Renewable Energy IPP Procurement Programme Update

Briefing to Parliamentary Portfolio Committee

April 2012

Slide 1

Introduction• The Minister determined, in consultation with NERSA, that New Generation

Capacity is required in accordance with the IRP2010.

• The determination provides for procurement of 3725MW across different technologies (inclusive of 100 MW Small Projects).

• Procurement documents were prepared and approved by the DG to procure power from the private sector. (save for the 100 MW Small Projects)

• The procurement documents were released on the 03 of August 2011 and compulsory bidders conference for the first and second window, was on the 14 of September 2011.

• 53 Bids were received by the 4th of November and evaluation was conducted in a secure environment at Gallagher Convention Centre between the 4th November and 28th November 2011.

• All evaluation rooms were under 24 hours voice and visual recordings, all the records are with DoE security for future reference.

Procurement documents

Procurement Process Background

To be concluded in Phase 1

To be concluded in Phase 1

Request for Proposal (RFP)

Procurement Process Background

OVERVIEW OF EVALUATION PROCESS.

5

General Evaluation Observations

• Comprehensive evaluation template developed in accordance with the RFP prior to accessing the evaluation venue.

• Comprehensive training of all evaluators in all different disciplines in the use of the template.

• Moderation of all evaluators work by independent evaluators.

• Cross moderation in respect of finance.

Evaluation team:

• International reviewers• Legal review – Linklaters (UK)• Technical review – Tony Wheeler

Consulting (UK)• Financial review – cross-moderation

between the two Financial Advisor firms• Governance review – Ernst & Young

• Legal evaluation team• Bowman Gilfillan, • Edward Nathan Sonnebergs, • Ledwaba Mazwai• Webber Wentzel

• Technical evaluation team• Matt Macdonald

• Financial evaluation team• Ernst & Young• PWC

• International reviewers• Legal review – Linklaters (UK)• Technical review – Tony Wheeler

Consulting (UK)• Financial review – cross-moderation

between the two Financial Advisor firms• Governance review – Ernst & Young

• Legal evaluation team• Bowman Gilfillan, • Edward Nathan Sonnebergs, • Ledwaba Mazwai• Webber Wentzel

• Technical evaluation team• Matt Macdonald

• Financial evaluation team• Ernst & Young• PWC

Evaluation Streams:

• Environment• Land right• Application for land use• Municipal land – rights• Own Build – right over land

• Land• Notarial lease registration• Proof of land use application

• Commercial legal• Acceptance of the PPA• Project structure

• Economic Development• Contributor status level• Compliance with threshold

• Financial• Full and partial price indexation

• Technical• Eligibility• Energy resource

• Environment• Land right• Application for land use• Municipal land – rights• Own Build – right over land

• Land• Notarial lease registration• Proof of land use application

• Commercial legal• Acceptance of the PPA• Project structure

• Economic Development• Contributor status level• Compliance with threshold

• Financial• Full and partial price indexation

• Technical• Eligibility• Energy resource

Evaluation Composition

OVERALL RECOMMENDATIONS(PHASE 1)

8

Recommended Preferred Bidders(Technology allocations)

9

 

Allocation to Preferred Bidders: Window 1

Allocation per Determination Still Available

MW allocation per

Determination

  MWPercentag

e MW PercentageSolar PV 631.53 43.6% 818.47 56.4% 1450.00Solar CSP 150.00 75.0% 50.00 25.0% 200.00Wind 633.99 34.3% 1216.01 65.7% 1850.00Biomass 0.00 0.0% 12.50 100.0% 12.50Biogas 0.00 0.0% 12.50 100.0% 12.50Landfill gas 0.00 0.0% 25.00 100.0% 25.00Small Hydro 0.00 0.0% 75.00 100.0% 75.00Total MW 1415.52 39.0% 2209.48 61.0% 3625.00           Total Capacity - Bids Received 2127.66        Percentage Preferred Bidders 66.5%        

Number of Passing Bids 28        

Recommended Preferred Bidders – PV

10

Project_Name Capacity (MW)

1 SlimSun Swartland Solar Park 5.002 RustMo1 Solar Farm 6.763 Mulilo Renewable Energy Solar PV De Aar 9.654 Konkoonsies Solar 9.655 Aries Solar 9.656 Greefspan PV Power Plant 10.007 Herbert PV Power Plant 19.908 Mulilo Renewable Energy Solar PV Prieska 19.939 Soutpan Solar Park 28.0010 Witkop Solar Park 30.00

Recommended Preferred Bidders –PV

11

Project_NameCapacity

(MW)

11 Touwsrivier Project 36.0012 De Aar Solar PV 48.2513 SA Mainstream Renewable Power Droogfontein 48.2514 Letsatsi Power Company 64.0015 Lesedi Power Company 64.0016 Kalkbult 72.5017 Kathu Solar Energy Facility 75.0018 Solar Capital De Aar (Pty) Ltd 75.00

No. of Preferred Bidders for Solar Photovoltaic: 18 631.53

12

Project_NameCapacity

(MW)

1 Dassiesklip Wind Energy Facility 26.192 MetroWind Van Stadens Wind Farm 26.193 Hopefield Wind Farm 65.404 Noblesfontein 72.755 Red Cap Kouga Wind Farm - Oyster Bay 77.606 Dorper Wind Farm 97.007 Jeffreys Bay 133.868 Cookhouse Wind Farm 135.00No. of Preferred Bidders for Wind: 8 633.99

Recommended Preferred Bidders – Wind

13

Project_NameCapacity

(MW)

1 Khi Solar One 50.002 KaXu Solar One 100.00No. of Preferred Bidders for Solar CSP: 2 150.00

Recommended Preferred Bidders – CSP

Findings of independent review teams• Independent legal review

“appropriate process was undertaken to ensure a consistent approach”

• Independent technical review

“TWC is also satisfied that the technical evaluation has been undertaken in accordance with the agreed methodology”

•Financial cross-moderation

The final results from the financial team reflects the cross-moderation between financial firms.

• Governance review

“we did not observe evidence of breaches in governance with impact on the validity of the overall process recommendations”

Thank You

15