Six solar PV projects, with a combined capacity of 1 290 MW, have been named as preferred bidders following the seventh bid window (BW7) of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

All the projects are located in the Free State province and achieved competitive bid prices of between R499.99/MWh and R514.06/MWh.

The bidding round, which was launched in December 2023 and had the bid submission deadline postponed to August 2024 from an initial deadline of the end of April, had an overall allocation of 5 000 MW, divided between solar PV (1 800 MW) and onshore wind (3 200 MW).

The solar PV allocation was substantially oversubscribed, with a total of 40 projects submitted, representing a combined capacity of 8 526 MW.

However, only eight onshore wind projects with a combined capacity of 1 692 MW were submitted; an outcome that was attributed to prevailing grid constraints and restrictive grid-access rules. These grid-related constraints came to the fore during BW6 in 2022, when none of the 23 wind projects vying for 3 200 MW advanced to the preferred-bidder stage.

The imbalance in the bid response led to a reallocation of capacity to solar PV from wind for the round, where winning bidders would secure 20-year power purchase agreements and their electricity would be bought by Eskom.

On July 22, the Department of Electricity and Energy (DEE) named the following six projects as preferred bidders:

• The 180 MW Dwaalboom 3 Solar project, being advanced by Red Rocket South Africa together with black-empowerment partners MBY Energy and Jade-Sky Energy, with a price of R499.99/MWh;
• The 210 MW Virginia 4 Solar Park, also being pursued by Red Rocket South Africa together with black-empowerment partners MBY Energy and Jade-Sky Energy, with a price of R504.87/MWh;
• The 200 MW Florida Solar Park, again being advanced by Red Rocket South Africa together with black-empowerment partners MBY Energy and Jade-Sky Energy, with a price of R506.89/MWh;
• The 240 MW Oslaagte Solar 2, being pursued by Scatec Solar Africa together with black-empowerment partners Greenstreet and Redstreet SPV, with a price of R509.02/MWh;
• The 240 MW Oslaagte Solar 3, also being pursued by Scatec Solar Africa together with black-empowerment partners Greenstreet and Redstreet SPV, and also with a price of R509.02/MWh; and
• The 220 MW Leeuwspruit Solar 1, again being advanced by Scatec Solar Africa together with black-empowerment partners Greenstreet and Redstreet SPV, with a price of R514.06/MWh.

The department said it had appointed a further eight compliant preferred bidders, subject to value for money negotiations. No timeframe was provided for the conclusion of these talks.

“Further announcements will be made in this regard once these processes have been concluded.”

The identities of the further eight projects were also not disclosed, but the DEE confirmed that four were wind projects and the other four were solar PV, which could proceed on the basis of capacity having been re-allocated to solar PV from wind during BW7.

Meanwhile, Scatec confirmed in a statement that it had been awarded preferred bidder status for a total of 846 MW of solar PV in what it called “the Kroonstad PV Cluster”, while also providing higher capacity values for the three projects than announced by the department.

It said Oslaagte Solar 2 and Oslaagte Solar 3 would have a capacity of 293 MW apiece, while Leeuwspruit Solar would have a 260 MW capacity.

Scatec also announced that the estimated total project cost for the solar cluster project was R13-billion and that the projects would be financed with up to 90% non-recourse project debt and the remaining by equity from the owners.

Scatec will own 50.90% of the equity in the project with Stanlib’s infrastructure fund, through its renewable energy platform Greenstreet, along with Redstreet, owning 46.50% and a Community Trust holding 2.6%.

“The Kroonstad PV Cluster represents a significant addition to Scatec’s growing renewable energy footprint in sub-Saharan Africa,” Scatec CEO Terje Pilskog said in a statement, noting that it was the company’s largest megawatt award in South Africa to date.

“We are now looking forward to reaching financial close and starting construction of the PV cluster during 2026,” added executive VP and GM for sub-Saharan Africa Alberto Gambacorta.

Scatec will provide engineering, procurement, and construction, operations and maintenance, and asset management services to the projects.

Financial close is expected in 2026, the company added.