South Africa's Renewable Energy IPP Procurement Program : Success Factors and Lessons
South Africa occupies a central position in the global debate regarding the most effective policy instruments to accelerate and sustain private investment in renewable energy. In 2009, the government began exploring feed-in tariffs (FITs) for renew...
| Main Authors: | , , |
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| Format: | Publications & Research |
| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/05/19768310/south-africas-renewable-energy-ipp-procurement-program-success-factors-lessons http://hdl.handle.net/10986/20039 |
| Summary: | South Africa occupies a central
position in the global debate regarding the most effective
policy instruments to accelerate and sustain private
investment in renewable energy. In 2009, the government
began exploring feed-in tariffs (FITs) for renewable energy,
but these were later rejected in favor of competitive
tenders. The resulting program, now known as the Renewable
Energy Independent Power Producer Procurement Program
(REIPPPP), has successfully channeled substantial private
sector expertise and investment into grid-connected
renewable energy in South Africa at competitive prices. To
date, a total of 64 projects have been awarded to the
private sector, and the first projects are already on line.
Private sector investment totaling US$14 billion has been
committed, and these projects will generate 3922 megawatt
(MW) of renewable power. Prices have dropped over the three
bidding phases with average solar photovoltaic (PV) tariffs
decreasing by 68 percent and wind dropping by 42 percent, in
nominal terms. Most impressively, these achievements all
occurred over a two-and-a-half year period. Finally, there
have been notable improvements in the economic development
commitments, primarily benefiting rural communities. One
investor characterized REIPPPP as 'the most successful
public-private partnership in Africa in the last 20
years.' Important lessons can be learned for both South
Africa and other emerging markets contemplating investments
in renewables and other critical infrastructure investments. |
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