14 November 2011

South Africa: Dept Receives Bids for Renewable Energy

Photo: Warrenski/Flickr
Investment in renewable energy will provide job opportunities, especially for those in rural areas where renewable power plants are located.

Pretoria — The Department of Energy says it has received 53 bids to provide renewable energy and intends to announce preferred bidders during the COP17 conference to be held in Durban later this month.

Over 270 potential bidders had paid the R15 000 fee necessary to receive bid documentation. The deadline for submission of bidding documents for the first window was 4 November.

All bidders intending to bid for the first and second window were required to attend a compulsory bidders' conference held in September.

Bids received cover different technologies as per the determination by the Minister of Energy, but wind and solar energy bids are in the lead.

Addressing the media in Pretoria today, Department of Energy Director General Nelisiwe Magubane said all was going well, except that they were facing challenges around environmental approval.

She said the department would announce successful bidders around June next year.

"I would like to believe that our documents were robust enough to support a bidder to submit a bid that can reach financial close. We provided bidders with an opportunity to request clarity," Magubane said.

The department wants 40 percent of the bidding companies to be South African.

The contract price needs to amount to 70 percent and the social development 30 percent of the tender comparison package; this is far higher than the 90-10% BBBEE split required up to now.

According to the Electricity Regulation Act, the Minister of Energy determined that 3 725 megawatts of energy must generated from renewable energy sources.

The 3 725 megawatts is broadly in accordance with the capacity allocated to renewable energy generation in Integrated Resource Plan (IRP) 2010-2030.

The Minister decided that the Independent Power Producers (IPP) Procurement Programme has to be designed to procure the 3 725 megawatts and to contribute towards socio-economic and environmentally sustainable growth, job creation and to stimulate the renewable energy industry in South Africa.

In terms of the IPP Procurement Programme, the bidders will be required to bid on tariffs and the identified socio-economic development objectives of the department.

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