Energy Minister Tina Joemat-Pettersson. Picture: TREVOR SAMSON
Energy Minister Tina Joemat-Pettersson. Picture: TREVOR SAMSON

PRIVATE sector investment in renewable energy generation will reach R193bn following the announcement on Sunday of another 13 preferred bidders for wind and solar photovoltaic (PV) projects by Energy Minister Tina Joemat-Pettersson.

Renewable energy is regarded as the quickest way to add capacity to the grid, but, as it is weather-dependent, it cannot provide base-load capacity. SA’s renewable energy programme is the fastest growing in the world and has seen large investment flow into the country, while prices of energy production have fallen.

In order to accelerate the programme, Ms Joemat-Pettersson said in April that in addition to the 13 bids she selected in the fourth window, a further 13 projects that were good to go would be added at a later date. The addition means SA has commissioned 92 renewable projects with the potential to add 6,327MW of capacity to the grid.

As part of their bids, independent power producers are obliged to contribute to socioeconomic development in the relevant area, with R19.1bn committed in projects in the next 20 years.

Several large multinational and foreign national power utilities in partnership with local entities have shown a keen appetite for the programme, which has four rounds, with a fifth anticipated in the second quarter of this year. As technology improves and risk diminishes, prices of renewable energy in SA’s projects have been plummeting.

The Department of Energy’s deputy director-general Ompi Aphane said "there had been an overwhelming interest from local and foreign investors who offered excellent prices, which demonstrates confidence in public-private partnerships (PPPs) in the South African energy sector".

The process works through a competitive bid system in which bidders strike a power purchase deal with the department on behalf of Eskom, which undertakes to buy the power they produce.

Since the first window bid in 2011, the solar photovoltaic energy price has dropped 76% and has fallen 55% for wind. Wind tariffs are now competitive with the predicted cost of producing coal-fired energy at Medupi and Kusile.

Mr Aphane said the country had the potential to become "a global player for alternative solutions that will ultimately unlock Africa’s potential".

In her budget vote speech last month Ms Joemat-Pettersson also presented plans to expand the production of energy by other fuels. Most significant was the release of a request for data for gas-fired generation. She said the request would "guide the design of a gas-to-power procurement programme" with a combined 3,126MW allocation.

The Gas Utilisation Master Plan, which is a critical building block of establishing a natural gas sector, was "in the final stage of internal approval" and would be released for public comment within the next three months, she said.

The first request for coal-fired generation by independent power producers, which was announced last December and was due to close this month, would be extended for another two months "in order to ensure a successful procurement process with firm results".

The minister said the procurement of 9,600MW of nuclear energy would begin next month. The process to choose "a strategic partner" would be complete by the end of the financial year.