S.Africa confident green energy bidding to succeed

South Africa is confident that a recently launched bidding process for renewable energy will lead to the addition of 3,725 megawatts (MW)of green energy to the national grid by 2016, despite previous delays, a senior government official said.

Africa's biggest economy has been struggling to meet fast-rising demand for electricity in the world's top producer of platinum. A power supply crisis in 2008 shut mines down for days and cost the country billions of dollars in lost output.

South Africa has also been under pressure to reduce its carbon footprint, with more than 90 percent of its power currently supplied by coal-fired plants.

But the process of adding more renewable power to the grid has dragged on for years, raising doubts about the government's ability to deliver on this front.

A plan to attract independent producers of renewable energy with subsidised tariffs was scrapped in the face of legal challenges, and regulatory hurdles have also been in the way.

Under the new procurement plan, which does not include subsidies, some 320 developers from South Africa, Europe, North America and Asia have expressed interest to date, and the government is confident the ambitious plan will now succeed.

We see the process is still on track. As much as we have seen who is bidding and how much work needs to be done, we are convinced that this will be done on time, said Nelisiwe Magubane, the director general at the department of energy on Wednesday.

The 3,725 MW would be added to an existing national supply of around 41,000 megawatts.

More than 800 participants crammed into a conference hall on Wednesday to get more information about the rigorous tender process, which was launched in August.

Developers have up to November 4 to submit their bids. The preferred bidders will be announced during the global climate change conference held in South Africa in November/December.

Magubane said the bid papers were drafted with the help of external consultants to ensure they were financially sound.

Most lenders have said ... that this is something they can lend money for, she said.

We've no experience of procurement of this magnitude and need to make sure that there is adequate skill and that the process is infallible.

South African state-owned power utility Eskom , which so far has held a monopoly on power generation in the country, will provide successful bidders access to the grid and will be the counterparty for power purchase deals until a planned independent authority has been established.

South Africa expects nuclear and renewable energy to play a more crucial role in plugging its power supply deficit as it seeks to halve its reliance on dirtier coal-fired plants.

According to a new energy masterplan, South Africa plans to develop 9,600 MW of nuclear power and 17,800 MW of renewable power between now and 2030.