1000MW of additional capacity towards Bidding Window 4, thus enabling more projects to be selected;
- Announcement that 1800W will be allocated for the procurement of projects from various renewable energy sources that participated in Bidding Windows 1 to 4 but were not selected due to price;
- Commitment that Bidding Window 5, and further Bidding Windows, will proceed after a review of the terms of the Request for Proposals (RfP);
- Additional allocation by Ministerial Determination of 6 300MW, which will take into account the effect of the capacity of 1 800MW allocated for projects in Bidding Window 1 to 4;
- Consideration for sustainable mechanisms to reduce the effect of grid constraints. From SAPVIA’s perspective, this includes encouraging the location of PV plants in areas with no grid constraints, and refining the grid ‘self-build’ model based on experience gained so far.
In addition, SAPVIA calls for the following:
- Urgent moves towards establishing an effective, independent, state-owned transmission entity that will facilitate the rapid connection of new generation capacity to the grid – including through public-private partnerships;
- Removal of barriers to the development of embedded generation PV. This takes into account current processes led by NERSA to refine regulatory rules applicable to embedded PV, as well as the finalisation of technical standards to assure safety;
- Development and implementation of a de-risked model to support solar PV projects ranging in size from 5MW to 50MW. This takes into account the increase in the average size of projects per Bidding Window, and the potential to further support economic development initiatives.
As SAPVIA, we always stand ready to engage in joint efforts aimed at finding solutions to South Africa’s electricity supply crisis, taking into account economic development imperatives. In this regard, we welcome the commitment by the Minister of Energy to improve regulatory certainty.