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SA Government confirms inclusion of price competition in first renewables round

The South African government has confirmed that price competition will feature in the procurement process for the first round of renewable energy projects, with the 2009 renewable energy feed-in tariffs (Refit) to be use as a “ceiling” price against which potential developers should tender their offers.
EngineeringNews online reports that Department of Energy (DoE) director-general Nelisiwe Magubane informed them on Monday that Energy Minister Dipuo Peters had signed off on the bid documentation, and that the only outstanding matter was confirmation from the National Energy Regulator of South Africa (Nersa) that it concurred with the determination.

Once that concurrence was gained, the department and the National Treasury would officially release the tender, along with the selection criteria, which would include a pricing dimension. Other criteria likely to be included could be project technical viability, localisation, job creation, grid connectivity, environmental acceptability and local economic development spinoffs.

Potential wind and solar developers have objected to suggestions, which emerged over the last few months, that the Refit would be abandoned in favour of a process that includes an element of price competition on the basis of the fact that projects had been premised on the 2009 promulgated rates.

However, Magubane said that the enthusiastic response to its September 2010 request for information (RFI), during which projects representing a total of 20 000 MW were proposed, had indicated that there was scope for some price competition in the first round for 1 025 MW of renewable projects.

Additional information: Full story at EngineeringNews
News date: 04/07/2011

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