AFRICAN INDEPENDENT POWER PRODUCERS PROCUREMENT PROGRAMME 23 - PowerPoint PPT Presentation

BRIEFING ON THE SOUTH AFRICAN INDEPENDENT POWER PRODUCERS PROCUREMENT PROGRAMME 23 August 2016

CONTENT • – Integrated Resources Plan Non-Renewable • • Procurement Programme Overview Cogen • • Progress to date Coal – • Renewable Gas • • Large Peakers • – Smalls Regional Cooperation • – Solar Parks Advisory • • Solar Water Heaters Grid • Planning, Legislative and Regulatory Programme • Economic Development

INTEGRATED RESOURCE PLAN (IRP)

IRP AND DETERMINATIONS New build options Import hydro Gas – CCGT Peak – OCGT Coal Nuclear Wind CSP Solar PV MW MW MW MW MW MW MW MW 2010 0 0 0 0 0 0 0 0 2011 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 300 2012 2013 0 0 0 0 0 0 0 300 2014 500 0 0 0 0 400 0 300 2015 500 0 0 0 0 400 0 300 2016 0 0 0 0 0 400 100 300 0 0 0 0 0 400 100 300 2017 2018 0 0 0 0 0 400 100 300 2019 250 0 0 237 0 400 100 300 2020 250 0 0 237 0 400 100 300 2021 250 0 0 237 0 400 100 300 250 0 1 143 0 805 400 100 300 2022 2023 250 1 600 1 183 0 805 400 100 300 2024 250 1 600 283 0 0 800 100 300 2025 250 1 600 0 0 805 1 600 100 1 000 2026 1 000 1 600 0 0 0 400 0 500 250 0 0 0 0 1 600 0 500 2027 2028 1 000 1 600 0 474 690 0 0 500 2029 250 1 600 0 237 805 0 0 1 000 2030 1 000 0 0 948 0 0 0 1 000 Total 6 250 9 600 2 609 2 370 3 910 8 400 1 000 8 400 RE First Determination: 3725 MW Aug 2011 Nuclear Determination: 9600 MW Dec 2015 RE Second Determination: 3200 MW Dec 2012 Coal Determination: 2500 MW Dec 2012 RE Third Determination: 6300 MW Apr 2015 Imported Hydro Determination: 2 609 MW Dec 2012 Coal from Cross Border: 3750 MW Apr 2016 Gas Determination: 3126 MW Aug 2015

IRP Policy Adjusted IRP Total additional capacity (without committed until 2030 in GW) 6.3 GW 6.3 GW 2.6 GW 17.8 GW 9.6 GW

DETERMINATIONS Aug 2011 REIPPPP Dec 2012 Renewables - 17 334 MW Apr 2015 Hydro Dec 2012 Parks Solar May 2016 Peakers May 2012 Non-Renewables - 11 546 MW Dec 2012 - Domestic Coal Apr 2016 - Cross Border Dec 2012 Cogen Apr 2015 Dec 2012 - Gas to Power Gas May 2016 - Strategic Partner

PROCUREMENT PROGRAMME OVERVIEW

IPP PROCUREMENT PROGRAMMES Large programme – implemented in different phases o Renewable Energy (12 825 MW) (13 225 MW) Small programme – Implemented in different phases (400 MW) o o Coal Programme The programme will be implemented in two phases. Phase 1 with 900 MW (2 500 MW) Phase one – brownfield projects Cogeneration o Phase two – greenfield project o (1800 MW) o Preliminary Information Memorandum* Gas to Power o Request for pre- qualification (3 126 MW) o Request for proposals * Not procurement but information

IPP PROCUREMENT PROGRAMMES Cross Border Coal o The programme will be implemented across a number of phases and countries (3 750 MW) o Increased local content, and promote industrialisation in the Solar Park Northern Cape o Sustainable jobs, youth development, BBBEE and SMMEs (1 500 MW development o The programme is envisaged to be the procurement of a Gas Strategic Partner Strategic Partner for the development and implementation of (600 MW) a 600 MW gas fired power generation project o Repair and Replacement of the installed Solar Water Heaters Solar Water Heaters o Supported by the IPPs and other partners Replace and Repair o Youth Programme with the objective to develop and empower Programme youths.

Progress to date RENEWABLE ENERGY PROCUREMENT PROGRAMME

OVERVIEW OF LARGE REIPPPP BID WINDOWS To date there have been 6 Bid Windows (BW) of the Large REIPPPP… BW 1 BW 2 BW 3 BW 3.5 BW 4 BW Exp • Submission date: • Submission date: • Submission date: • Submission date: • Submission date: • Submission date: 4 November 2011 5 March 2012 19 August 2013 31 March 2014 18 August 2014 11 November 2015 • 28 preferred • 19 preferred • 17 preferred • 2 preferred • 26 preferred • Evaluation bidders bidders bidders bidders bidders (Announced 6 (Announced 21 (Announced 29 (Announced 15 delayed due to Dec 2011) May 2012) Oct 2013) Dec 2014) Eskom MYPD3 • 2 205 MW of discussions contracted • 1 425 MW of • 1 040 MW of • 1 457 MW of • 200 MW CSP capacity • 106 Bids contracted contracted contracted contracted (announced 13 capacity capacity capacity capacity preferred bidders submitted on 16 April 2015 • Signature of the • Signature of the • Signature of the • Signature of the • 1 800MW • 13 additional Agreements - 5 Agreements - 9 Agreements - Agreements - available for November 2012 May 2013 From 11 expected Q2 bidders were procurement December 2014 2016/17 (One announced on 7 project signed , June 2015 • All achieved COD • 16 projects • Announcement second one to be • BM project FC (1415MW)1 achieved COD FY Q2 2016/17 signed 23 Aug 16) • FC planned from (804MW) delayed due to fuel supply Q2 2016/17) agreement Eskom change in dispute Tariff policy needs to be resolved)

LARGE REIPPPP 3 Determinations: Renewable REIPPP Large 3 725 MW in Aug 2011 Energy 3 200 MW in Dec 2012 (12 852 MW) (13 225 MW) 6 300 MW in Aug 2015 Status Next Steps • • BW3.5 (200 MW CSP) - Kathu Solar Park BW 3.5 Red Stone Project (100 MW) Financial (100 MW) reached Financial Close on 12 Close in Q2 2016/17 May 2016 – FC delayed due to delays in issuing of BQs and – Eskom underestimating the Generation values presented to the IFC (had to obtain an amended approval in June 2016) • • BW 4 (2 205 MW) Contract Finalisation . BW4 Financial Close planned for Q2-Q3 2016/17 subject to Financial Close will be staggered – budget quotations being issued on time. – Increase in time and cost between CEL and BQ resolved • Expedited BW (1 800 MW) Bid Submissions • Expedited BW Bid Announcement in Q2 2016/17. 1 800 MW with an option to increase was on 11 Nov 2015; received 106 bids. to 2 773 MW. Evaluations complete . Await BAC recommendation.

LARGE REIPPPP 3 Determinations: Renewable REIPPP Large 3 725 MW in Aug 2011 Energy 3 200 MW in Dec 2012 (12 852 MW) (13 225 MW) 6 300 MW in Aug 2015 Status Next Steps • BW5 RFP review in process incorporating • BW 5 release of revised RFP in Q3 2016/17 . extensive consultation (the dti, DWAS, DEA, NERSA and Eskom) to address market • Key aspects of redesign include: feedback, monitoring results and DOE concerns – definition of local community, – mechanisms to ensure early, efficient and equitable benefits to communities, and – local content / industrialisation regime. (iv) refinancing provisions

REIPPPP MONITORING • IPPs are required to submit report on quarterly basis on job creation, local content, management control, preferential procurement, enterprise development and SED • The team also do spot checks to verify certain information. Each IPP project is required to keep all the supporting documents on site. • Transaction Advisors were hired to conduct independent audit at the end of construction period. • IPPs found to be non-compliant incur termination point and further given an opportunity to provide a ratification plan. • Termination points can be levied against IPP if achievements in one element breach specific lower threshold repeatedly, or in several elements in the same quarter • There is continuous improvement in monitoring due to learnings from the first projects. • Ongoing engagement with Universities and local government improve the social impact of the programme

OVERVIEW OF SMALL REIPPPP BID WINDOWS To date there have been 4 Bid Windows (BW) of the Small REIPPPP… Second Stage Second Stage First Stage One First Stage Two One Two • Submission date: 14 • Submission date: 3 • Submission date: 31 • Submission date: Q2 October 2013 November 2014 March 2014 2016/17 - currently under evaluation • 78 recommended • 10 preferred bidders • 26 recommended • 51 MW allocated to bid bidders passed the (Announced 4 Oct bidders passed the First Stage 1 2015) First Stage 1 window. qualification round qualification round (awarded February (awarded February • 49 MW of contracted • Announcement of 2014) 2015) capacity preferred bidders to be in Q3 2016/17 • Signature of the Agreements - Q2 2016/17 • Earliest COD expected in Q3 2017/18

SMALL REIPPPP REIPPP Small 3 Determinations: Renewable (400 MW) 3 725 MW in Aug 2011 Energy 3 200 MW in Dec 2012 Small Projects less (13 225 MW) 6 300 MW in Aug 2015 than 5 MW Status Next Steps • • BW First Stage Two (1S2) (49 MW). Ten FLC to consider Sec 66/70 application in Preferred Bidders announced in October August 2016 2015. • 2S2 Bid Announcement planned for Q3 • BW Second Stage Two (2S2) (51 MW). 20 2016/17 bids received on 14 June 2016 is under evaluation • • Simplification of Small REIPPPP bid BW 3 (100 MW) RFP being drafted documents to provide for a less complex process: – Create opportunities for BEE, BBBEE – Release of RFP in Q3 2016/16