The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is a government programme aimed at increasing the country’s electricity generation through private sector investment in renewable energy. The IPP office oversees the procurement of electricity from renewable energy projects through a bidding process. On Thursday, 15 September, the government, Eskom and the French multinational Électricité de France (EDF), signed new agreements for the development of three 140 MW wind energy projects from Bid window 5, to the tune of R11 billion.

EDF has partnered with GIBB, a 100% black owned engineering consulting company, to deliver the projects which will be in the Northern Cape. Once the projects have reached financial close, construction is expected to take 24 months. This means that the projects are expected to deliver electricity to the grid by December 2024. The projects are expected to create approximately 1115jobs for 2 years during construction. This is a big milestone that has been 10 years in the making and will contribute towards filling the country’s 4000-6000 MW gap. The construction of a substation has already begun to ensure the projects come online on time. EDF estimates they would be able to provide electricity at R600/MWh.

Although these wind projects are not an immediate solution to the energy shortage in the country, they stand in sharp contrast to the operations at the national electricity company Eskom that implemented Stage 6 load shedding recently. Even with load shedding, Eskom still made a request for a 20.5% increase in tariffs for 2023 financial year (1 April 2022- 1April 2023). The National Energy Regulator of South Africa (Nersa) only approved a 9.61% increase from R1193 to R1308/MWh. For 2024 and 2025, Eskom requested the tariff be increased to R1726/MWh, a 32% hike. This was to allow for the requested R382billion revenue in 2024 and R351 billion revenue in 2025 to recover the R69 billion equity injection Nersa incorrectly deducted from the allowable revenue in the fourth multi-year price determination process. Eskom’s request received intense pushback during the Nersa public hearings listing a wide range of reasons. With the looming tariff increase, whether at 32% or lower, as well as electricity shortages, renewable energy is no longer a “nice to have” option for South Africa but rather a must.