Procurement models applied to independent power producer programmes in South Africa
Journal Article
2014
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Energy Research Centre
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University of Cape Town.
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University of Cape Town
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Abstract
What is the procurement model in South Africa as it applies to renewable energy (RE) and base load (BL) independent power producer procurement programmes (IPPPP) and how might these be improved? What lessons have been learned in the RE IPPPP? What challenges might the emerging BL IPPP programme face and how might these challenges be addressed? To what extent are lessons from RE applicable to BL? This research paper provides conclusions from consideration of these questions, shares research findings, highlights remaining critical questions, and provides recommendations for the future. Procurement is an aspect of governance, and improved governance is one of five goals of energy policy, as outlined in the 1998 White Paper, which considers procurement as ‘that step within planning during which government determines what is to be built; and which ends with the announcement of preferred bidder(s)'. Research findings are based on primary data gathered through a literature review followed by interviews with 20 senior respondents from the following zones within the energy sector: government, business, investment, consultancy and advisory, labour and NGOs. A listing of secondary literature consulted is provided on the final pages of this report. Overall, the REIPPPP is viewed by many respondents as a positive and innovative programme. Caution is mainly expressed in relation to the long-term prospects for benefits that really accrue to South Africa’s development agenda. A key finding is that Eskom’s future financial health presents a significant risk to both RE and BL IPPPPs.
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Reference:
Martin, B. & Winkler, H. (2014). Procurement models applied to independent power producer programmes in South Africa. Cape Town, Energy Research Centre. Energy Research Centre, University of Cape Town, Cape Town, South Africa.