SUCCESS CASES

The South African Government's REIPPP Program: How to boost renewables?

The Challenge Addressed

In South Africa, as in many other countries, the government or public companies have traditionally owned all power generation assets. In 1998, South Africa was at a major crossroads: on the one hand, power supply had become a public problem, with temporary power outages occurring very frequently; on the other hand, the construction of new generation infrastructure faced the challenge of climate change and overcoming the traditional reliance on coal-fired electricity.

The challenge for the South African government was not only to generate clean energy, but to do so by mobilizing private sector investment and knowledge, and to ensure that an investment of the expected size would translate into improvements in the economy and society, generating incentives for local communities and communities and achieving greater equality between the different groups that make up South African society.

All this came to fruition in 2011 with the launch of the Renewable Energy Independent Power Producer Program or REIPPP. Designing, tendering and managing an investment program to build power plants with the seven clean technologies, with an investment volume in excess of US$5 billion or 5 billion euros, was a challenge never before faced by South Africa's National Treasury and the office created to manage this program, the IPP Unit.

Novadays' Contribution

Between 2009 and 2019 -the years of launch and consolidation of South Africa's REIPPP- Novadays worked together with senior officials of the IPP Unit in the analysis, design, bidding and management of the REIPPP program, contributing with the knowledge accumulated in Spain in the renewable energy sector, to the strategic definition and implementation of the entire program.

With the support of the Government of Spain and various Spanish institutions, Novadays teams worked for a decade, side by side, with teams from the Government of South Africa and with consultants from other countries such as the U.S., Germany or Denmark, among others; creating together what has become a model of public-private partnership program, not only in Africa but in the rest of the world.

Novadays, with various technical offices, contributed to the strategic design of the Program, the creation of its instruments (RFIs, RFPs, etc.), market consultations and dialogue with stakeholders, the dissemination and international dissemination of the Program, the evaluation of the projects presented, the creation of a local impact model, the financial closure of the projects and their technical follow-up.

Impact and Results Obtained

The results and impacts obtained by the REIPPP Program are of a caliber difficult to quantify, having transformed the energy sector in South Africa and created a public-private collaboration framework of reference for this type of projects. Thus, results have been achieved such as:

  • Construction of 92 generation assets with wind, solar (PV and solar thermal), hydroelectric power, etc.
  • The generation of 6,327 MW by independent producers.
  • The contracting of more independent power producers, in the first four years, than the sum of all those contracted in the rest of Africa.
  • The creation of more than 54,000 jobs.
  • The significant reduction in energy prices in each round, with wind and PV prices dropping by 48% and 71% between 2011-2015, placing them below the average South African generation price.
  • Mobilization of a private investment of 20.5 billion dollars or 20.5 billion euros.
  • The inclusion of local content in each project in excess of 50%.
  • The investment of more than 800 million euros in local community development projects, those located within a 50km radius of each project.

 

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