The South African Renewable Energy Independent Power Producer Procurement Programme: A Review and Lessons Learned

Abstract

The South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is a competitive tender process that was launched to facilitate private sector investment into grid-connected renewable energy (RE) generation. It has been an undisputed success in terms of capacity, investment and price outcomes. Since 2011 a total of 6,328 Megawatts of wind, solar PV and other RE generation capacity has been procured, amounting to USD 20.5 billion in investment. Bid tariffs have fallen sharply over the course of the programme and the most recently awarded projects are amongst the lowest priced grid-connected RE projects in the world. Considering South Africa's success in achieving more investment via Independent Power Producers (IPPs) in 4 years than in the rest of Sub-Saharan Africa over the past 25, the REIPPPP's design and management is likely to be of interest to policymakers in African (and other developing) countries. This paper thus provides a comprehensive review of the programme’s tender documentation, implementation, and outcomes to date. Together with supporting research, this analysis has been used to develop a set of high-level lessons intended to facilitate the roll out of similar RE IPP competitive tender programmes in other emerging markets.

Keywords

• South Africa
• Renewable energy
• Competitive tender
• Independent Power Producers