29 September 2010 – The invitation for bids is the start of the procurement process under the renewable energy feed-in tariff programme.
The Development Bank of Southern Africa (DBSA) invited advisers at the weekend to bid for the provision of transaction advisory services for the government’s renewable energy feed-in tariff programme.
The invitation for bids is the start of the procurement process under the renewable energy feed-in tariff programme. A renewable energy feed-in tariff is a policy mechanism designed to encourage the adoption of renewable energy sources. The feed-in tariff mechanism ensures guaranteed tariffs at which power producers can sell renewable power to the national electricity grid.
Production and use of electricity from renewable energy sources are key steps towards mitigating climate change, ensuring a diverse mix of energy sources and developing the renewable energy technology industry. In terms of its 2003 white paper on renewable energy, the government wants to produce 10000GWh of renewable energy by 2013.
Acting on behalf of the Department of Energy, the DBSA has invited bids from local and international advisers to draft the procurement documentation for renewable energy projects in SA.
The Department of Energy is also expected to publish a request soon for information aimed at potential private developers of renewable energy projects. The request will be directed to renewable energy developers with energy projects already under way.
These were the projects for which comprehensive feasibility studies had been completed, the DBSA said.
It said the request for information would help in the development of a comprehensive request for proposals for renewable energy projects. It would also indicate the state of readiness of potential projects under the renewable energy feed-in-tariff programme and gauge market interest.
“The (request for information) is intended to generate information necessary to assess the progress developers have made since the announcement of the (renewable energy feed-in tariff) programme as well as the readiness of the market to enter into accelerated procurement and negotiation processes.”
“The results of the (request for information), therefore, will inform the design of the procurement process and documentation, the criteria to be developed for selection of the preferred candidates, as well as the capacity and resources required by the government for the successful implementation of this initiative.”
The National Energy Regulator of SA (Nersa) last year published renewable energy feed-in tariff for wind (R1,25/kWh), small hydro (94c/kWh), landfill gas (90c/kWh) and concentrated solar (R2,10/kWh). These tariffs were acclaimed as attractive enough to stimulate investment in the renewable energy sector.