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South Africa’s power sector draws intense developer interest

By Antonio Ruffini

5 April 2012 – Following a Request for Information (RFI) as to the potential base load (coal, imported coal, gas, imported gas, hydro, imported hydro) and cogeneration capacity that can be made available to the country’s power system before early 2019, South Africa’s Department of Energy has received responses equivalent to 61,300 MW of potential capacity.

Cogeneration, IPP and cross-border IPP developers have expressed their enthusiasm for the request, as it implies further developments in the sector following many years of frustration and inaction. It is anticipated this could lead to a Request for Proposals (RFP) by the South African government.

This follows the process being undertaken in the form of the renewable energy bidding (Rebid) process to supply 3,725 MW of renewables capacity to South Africa whereby two bidding windows have already been concluded. The first renewables bidding window concluded in the final quarter of 2011 saw 28 preferred bidders announced accounting for 1,416 MW of wind and solar capacity.

The second renewables bidding round which closed on the fifth of March 2012 saw 79 tenders submitted representing 3,233 MW of renewables capacity. This round was anticipated to be more competitive than the first round as only 2,309 MW remains to be allocated, with still another three possible further rounds of bidding remaining.