HomeIndustry SectorsFinance and PolicySA’s third round bidding sees prices drop dramatically

SA’s third round bidding sees prices drop dramatically

The success of South Africa’s Renewable Energy Independent Power Producer Programme (REIPPP) is illustrated by the impressive decreases in the tariff prices achieved by the winning bidders of successive rounds. It has also seen the prices of photovoltaic (PV) projects drop to levels comparable with those of wind power as the average PV prices have fallen from R2.75/kWh in the first round to R0.88/kWh in the third round.

The preferred bidder PV projects from round three of the REIPPP are the 75 MW Adams solar PV 2; the 60 MW Tom Burke solar park; the 75 MW Mulilo Sonnedix Prieska project; the 75 MW Electra Capital facility; the 75 MW Pulida solar park; and 75 MW Mulilo Prieska project.

However, the wind sector has not stood still and the prices of the projects there have fallen from R1.14/kWh in round one to R0.66c/kWh in round three. The wind project preferred bidders are the 110 MW Red Cap Gibson Bay project; the 139 MW Longyuan Mulilo De Aar 2 North wind energy facility; the 87 MW Nojoli wind farm; the 96 MW Longyuan Mulilo De Aar Maanhaarberg project; the 138 MW Khobab wind farm; the 79 MW Noupoort Mainstream project; and the Loeriesfontein 2 wind farm.

Interestingly the two CSP projects awarded in round three also showed price decreases to R1.46/kWh. This is offset by a peak pricing premium such facilities will enjoy if they dispatch power during peak demand periods in South Africa.

The 18 MW Johannesburg landfill waste project will provide electricity at R0.84c/kWh, while the 16 MW Mkuze biomass project has an electricity price of R1.24/kWh.

It should be noted that all the prices are indexed, using April 2011 as the base year, but the programme does show that the bidding process in South Africa has been a success and that renewables are starting to achieve the significant milestone of grid parity.