RE: SA prepares to resume renewables procurement21 Feb 2020 15:39
In response, President Cyril Ramaphosa announced on February 13 that a series of steps would be taken to “significantly increase generation capacity outside of Eskom”, including a promise that a Section 34 Ministerial Determination would be issued to give effect to the IRP 2019.
The document, which was published in October, outlines that South Africa will procure 14 400 MW of new wind, 6 000 MW of new solar PV, 2 088 MW of energy storage, 2 500 MW of imported hydro, 3 000 MW of gas and 1 500 MW of new coal by 2030. It also caters for distributed generation, which is mostly expected to take the form of solar PV investments by businesses and households.
Besides the timelines for the Ministerial Determinations, the domestic IPP market is also eager to secure visibility of the new bid documentation, particularly given previous indications that these could set higher local-content and black- and community-empowerment thresholds.
The Irena report notes that renewable-energy auctions have become increasingly popular, owing chiefly to their ability to reveal competitive prices. It also states, however, that auctions are increasingly designed to help achieve specific national goals, beyond solely procuring electricity at the lowest price.
These goals include ramping up solar and wind power; integrating higher shares of those sources into the grid; ensuring greater participation by communities, small companies or new market entrants; and maximising the socioeconomic benefits of renewables, including job creation.
The agency notes that, while global prices for solar PV power continued their downward trend, the rate of decrease is slower, while onshore wind power showed a slightly higher average global auction price in 2018 compared to the year before.
In a separate presentation this week, S&P Global also highlighted the use of auctions, which had helped lower costs in 2019 for solar PV projects, with several sub-$20/MWh projects emerging.
Renewables additions, S&P Global said, continued to outpace fossil-fuel new builds, but the pace of growth would moderate as the renewables market matured. In 2019, nearly 200 GW of renewables capacity (including hydro) was added, as compared to only 100 GW of nuclear, coal, gas and oil capacity combined.
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