The government is targeting 1470 MW from wind energy projects, 400 MW from concentrated solar power and 1075 MW from photovoltaic projects, Energy Minister Dipuo Peters said.

South Africa is in line to receive R47bn of investment in renewable power generation through the Independent Power Producers (IPP) procurement programme.

The Department of Energy said yesterday it would open a new round of bidding for alternative energy projects that should add an additional 3200MW of power to the national grid by 2020.

The government is targeting 1470MW from onshore wind projects, 400MW from concentrated solar power and 1075MW from photovoltaic projects, Energy Minister Dipuo Peters said. Biomass and biogas projects should each generate 47.5MW, small hydropower projects 60MW and other small projects 100MW, she said. “The South African government is committed to renewable energy as part of our energy mix,” said Peters.

Last week the Development Bank of Southern Africa (DBSA) announced the approval of loans amounting to R9.6 Billion for 14 renewable energy projects in South Africa, with a combined capacity of 896.5MW.

The country is expanding electricity supply after state-run Eskom, which generates most of its power from coal, suffered shortages in 2008, leading to mine closures. Besides increasing the supply of renewable energy, the government wants to produce 2500MW more energy from coal, 2609MW from hydropower by 2024 and 2562MW of extra gas power by 2025.

The power supply programme has been approved by the National Energy Regulator and the necessary government directives would be published by year-end, Peters said.

The government approved 28 wind, solar and hydropower projects costing R47bn last December and 19 proposals valued at R73bn in May, while a third bidding round is set to be concluded in May, 2013.

Companies selected to supply 1275MW of power in the first round have concluded financing arrangements, which were stalled by delays in obtaining government approval, Peters said. The funding arrangements were supposed to be completed by June 30.

The bidding process “introduced a whole new procurement framework,” she said. “On behalf of government, allow me to apologise for the delays. I am confident that going forward the process will be much smoother.”

She said signing of the agreements with the 28 preferred bidders would be on November 5 and that it was happy with its internal assessment regarding the nuclear power plant. The investment from IPPs will create job opportunities for a number of South Africans, especially in rural areas where these renewable power plants are located.

“Further, I am pleased to announce that the department obtained the necessary approvals under the Public Finance Management Act to enter into the long term agreement with the selected IPPs under the IPP Procurement Programme.” Some of the agreements would run for 20 years.

“All Window One preferred bidders have been requested to prepare for the signing of the contractual documents. All those who have reached this milestone of financial close are expected to honour the commitments made in their bids, and failure to do so will result in the application of the concomitant penalties as stated in the agreements.

“Among these penalties is the termination of the power purchase agreement if the bidder fails to act in line with the agreements,” Peters said.

“In order to avoid the necessity to act so harshly, I ask all those who have walked this onerous road to honour their commitments and bring the economic, social and environmental developments that are necessary for South Africa’s energy security and development and growth.”

Peters said that the South African government was committed to renewable energy as part of the national energy mix and would continue to implement the renewable programme in accordance with the Integrated Resource Plan 2010-30.