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Independent Power Producer Procurement Programme


RENEWABLE IPP PROCUREMENT PROGRAMME

 

South Africa has a high level of Renewable Energy potential and in line with the national commitment to transition to a low carbon economy, 17 800 MW of the 2030 target (according to the IRP 2010) of newly generated power to be developed are expected to be from renewable energy sources, with 5 000 MW to be operational by 2019 and a further 2 000 MW (i.e. combined 7 000 MW) operational by 2020.

As at April 2016, of the 7000 MW target for 2020, an amount of 6400 MW from 102 IPPs has been procured from Bid Windows 1 to 4 and 1S2(Smalls Programme). By end October 2016, 2.8 GW of the procured capacity from 53 IPPs had already started operations. All of the projects in BW1 and BW2 are connected and are delivering power to the grid. Projects in BW 3, depending on the individual project’s construction period, are all progressing with some projects already grid connected and the rest to follow.

The REIPP programme is not only contributing to alleviating the electrical energy shortfall in South Africa but has been designed so as to also contribute towards socio-economic and environmentally sustainable growth, and to start and stimulate the renewable industry in South Africa In terms of this IPP Procurement Programme, the Bidders will therefore be required to bid on:

             - tariff; and

             - the identified socio-economic development objectives of the Department.

The tariff will be payable by the Buyer pursuant to the PPA to be entered into between the Buyer and the Project Company of a Preferred Bidder.

The Project Company will pursue set economic objectives as agreed to in terms of the Implementation Agreement (IA) entered into between the Department of Energy on behalf of the Government of South Africa and the Project Company of the Preferred Bidder.

The following technologies shall be considered as qualifying technologies for selection under this IPP Procurement Programme:

The generation capacity allocated to each Technology is in accordance with the Ministerial Determinations and set out in the below table. The maximum tariff that a Bidder may bid for purposes of the IPP Procurement Programme is as set out in the RFP.

 

Technology

MW

Onshore Wind

6 360 MW

Concentrated solar thermal

1 200 MW

Solar Photovoltaic

4 725 MW

Biomass

210 MW

Biogas

110 MW

Landfill Gas

25 MW

Small hydro

195 MW

Small Projects

400 MW

Solar Parks

1 500MW

 

14 725 MW

 

Each Facility procured in terms of this IPP Procurement Programme will be required to achieve commercial operation by not later than the dates set out in the RFP.

Based on the IRP 2010, the Ministerial Determinations and any future integrated resource plans issued from time to time, the REIPPP Programme is designed to be of a rolling nature. Determined MW s will be procured through a continuous programme of bid windows timed as such to ensure at least one bid window every year or subsequent year prompted by the release of a specific Request for Proposals (RFP) in the market.

This rolling nature also balances Government's objectives as regards to security of supply and renewable energy targets with the technical and commercial constraints faced by potential bidders, and having regard to constitutional requirements of fairness, transparency, equitability, competitiveness and cost-effectiveness.

An RFP contains all the required information and criteria to participate in the tender process.

The tender process is open and transparent and strict adherence to governance is paid with a team of independent evaluators assessing the bids.

The award of Preferred Bidder status is a competitive process with strict qualification and evaluation criteria.

The evaluation of Bid Responses is normally conducted in two stages:

- In the first stage all Bid Responses are assessed in order to determine whether they are Compliant Bids. A Compliant Bid is a complete Bid Response if firstly submitted as is required in terms of the guidelines and criteria set out in the RFP and secondly meets or exceeds the threshold requirement in respect of every applicable Qualification Criterion.

The Qualification Criteria are divided into the following umbrella categories:

                                               o  Structure of the Project;

                                              o  Legal Criteria and Evaluation;

                                              o  Land Acquisition and Land Use Criteria and Evaluation;

                                              o  Environmental Consent Criteria and Evaluation;

                                              o  Financial Criteria and Evaluation;

                                              o  Technical Criteria and Evaluation;

                                              o  Economic Development Criteria and Evaluation; and

                                              o  Value for Money

The threshold requirement in respect of each Qualification Criterion is described in detail in the RFP.

                - In the second stage, Compliant Bids will be evaluated on a comparative basis, per Technology, in relation to Price and Economic Development.

The RFP provides potential bidders of all the required information, guidelines and criteria for bid submission. The Department will release an RFP in the market with sufficient time to allow potential bidders to finalise projects for bid submission.

Once a new bid window and the release of the RFP have been announced, the RFP will be published on the Department’s website.

Prior to accessing the RFP, each prospective Bidder shall be required to pay a non-refundable fee of R15 000 (fifteen thousand Rand) per Bidder, and to complete the registration form.

Once the registration fee is paid a potential bidder will have access to the newly released RFP, but also to all previous RFPs and bid information. A potential bidder will also be updated via briefing notes of any new developments, important information on the bidding process and key dates around the bid submission process, etc.

Payment of the registration fee shall be made without set off or deduction. The banking details for the deposit of the documentation fee are:

Account Name: GTAC - IPP

Bank: Nedbank Account Type: Current

Account Number: 1068872608

Branch Name: Corporate Client Services, Johannesburg

Branch Code: 198765

SWIFT Code: NEDSZAJJ

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