South Africa Doubles Plans for Renewable Energy on Program Wins

South Africa will next year announce plans that will almost double the amount of power it intends to draw from renewable sources after the success of a program to spur more clean generation, the Department of Energy said.

An additional 3,600 megawatts will be sought in accordance with the country’s integrated resources plan, and will include an additional 200 megawatts from smaller black-owned producers, the Pretoria-based ministry said in an e-mailed statement today.

The country has so far procured about 3,900 megawatts of capacity through three competitive rounds of bids by independent producers, with about $10 billion invested. That already exceeds the 3,725 megawatts initially sought from five bid windows.

“In 2015, a new determination will be announced to maintain the momentum of the program,” it said. In December 2012, the ministry determined further 3,200 megawatts would be sourced when the current program ends.

South Africa is expanding its capacity as state utility Eskom Holdings SOC Ltd., which generates about 95 percent of the country’s power mostly using coal, was forced this year to implement managed blackouts due to breakdowns at its aging fleet of plants and failure to invest in new facilities on time.

The ministry is working with the Development Bank of Southern Africa Ltd. to create a funding mechanism for the smaller producers, which will “enable the broadening of the local market and create black entrepreneurs in the energy space,” it said.

South Africa’s policy of black economic empowerment, known as BEE, is designed to compensate non-white South Africans for economic exclusion under the apartheid system of racial segregation, which ended in 1994.

Preferred providers in the program’s fourth round will be named on Dec. 15.

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