IEEJ：2016年5月掲載 禁無断転載

The South African Energy Independent
Power Producers Procurement Programme(IPPPP)
A partnership between:
Department of Energy
National Treasury
Development Bank of Southern Africa…”it (REIPPPP) has already established a flagship public-private partnership model forSouth Africa, and indeed the rest of Africa, and in the process is helping alleviate Eskom’s
current power crisis while also reducing greenhouse gas emissions.”- Enabling Renewable Energy in South Africa: Assessing the REIPPPP, WWF, August 2014

IEEJ：2016年5月掲載 禁無断転載

Overview• IPP Office role and mandate• Progress to date | 2010 – 2015
– IPPPP portfolio overview– REIPPPP highlights (electricity capacity and broader benefits)• Where to from here | 2015 and beyond– IPPPP going forward• Issues and challenges– Key issues and solutions

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IPPPP ROLE AND MANDATE

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Role and mandate of the IPPPP Office•Primary mandate is to secure electrical energy from the private sector for
renewable and non-renewable energy sources.
-•

Established Nov 2010 by the South African Department of Energy (DoE), National
Treasury (NT) and the Development Bank of Southern Africa (DBSA)

Designed to contribute to the broader national
development objectives of job creation,social upliftment and broadening of
economic ownership.

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2010 to 2015

WHERE DO WE STAND TODAY?

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IPPPP portfolio status at a glance (…1)
Non-renewable IPP programmes
Carrier (Capacity
determined)

Masterplanning

Project
preparation

RFP

Bid submission

Bidannouncement

Financial close

COD

Coal (2 500 MW) – local
and cross boarder

IRP

Completed

15 Dec 2014

Nov 2015

Q2 2016/17

Q2 2017/18

2021 onwards

Cogen (1 800 MW)

IRP

Completed

4 June 2015

1a – 11 Aug 2015;
1b – 9 Sept 2015

1a - 15 Dec 2015
1b – Q3 2016/17

1a – Q2 2016/17
1b – Q4 2017/18

1a - Q4 2016/17
1b – Q4
2017/18

Floating Power Plants

August2015

Conceptualization

1st draft RFP
completed

Imported Gas to Power(3000 MW)

Dec
20152

Document
preparation

RFQ – Q2
2016/17
RFP – Q4
2016/17

Q3 2017/18

Q4 2017/18

Q4 2018/19

First power
2021/22 ongoing

Domestic and Piped Gas(126 MW)

Dec
20152

Document
preparation

Q3 2016/17

Q1 2017/18

Q3 2017/18

Q1 2018/19

2018/19 ongoing

Peakers (1 020 MW)

IRP

Completed

Completed

Completed

Completed

Sept 2013

30 Sept 20155;
9 Sept 2016

Project currently on hold

Where COD – Commercial Operation Date, RFP – Request for Proposals; IRP – Integrated Resource Plan (*Green areas indicate milestones completed with completion dates shown. Grey areas indicate
planned milestone dates.) Note 1. GC – Grid connected. Note 2. A Gas Policy and Strategy Framework is in the process of development. Note 3. 16 of the 17 projects have signed. One IPP still to finalisefinancial close. Note 4. Dates applicable to the 4 response submissions under BW1. Note 5. Dedisa reached COD on 30 September 2015.

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IPPPP portfolio status at a glance (…2)
Renewable IPP programmes
Masterplanning

Project
preparation

RFP

Bid
submission

Bidannouncement

Financial close

COD

Bid window 1 (1 424 MW)

IRP

Completed

3 Aug 2011

4 Nov 2011

6 Dec 2011

5 Nov 2012

100% COD
100%GC1

Bid window 2 (1 044 MW)

IRP

Completed

3 Aug 2011

5 Mar 2012

21 May 2012

9 May 2013

78% COD
89% GC1

Bid window 3 (1 456 MW)

IRP

Completed

3 May 201319 Aug 2013

29 Oct 201312 Dec 20152

0% COD
5.88% GC1

Bid window 3.5 (200 MW CSP)

IRP

Completed-

31 Mar 201415 Dec 2014

Q1 2016/17

Q4 2018/19

Bid window 4 and 4 additional(2 205 MW)

IRP

Completed

26 May2014

18 Aug 201416 Apr 2015

Q2 2016/17

Q2 2017/18
onwards

Bid window Expedited(1 800 MW)

IRP

Completed

25 Jun 2015

11 Nov 2015

Q2 2016/17

Q4 2016/17

Q4 2018/19
onwards

Bid window 5

IRP

Document
Preparation

Q2 2016/17

Q3 2016/17

Q1 2017/18

Q3 2017/18

Q2 2020/21
onwards

Small renewables First Stage
Two (49 MW)

IRP

Completed-

3 Nov 2014

4 Oct 2015

Q1 2016/17

Q3 2018

Small renewables Second
Stage Two (51 MW)

IRP

Completed

18 Dec 2015

Q2 2016/17

Q3 2016/17

Q2 2017/18

Q3 2020

Small Renewables
Bid Window 3 (100 MW)

IRP

Document
preparation

Q2 2016/17

Q3 2016/17

Q1 2017/18

Q3 2017/18

Q2 2020/21
onwards

Carrier (Capacity determined)
Renewable energy (13 225 MW)

Where COD – Commercial Operation Date, RFP – Request for Proposals; IRP – Integrated Resource Plan (*Green areas indicate milestones completed with completion dates shown. Grey areas
indicate planned milestone dates.) Note 1. GC – Grid connected. Note 2. 16 of the 17 projects have signed. One IPP still to finalise financial close.

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The REIPPPP is most advanced and alreadymaking a significant contribution to power supply
in the country
As at 31 December 2015:6

bid rounds (bid windows 1, 2,
3, 3.5, 4 and 1S21) completed102

selected as preferredbidders identified with…

2 021

MW already operationalfrom 40 IPPs

334
MW electricity
6 376 capacity procured

bids received and evaluated(17.9 GW total capacity)

R194 billion

investment attracted forenergy infrastructure inbid windows 1 – 1S2

Note 1. bid window 1S2 | Small scale projects, first completed procurement window comprised of a two stage bidding process

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From November 2011 to December 2015
6 376 MW from 102 renewable energy projects
have been awarded– Wind projects contribute more than half of total capacity
Renewable
Energy(13 225 MW)

BW1

BW2

BW3

BW3.5

BW 4

SmallsALL

Capacity No. of Capacity No. of Capacity No. of Capacity No. of Capacity No. of Capacity No. of Capacity No. of
MW Projects MW Projects MW Projects MW Projects MW Projects MW Projects MW Projects

Wind

649

8

559

7

787

7

1 362

12

9

2

3 366

36

Solar PV

627

18

417

9

435

6

813

12

30

6

2 322

51

Solar CSP

150

2

50

1

200

2

600

7

Landfill Gas

18

1

18

1

Biomass

17

1

52

4

19

3

6 376

102

Small Hydro
1425

28

14

2

1040

19

1457

17

200

200

2

2

25

1

5

1

2 205

26

10

2

49

10

20%

0

18%

0

1 425 MW

1 040 MW

1 457 MW200 MW

2 205 MW49 MW

6 376 MW61%

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The REIPPPP is bringing electricity online
quickly and cost effectively
megawatts operational

83%

Q3
2014

Q4
2014

Q1
2015

- 34%

2 021 MW

1 860 MWQ2
2014

2 021 MW

1 709 MWQ1
2014

1 522 MWQ4
2013

1 045 MWQ3
2013

639 MW

7 MW

191 MWplanned: 2 518 MW

Q2
2015

Q3
2015

of IPPs have reachedcommercial operation asscheduled1
REIPPs have consistently delivered capacity
according to schedule since the end of 2013,delivering critical generation capacity quickly
and generally on time.

Price trends2
- 19%

2.37

- 39%

1.56

The REIPPPP is delivering energy at increasingly costcompetitive rates

1.26

REIPPPP estimated3 price trends

0.77
R/kWh
BW 1

BW 2

BW 3

Energy weighted average (R/kWh) considering average technology RFP submission
price (published) for each bid window and the projected annual energy contribution /share per technology type.

BW 4

Note1. 40 IPPs have reached commercial operation date (COD) out of 48 that were planned by December 2015. Note 2. Contracted price (at which power is sold to Eskom) per IPP
was weighted with consideration of the technologies and their relative, projected annual energy contribution (P50) (in April 2015 terms); Note 3. Contracted price (at which poweris sold to Eskom) per IPP was weighted with consideration of the technologies and their relative, projected annual energy contribution (P50) (in April 2013 terms). BW 3 estimated10
rate incorporates the peak tariff (270% of base rate) applicable to CSP. BW 3.5 is not included as it is technology specific.

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The programme is effectively contributing tobroader development objectives in SA
Shareholding

Shareholding by Black South Africans across thecomplete supply chain (for the 63 projects in BW
1, 2 and 3)

30%

With 11% held by local communities

49%

111 %
of planned employment achieved
during construction (BW 1, 2 and 3)

local content
achieved inconstruction

local content reported as percentage ofTotal Project Value achieved during
construction

Even though BW 3 has only recently started construction, 11% more
direct employment opportunities for South African citizens reported(21 673 actual vs 19 523 planned job years) during construction thanoriginally projected by developers+ twice as many people from local communities employed by
IPPs during construction than was contractually required
Note1. For actual achievements only BW1, BW2 and BW3 data is reported – BW3.5, BW4 & BW1S2 have not completed financial close.

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Whilst securing equity for South Africans, the
REIPPPP has also attracted significant FDI into thecountry
For bid windows 1 – 4 and Small projects1

R53.4 billion out of R194.1 billion
from foreign investors and financiers acrossthe globe
i.e.:

27.5%

Foreign equity in the REIPPPP (BW1 – BW4 and 1S2) is R35.2 billion, equivalent to 56.2% of
the inward FDI attracted into South Africa during 2014 (R62.6 billion) and 155.8% of total
inward FDI in 2015 (R22.6 billion)2Note 1. Small projects bid window analysis included. Note 2. South African Reserve Bank (SARB). 2016. Quarterly Bulletin March 2016:40.
Pretoria: SARB.

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2015 and beyond

WHERE TO FROM HERE?

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Targeting 1 800 MW of co-generation linked toexisting industrial processes where electricity is
produced as a by-productCo-gen(1 800MW1)

800 MW
determined
Dec 2012 and
1 000 MWApr 2015

StatusNext Steps• RFP revised to facilitate an expedited procurement ofcogeneration capacity, allowing the first 4 bid windows
to run on a six weekly basis. Focus of first bid window on
existing plants with underutilised generation capacity tosell such potential capacity into the grid.

• To harness potential other Co-gen opportunities the DoE isin the process of considering a proposal to procure new Cogen plants at acceptable tariff levels (Greenfields
programme)• 4 July 2015 request for bids issued by the DoE for firstbid window (structured into 4 submission rounds)• Dec 2015 Co-gen Preferred Bidder for first submission
round (1a) announced• To enable procurement of different types of new
Co-gen facilities not aligned with the definition in
the current New Generation Regulations, the DoE
embarked on a process of amending the New
Generation Regulations and has completed a public
consultation process• The Promulgation of amended New Generation
Regulations (Amended Regulations under the ERA) is critical
for the roll out of the Co-gen programme.
• Subject to the approval of the New Gen Regulations, thesecond bid submission announcement is planned for Q3
2016/17• Subject to the approval of the New Gen Regulations, thethird bid submission phase is planned for Q3 2016/17.

1 800
MW target

Note 1. The ability to procure 1 800 MW of cogeneration capacity will depend on whether such generation options
can be procured at competitive prices.

BW 1a and 1b expected todeliver 15.6 MW

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Pursuing the development of gas as asustainable, alternative energy source
Gas topower(3 126 MW)

StatusNext Steps• Procurement framework developed. Structured into two
sub-programmes:

Taking Gas to Power forward(i) Domestic Gas Programme; and(ii) Imported Gas Programme.

• Release of the Preliminary Information Memoranda:- Q2 2016/17 | Release Imported Gas to Power RFQ- Q3 2016/17 | Release Domestic Gas RFP (CBM, UGC, etc.)• July 2015: Gas to power RFI received and analysed 173
complete responses• Facilitated the Gas Options conference, which drewsignificant support for and interest in South Africa’s Gas
Programme- Q4 2016/17 | Release Imported Gas to Power RFP- Q4 2016/17 | Obtain Environmental Authorisation for LNG
terminals (imported LNG) at three ports- Q1 2017/18 | Bid Submissions for Domestic Gas• Collaboration established with Transnet Corporate andTransnet Ports Authority (TNPA), CEF and PetroSA• IPP Office commissioned EIAs and undertook public
consultations in order to obtain environmental
authorisation for LNG terminal, and power project• Project development work is being done by DoE,
including procurement, siting and obtaining
authorisations

The Gas Programme will stimulate the gas
industry and gas infrastructuredevelopment within South Africa, requiring
new policy frameworks and legal andregulatory amendments

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Opportunities for coal IPPs have been
identified
Coal IPPPP(2 500 MW)

StatusNext Steps• Initial interest (June 2014) shown by 80 IPPs
including potential projects in Botswana,
Zimbabwe, Swaziland and Mozambique• Bid Window 1 Preferred bidder announcement• December 2014, first coal IPP bid window released
to market (domestic, single buyer PPA)• Strategic framework to guide the procurement ofcross border projects is under development–

planned for FY Q2 2016/17• Second Bid Window Bid Submission–

planned for FY Q3 2016/17 – 1 600MW• NOTE: Research as to cleaner technical solutions to
be done for future rounds of the coal programme• 2 Nov 2015 | First bid submission date. Received
two bids for combined capacity of 900 MW(submission delayed from August 2015 at request of
up to
the market)• The coal bids are currently under evaluation

2 500 MWby 2020

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The REIPPP is being expanded to unlock
more renewable energy opportunities
Renewable
Energy(13 225 MW)

StatusNext Steps• 11 November 2015 | Bid submissions for the expedited
window closed; receiving 106 bids. 1 800 MW available
for procurement• Q2 2016/17 bid announcement for expedited BW

Solar PV: 4 725 MW, Wind: 6 360 MW, CSP: 1 200 MW, Small Hydro: 195 MW, Landfill
Gas: 25 MW, Biomass: 210 MW, Biogas: 110 MW and Small Scale REIPPPP: 400 MW• RFP review in process incorporating extensive consultation(the dti, DWAS, DEA, NERSA and Eskom) to address market
feedback, monitoring results and DOE concerns• Q2 2016/17 release of revised RFP for bid window 5. Key
aspects of redesign include (i) definition of local
community, (ii) mechanisms to ensure early, efficient andequitable benefits to communities, and (iii) local content /industrialisation regime. (iv) refinancing provisions• Q3 2016/17 bid submission date for bid window 5

Small RE
(400MW)

FIRST - Small
RE Projects
Fund• BW 1S2: First BW Small REIPPPP divided in 2 bid cycles• Ten Preferred Bidders announced October 2015 from
BW 1S2 and 49 MW was procured of 400 MW
determined for Small REIPPPP• Facility for Investment in Renewables Small Transactions:
Fund being developed in conjunction with private financial
institutions and KfW.
• Fund developed independently from the DoE and isintended to provide funding to small, local, new RE
developers.

• Simplification of Small REIPPPP to provide for a lesscomplex and costly bidding process• Q2 2016/17: target date for second stage two (2S2),
seeking to procure 51 MW; Release of RFP for BW3• Q1 2016/17: Date for fund operation

Enabling
broaderparticipation

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Harnessing regional collaboration
through the cross border programme
Cross
Border
IPPPP

StatusNext Steps• Potential Cross Border Initiatives

Regional engagement framework being developed forSouth Africa’s collaborative role in regional capacity
building, investment and trade in energy:o Hydro:- The signed Grand Inga Treaty between SA andthe DRC effective March 2015
- Obliges SA to negotiate an off-take agreementfor 2 500 MW of hydroelectricity from the Inga
Hydro Projecto Coal:- A 3750 MW determination to be gazetted- Procurement of Coal IPPs in the region(Botswana, Swaziland, Zimbabwe & Zambia)
o Gas:- Significant opportunities for gas supply and gasto-power projects in Mozambiqueo Generation Projects:- Cross-border projects in Botswana to be
developed after inter-Government and interutility agreements signed ;- Capacity support for INGA PMUo Regional Transmission Networks:- Strategy formulation for development andexpansion of transmission infrastructure in
SADC
o Advisory and Capacity Development Activities- Structuring and Formalisationo Renewables:- sharing experiences (bilaterally and on demand)with African countries seeking to roll-out their
RE strategies

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Peaking IPPs helping to alleviate
electricity constraints
Peaking
IPPs(1 005 MW)

StatusNext Steps• The Dedisa OCGT Plant is located in the Coega
IDZ, Eastern Cape with 335 MW capacity• The Avon OCGT Plant is located near
Shakaskraal, Kwa-Zulu Natal with a capacity of
670 MW• Completed and generating electrical energy since
30 September 2015.

• To be completed by October 2016.

Potential toconvert to
CCGTs

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Key challenges• Alignment between generation and transmission planning– Alignment between generation and transmission planning and implementation
remains an issue requiring a variety of forward planning initiatives between thevarious role-players and making timely funding available for investment intransmission and distribution infrastructure.
IPP Office mapped all responses across IPP programmes against the existing grid andfuture grid planned, identified areas of constrained grid, and are seeking ways of
mitigating grid connectivity constraints (in consultation with Government and Eskom)

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IEEJ：2016年5月掲載 禁無断転載

THANK YOU

お問い合わせ: report@tky.ieej.or.jp

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