scholarly journals INVESTIGATING THE FINANCIAL CLOSE OF PROJECTS WITHIN THE SOUTH AFRICAN RENEWABLE ENERGY INDEPENDENT POWER PRODUCER PROCUREMENT PROGRAMME

Author(s):  
Ian Pieters ◽  
Marco Lotz ◽  
Alan Colin Brent
2016 ◽  
Vol 27 (4) ◽  
pp. 1 ◽  
Author(s):  
Anton Eberhard ◽  
Raine Naude

The South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is a competitive tender process that was launched to facilitate private sector investment into grid-connected renewable energy (RE) generation. It has been an undisputed success in terms of capacity, investment and price outcomes. Since 2011 a total of 6,328 Megawatts of wind, solar PV and other RE generation capacity has been procured, amounting to USD 20.5 billion in investment. Bid tariffs have fallen sharply over the course of the programme and the most recently awarded projects are amongst the lowest priced grid-connected RE projects in the world. Considering South Africa's success in achieving more investment via Independent Power Producers (IPPs) in 4 years than in the rest of Sub-Saharan Africa over the past 25, the REIPPPP's design and management is likely to be of interest to policymakers in African (and other developing) countries. This paper thus provides a comprehensive review of the programme’s tender documentation, implementation, and outcomes to date. Together with supporting research, this analysis has been used to develop a set of high-level lessons intended to facilitate the roll out of similar RE IPP competitive tender programmes in other emerging markets.  


Author(s):  
Christopher Ettmayr ◽  
Hendrik Lloyd

Background: Economies aim to grow over time, which usually implies the need for increased energy availability. Governments can use their procurement of energy to increase benefits in their economies via certain policy tools. One such tool is local content requirements (LCRs), where the purchase of goods prescribes that a certain value has to be sourced locally. The argument for this tool is that spending is localised and manufacturing, as well as job creation, can be stimulated because industry will need to establish in the host economy. However, this practice is distortionary in effect and does not create a fair playing ground for global trade. Furthermore, if the local content definition is weak, or open to manipulation, the goals of such a policy may not be achieved at all.Aim: The objective of this study was to determine how LCRs would ultimately impact on the overall procurement programme.Setting: This study took place as South Africa commenced with large scale development of the renewable energy sector. This was largely achieved via the State run Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).Method: This study utilised opinion-based surveys to look into the LCRs of South Africa’s REIPPPP and measure the impact of this policy on the renewable energy sector in general. The mixed method approach was utilised to analyse qualitative and quantitative data and this was then triangulated with an international peer group to arrive at certain conclusions. The Delphi Technique was then employed to achieve population consensus on the findings.Results and conclusion: It was found that, in order to implement a policy such as local content without any negative welfare effects, the host economy had to show certain pre-existing conditions. Because South Africa does not hold all supportive pre-conditions, the impact and effect of LCRs have not been optimal, and it has not been found to be a sustainable mechanism to continue using indefinitely. The pricing of renewable energy was also found to be higher due to local content and such pricing is passed on to the energy consumer. The welfare created for South Africa, which should be in a trade-off for the creation of jobs and manufacturing, is therefore diminished and coupled with unsustainability and potential manipulation of the system, the country does not seem to be benefitting as it should be from this specific application of a local content policy.


Author(s):  
Opeoluwa Akinradewo ◽  
Olusegun Oguntona ◽  
Clinton Aigbavboa ◽  
Wellington Thwala ◽  
Thandeka Monnanyana

Sign in / Sign up

Export Citation Format

Share Document