IPPToday #186: South Africa signs PPAs for 2,300 MW renewable projects
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South Africa's Minister of Energy has announced the signing of power purchase agreements (PPAs) for 27 projects procured under rounds 3.5 and 4 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP). This is the biggest IPP procurement by the Department of Energy to date, representing a total of ZAR56 billion (US$4.7 billion) of investment and over 2300 MW of generation capacity to be added to the grid over the next five years.
The majority of the projects are located in the Northern Cape region of the country, with fifteen new wind, solar PV and CSP projects. Four of the signed wind projects are located in Eastern Cape, and four signed solar PV projects are located in the North West Province. Two wind projects that have been signed are located in Western Cape. The biomass project signed will be the first IPP project to be located in Mpumalanga. Also, one small hydropower project has been signed which will be located in the Free State.
The Department estimates that altogether the projects will require 2.8 million solar PV modules, 600 inverters and 385 transformers, as well as 500 wind towers and turbines.
In his speech at the signing ceremony, the Energy Minister acknowledged that this milestone follows a long period of uncertainty. As reported on this platform, the signing has been much-delayed, causing widespread frustration amongst renewable energy proponents and doubt as to whether it would ever take place.
Most recently, a signing scheduled for 15 March was delayed by a last-minute legal challenge put forward by the National Union of Metalworkers of South Africa (Numsa) and Transform RSA, citing the potential closure of coal-fired power plants as a result of the development of the renewable projects to be detrimental to over 30,000 working class families. The organisations' application for an interdict was dismissed by the High Court on 29 March.
Once fully operational, the 27 projects are expected to offset 8.1 million tonnes of CO2 per annum. They will also save 9.6 million kiloliters of water per annum, compared to similar MW hours of electricity from fossil fuels. This is equivalent to the water needs of more than 1.2 million people a year. This is especially important to South Africa as the Western and Northern Cape provinces have suffered severe drought over the last few years.
Furthermore, the projects will create 58,000 new jobs for South African citizens, mostly for young people.
The procurement of the projects is driven in large part by the National Development Plan 2030, which envisages the installation of 20 GW of renewable energy by 2030.