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Independent Power Producer Procurement Programme

The Solar Parks Project

In the determination, the Minister intends to direct the Department of Energy to design and implement a procurement process for the appointment of one or more strategic partners (the “Strategic Partner(s)”) for development, financing, construction, operation and maintenance of one or more solar parks located in the Northern Cape (collectively “the Project”). The Department has provisionally identified three potential locations in the Northern Cape for the development of the Project.

The Department wishes to promote the establishment of solar technology manufacturing at one or more appropriate sites within the Northern Cape. The Strategic Partner(s) will be required to facilitate the establishment of solar technology manufacturing facilities located at one or more suitable sites in the Northern Cape, where the initial ‘anchor’ customer for such components will be the Project.

The process to identify the Strategic Partner(s) will commence with the invitation for interested parties to respond to the expression of interest (“the EOI”). The opportunity to submit a formal submission will remain open until 20 June 2016.

Any interested party that may wish to submit a response to a request for proposals are requested to submit a response to this EOI, however, submission of an EOI response is not compulsory.

Milestones

Expression of Interest

Solar Parks EOI – EOI Submission 20 Jun 2016

About the Solar Parks Project

The Minister has indicated in the three existing renewable energy determinations that new generation capacity is necessary to ensure the continued uninterrupted supply of electricity. The Minister initially determined, in the first determination, that 3 725MW, to be generated from Renewable Energy sources, is required. Subsequently, in the second determination the Minister determined that a further 3 200 MW, to be generated from Renewable Energy sources, is required. In the Third Determination, the Minister determined that a further 6 300 MW, to be generated from Renewable Energy sources, is required. This is broadly in accordance with the capacity allocated to Renewable Energy generation in IRP 2010.

The Government has developed, or is intending to develop in the future, various procurement processes in order to procure the Renewable Energy target required by South Africa, namely the REIPP Procurement Programme, the Small Projects IPP Procurement Programme and any other procurement programme as determined by the Minister from time to time.

The Minister now intends to issue a further determination, the solar parks determination, for new Renewable Energy generation capacity from Solar Technologies which is needed to contribute towards energy security in the amount of 1 500MW which represents the capacity allocated to “Solar PV”, under the heading “New Build”, for the years 2026 to 2028 in Table 3 of the IRP 2010-2030.

Notwithstanding the capacity allocation is for solar photovoltaic technologies, it is the intention of the Minister in her new determination to include any solar technology, including energy storage solutions. In addition, it is intended that the Project Sites shall be located in the Northern Cape.

A secondary objective of the REIPP Procurement Programme, beyond contributing to energy security, has been to enable the establishment of a Renewable Energy industry in South Africa, including manufacturing. From recent research conducted by the IPP Office, in conjunction with the Department of Trade and Industry and the Department of Science and Technology’s Technology Localisation Implementation Unit, it has been recognised that to-date that greater levels of manufacturing in South Africa could have been achieved through targeted interventions.

Accordingly, through the solar parks determination, the Department aims to use Government’s various policy instruments to enable and to facilitate the targeted establishment of Solar Technology component manufacturing facilities located in the Northern Cape and, in so doing, to create sustainable employment opportunities for the people of the Northern Cape, and in particular the youth.

Through the EOI the Department intends to determine the private sector interest seeking appointment as either the strategic partner or one of the strategic partners to partner with one or more State-owned company/ies to implement the project. The role of the Strategic Partner(s) will be to provide the necessary technical and financial support for the development and implementation of the Project, and to build capacity within and transfer skills to the State-owned company/ies. Such support may include, inter alia, assistance with the development of the associated grid infrastructure downstream of the power generation facilities and the identification and establishment of solar technology component manufacturing opportunities for the supply of such components to the projects and to third party projects.