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Developers urged to prepare for fourth round

Don't wait for a government announcement, says the senior project adviser in the Private Public Partnership unit of the National Treasury. Get ready for round four bidding for the Renewable Energy Independent Power Producer Procurement Programme, because it will happen.breytenbach insideKaren Breytenbach - Senior Project Adviser in the Private Public Partnership unit of the National Treasury

Developers in the green energy sector can prepare to bid in the fourth round of the Department of Energy's Renewable Energy Independent Power Producer Procurement Programme, despite uncertainty about the bid opening date.

Following a successful third round, the department has allocated 1 000MW of renewable energy to bidders who passed Part B and scored well in pricing in round three, which is to close at the end of this month, according to Karen Breytenbach, the senior project adviser in the Private Public Partnership unit of the National Treasury. Part B of Bid Tender 3 spells out the qualification criteria for developers to be eligible bidders in the programme.

Addressing delegates at the second Renewable Energy Forum South Africa, which is sponsored by the Industrial Development Corporation, in Sandton on Wednesday, 4 March, Breytenbach said bidders should not wait for an official call from the government, but should "focus" on Tender 4.

"[Waiting] for the government for this year to take a decision on the 1 000MW is not the right thing. What we have realised is that it's difficult to take decisions in an election year. Although there hasn't been an official decision on the 1 000MW, I would encourage you as a personal encouragement to go and focus on Tender 4 and get ready," she said.

In October 2013, 17 preferred bids for almost 1 500MW of renewable energy projects were selected in the third bidding round for renewables. According to the Department of Energy, it received a considerable number of competitive bids for both onshore wind and photovoltaic sites in the third round of its green energy programme. Seven bidders were picked for 787MW of onshore wind farms, six for 450MW of photovoltaic parks, one for 16.5MW of biomass, one for 18MW of landfill gas and two for 200MW of concentrated solar power.

On closure of round three, Breytenbach said there would be R124-billion "of private sector money on the ground", an enormous amount of money that would make a big difference in many areas that were without electricity.

The Department of Energy would make some changes in certain areas in the fourth bidding round. To reduce costs incurred in submitting tender documents, the department would reduce the number of documents required, Breytenbach said. The rest would be photocopied by the department.

"We are also going to change the RFP [request for proposal] to make it less expensive for you to bid. We are looking at ways for bidders to submit their bids without going through sourcing support letters from banks."

Breytenbach assured developers that the programme would continue despite the current uncertainties regarding the fourth round. "We have got no intention whatsoever to stop this programme. Please take comfort from what I am saying; we will make all sorts of plans that we can to make sure that the renewable energy programme is continuing."

The Small Projects programme, which was allocated 100MW for developers to procure small projects utilising onshore wind, solar, photovoltaic, biomass, biogas and landfill gas, was going full steam ahead. The department was also mooting the idea to establish a fund for small projects, according to Breytenbach. The fund, a partnership with the German government-owned development bank KfW, would help the small projects "move forward". "KfW will make the funds available to the government on concessionary terms," she said.

A rooftop programme was also under way, said Breytenbach. It would be developed this year, a move that would benefit local manufacturers. "As the year progresses, we will be talking to you and you are welcome to share your ideas with us."

There was also an urgent need to come up with a programme that would help grow local developers, a proposal put on the table by the South African Renewable Energy Council and sector associations. Breytenbach said the programme would also have to take into consideration issues of economic development.

A gas utilisation master plan was being drawn up for South Africa, and the government had already done a regulatory review and research on "the supply side and the demand side". "The draft document addresses all this. The next step is to look at the infrastructure needed and the costs thereof, taking into consideration South Africa does not have gas resources right now."

The master plan would help upstream developers understand the needs of South Africa in case they discover gas reserves. "We hope to have a draft document ready for the government to distribute by the end of [this month]," said Breytenbach.

In addition, a co-generation project was in the pipeline. "While renewable continues to be our flagship, we are busy developing documents for the co-generation programme," she added.

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