The South African Wind Energy Association (Sawea) wants international experts to help rescue the 23 wind generation projects that failed to achieve preferred bidder status in the sixth bidding window of the government’s Renewable Energy Independent Power Producer Procurement program ( reippp).

Bidders have collectively invested around R100m in these projects, only to be left out due to lack of connection capacity on Eskom’s transmission network in the Northern, Eastern and Western Cape.

Read: Significant opportunities in South Africa’s power and electricity sectors

This came as a surprise as they had relied on Eskom’s Generation Connection Capacity Assessment, which was published in March 2022 and indicated that there was sufficient capacity.

The first paragraph of the document reads: “The publication of the 2024 Transmission Grid Generation Connection Capacity Assessment (GCCA-2024) is to inform interested parties about the potential capacity available in the transmission grid of Eskom to facilitate the connection of generation projects”.

In what Eskom COO Jan Oberholzer said on Monday (January 23) admitted in an interview with Moneyweb editor Ryk van Niekerk at RSG Geldsake, there was a communication failure, the connection points were not reserved for bidders and the access data was not updated regularly either.

Meanwhile, projects aimed at power generation for private clients occupied all available capacity and outbid bidders in the public contracting process.

This resulted in only five solar projects, with just 860MW of combined generating capacity, being announced as preferred bidders.

This after President Cyril Ramaphosa, as part of his energy emergency plan, in July last year increased the initial bidding round from 2,400MW to 4,200MW in an effort to add generation capacity to the grid to address the reduction of load.

Failure

Peter Attard-Montalto, who leads Political Economy, Markets and Just Energy Transition at Intellidex, wrote on his i-Blog: “The late 2022 failure of REIPPP bid window 6 means plans are now 3GW. below what we would otherwise have.” it should be, with window 7 offerings also looking deeply problematic. Substantially ending load shedding by the end of 2024 that last year seemed possible, though difficult, is now impossible.”

According to Eskom, all the available connection capacity in the three Cape provinces has been consumed, which would mean the waste of the total investment in these projects. They were placed where the wind resources are best and cannot be moved to other places.

Niveshen Govender, CEO of Sawea, says the industry is requesting the appointment of a consultant with experience in managing restricted grids to advise Eskom on ways to integrate these projects into the grid.

He points out that the countries of Scandinavia as well as Australia and the US state of California have faced the same challenge and South Africa can learn from them. “The hardest thing will be getting Eskom to agree and share the information.”

Govender adds that the industry is prepared to bear the cost. If Eskom agrees, it can be done within six months, she says.

time is of the essence

The schedule is important, because the authorizations for the 23 projects, including the environmental approval, are only valid for one more year. Thereafter they expire and the time and money spent will have been wasted.

Possible solutions include sharing the network between solar and wind projects.

“Solar energy is generated during the day and wind generation is mainly at night. Internationally it was found that there is only a 7% overlap,” says Govender.

“It is complex to manage a network like this, but not impossible,” he adds.

Govender says connecting to the distribution network instead of transmission is also worth looking into. “Germany has overcome the limitations in its transmission grid with rooftop solar power.”

Read: SA power lifeline frays as Eskom battles for diesel

Sawea also wants to establish where the funds will come from for the R72 billion investment in the transmission network over the next five years, which is required according to Eskom.

In this regard, Attard-Montalto writes: “The tender window 6 debacle further highlights that we are not paying enough attention to transmission, and that the required R72bn of transmission investment is unlikely to be achieved in the next five years. This creates a hole in the ability to get enough power on the grid in 2024-2027, which again pushes the end of load shedding even further.”

Govender says that to avoid a repeat of the impact of Bid Window 6, Eskom’s queuing system for network access must be fair and transparent.

“Currently no one knows how it works.”

Projects earmarked for private contracting should not be allowed to outnumber those for public contracting, he says.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *