The government is expected to announce a “mega” bid window for renewable energy procurement this week as well as an “aggressive” rollout of rooftop solar.
Electricity minister Kgosientsho Ramokgopa said the cabinet is likely to approve “a mega bid window of over 15,000MW of additional renewables” at a meeting on Wednesday.
“That is the scale that we are thinking about to ensure we meet the energy mix contained in the Integrated Resources Plan of 2019, which anticipates exponential growth of the share of renewables in the energy mix,” Ramokgopa said at the Solar Show in Johannesburg.
He has managed to garner the support of President Cyril Ramaphosa and the ANC’s top leadership for his plan to extend the life of some of Eskom’s ageing coal-fired power stations. However, his comments on Tuesday suggest that the package of solutions he will present to the cabinet to deal with SA’s short- and long-term energy issues are weighted towards bolstering renewable energy generation.
Ramokgopa said Vietnam’s solar drive led to that country installing 9,000MW of capacity in a year, adding that the government will announce “the most aggressive rollout of solar” yet after the cabinet meeting.
The government will also create a financing facility to ensure there is “equitable access to renewables”.
Poor excluded
Earlier in 2023 the Treasury introduced incentives for households and businesses to invest in renewable energy. Businesses will be able to claim a 125% tax deduction for capital expenditure on all renewable energy projects. Individuals can receive a tax rebate of 25% of the cost of any new and unused solar PV panels, up to a maximum of R15,000. The incentive is available until March 1 2024.
Ramokgopa said to benefit from the incentives individuals need upfront capital “which means the poor will be excluded from the benefit of renewables”, and the government will be introducing a blended-finance facility to make it possible for the poor to access solutions such as rooftop solar.
A formal announcement is likely later this week.
The CEO of the SA Photovoltaic Industry Association, Rethabile Melamu, said she is “delighted” by the news .
Ramokgopa said the government is also working with development finance institutions to design financing solutions for manufacturers as it seeks to grow the local supply chain for the renewables sector.
The National Energy Regulator of SA (Nersa) has given the green light for the mineral resources & energy minister to procure 14,791MW from renewables and storage technologies through one or more bid windows of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) between 2024 and 2030.
Major interventions
The most recent bid windows came up short due to a lack of access to connect new renewable energy to the national grid.
Doubling the megawatts to be procured from wind and solar power in bid window 6 of the REIPPPP from 2,600MW to 5,200MW was one of the major interventions announced by Ramaphosa in 2022 as part of the energy crisis response plan.
But only five solar power projects with a combined capacity of 860MW were appointed as preferred bidders because there was no grid capacity to sign on any wind projects or more solar projects.
Ramokgopa said as a “demonstration of our commitment to the decarbonisation journey” SA should invest in transmission infrastructure so that it could “evacuate” more megawatts to the grid and unlock SA’s full potential for renewable power.
Already 800MW of stranded capacity from renewable generation could not be connected to the grid, he said. If these megawatts could be connected it could help to alleviate almost a full stage of load-shedding.
According to Eskom’s Generation Connection Capacity Assessment there is about 32,000MW of capacity to add new generation to the transmission grid. Most of this is in Gauteng, the Free State, KwaZulu-Natal and Mpumalanga.
The projects that lost out during bid window 6 submitted proposals for wind and solar farms in the Cape provinces where there is significantly less available grid capacity than elsewhere. The report shows the Northern Cape has zero available grid capacity and the other two provinces 1,600MW-1,800MW capacity.
Ramokgopa said the government and Eskom will be looking to those companies seeking to invest in renewable generation capacity to also invest in the strengthening of the grid.
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