South Africa seeks bids for continent’s largest renewable energy procurement

27 April 2023

South Africa has issued its first ever request for proposal (RFP) for 3,740 megawatts of renewable energy.

The move is its attempt to modernise energy distribution, and comes after years of energy instability that results in daily but unpredictable power cuts. It also comes as Eskom, South Africa’s state energy utility, suffers from severe capacity constraints.

Ageing coal power plants have forced Eskom to enact 'load-shedding' – a way of distributing demand for electrical power across multiple power sources – after the severity of energy cuts this year escalated to a higher level than in 2022.

It means the energy provider has been forced to remove 6,000 megawatts of power from the grid in order to prevent the system overloading.

The renewables energy tender invites partners for the biggest programme of its kind in Africa, and was released under the Integrated Renewable Energy and Resource Efficiency Programme (IREREP).

Minister of public works and infrastructure, Sihle Zikalala, said the RFP comes at an “opportune moment,” because of the South African government’s “steadfast” commitment to alleviating power supply challenges.

Zikalala added the procurement of energy could reduce load-shedding by three or four stages.

Potential benefits from the IREREP include R$1.3tn (£57.2bn) being added to South Africa’s GDP; the creation of more than 13,100 small businesses; a reduction in energy use intensity of between 22% and 45% in the public sector; and a reduction in CO2 and other greenhouse gas emissions by over 54.5 megatons.

Zikalala said: “We must usher in a new era of delivering projects on-time and within budget. Our projects must also be of good quality.”

He added that it was important that South Africa must not be associated with poor infrastructure delivery and spending.

He said: "We intend to move swiftly in responding to project delays and implementing interventions to remove obstacles hindering infrastructure delivery in South Africa.”

Efforts to improve energy security and increase capacity have increasingly focused on turning to private energy providers for support. The department of public works and infrastructure recently issued a strategy for enabling just this.

In January, Cape Town announced it would grant cash payouts to businesses that feed surplus electricity back into the grid.

IREREP is the official national Programme for Resource Efficiencies and Renewable Energy for Government facilities. Its aim is to meet sustainability targets of the government and South Africa at large. It aims to procure, from private sector energy service companies, renewable energy solutions.

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