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On Wednesday, 20 April 2016 the Minister of Energy issued a determination setting out what bidders can expect to see in the request for proposal under the coal baseload cross border independent power producer procurement programme. The determination provides that: 3750 MW has been allocated to the cross border programme, which is an increase from the initial 2500 MW allocation proposed in December 2014; the offtaker for the electricity will be Eskom or any successor…
The governing documents that address the Southern African Power Pool’s (SAPP) role in cross-border transactions provide a framework that bidders, under the coal baseload independent power producer procurement programme (CBIPPP), that addresses some of the Department of Energy’s (DoE) requirements for cross-border projects in Southern Africa under the CBIPPP. There are two key requirements that bidders of cross-border projects under the CBIPPP will need to satisfy, before the signing of the implementation agreement. These are…
In order to ensure that the construction and operation of renewable energy projects in South Africa is not hampered by unsatisfied local communities it is important that borrowers’ and sponsors’ alike invest in educating local communities on how they derive benefit from the projects. Since our article of September 2014 (Renewable energy projects: community related protests) we have noted an increase in local community protest in and around renewable energy projects. The protests…
Small-scale embedded generation (SSEG), particularly rooftop solar photovoltaic systems, are increasingly used by South Africans as an alternative solution to South Africa’s current energy supply challenge. The Integrated Resource Plan 2010-2030 Update estimates that residential and commercial PV embedded generation could reach 22.5GW by 2020. However, there is no legal framework for the implementation of SSEG systems of less than 1MW. The National Energy Regulator of South Africa (NERSA), in addressing the issue, has published…
The Request for Qualifications and Proposals (RFP) issued by the Department of Energy (DoE) in terms of the Coal Baseload IPP Procurement Programme does not make provision for shareholding by local communities in the project company. Under the Renewable Energy IPP Procurement Programme (REIPPP), local communities were defined as residential areas or villages in South Africa within a 50km radius of the project site. The DoE previously wanted shareholding of between 2.5% and 5% by…
The Coal Baseload Independent Power Procurement Programme Request for Qualification and Proposals (RFP) was released by the Department of Energy (DoE) in December 2014. The RFP allows preferred bidders, with the approval of the DoE, to undertake any refinancing or re-arrangement of the debt or equity at any time during the term of the Implementation Agreement (which is a period of 30 years). DoE to share in the gains As a condition of its approval…
The South African Renewable Energy Independent Power Producer Procurement Programme places economic development obligations on developers. To comply with the local ownership requirement, developers may structure projects so that up to five percent of the shareholding in the project company is held by a local community. A local community that holds in excess of five percent direct or indirect shareholding in the project company is required to have both an economic interest in the…
The Coal Baseload Independent Power Procurement Programme Request for Qualification and Proposals (RFP) released by the Department of Energy (DoE) allows bidders to bid cross border projects. We highlight some of the key features relating to cross border projects under the RFP. Cross border facility and cross border project A cross border facility is a facility which is situated in a country other than South Africa but provides power to South Africa (cross border facility).…
In December 2014, the Department of Energy (DoE) released the Coal Baseload Independent Power Procurement Programme Request for Qualification and Proposals (RFP). We highlight some of the key features of the RFP. Bid phases The RFP provides for more than one bid submission phase. The first bid submission date is 8 June 2015. The DoE anticipates running more than one bid submission phase per year. Projects submitted in the first bid submission phase must be capable…
After the success of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP Programme) run by the Department of Energy of South Africa (DoE), the release by the DoE of the requests for proposals for gas, coal and hydro under the government’s baseload procurement programme is hotly anticipated. We highlight below some of the differences that we expect to see in the Coal Independent Power Producer Procurement Programme (CIPPP Programme) versus the REIPPP Programme. Single…