South Africa Approves $3.4 Billion Renewable Power Pla

South Africa approved 19 wind, solar and hydropower-plant proposals costing 28 billion rand ($3.4 billion) in a second bidding round as it expands generation capacity and boosts cleaner energy.

The Department of Energy received 79 bids, 51 of which met the qualification criteria, Minister Dipuo Peters said in a speech in Pretoria today. The total capacity they could bid for was 1,275 megawatts, she said.

That adds to 28 plants costing 45 billion rand to generate 1,416 megawatts approved in December.

South Africa in August said it’s looking to add a total of 3,725 megawatts by the end of 2016. The country is expanding its capacity after state utility Eskom Holdings SOC Ltd., which generates most of its power from coal, ran short in 2008, idling mines.

The whole program will cost an estimated 100 billion rand, Peters said. She named Sishen Solar, Solar Capital De Aar 3, Dreunberg, Gouda Wind, Amakhala Emoyeni, West Coast 1 and Grassridge among the preferred bidders in the second round.

Costs proposed in the second-round projects declined while the proportion of equipment and services sourced locally rose as bids became more competitive, Energy Department Director-General Nelisiwe Magubane said. The average cost for solar photovoltaic plants dropped to 1,645 rand a megawatt-hour in the second round from 2,758 rand in the first, a copy of a presentation handed to reporters in Pretoria today showed.

Some first bidding-round winners will find it hard to complete their funding arrangements by the June 30 deadline, Deputy Director-General Ompi Aphane said.

South Africa will open a third bidding round at a date yet to be decided, Magubane said.