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SAPVIA commends DoE for Round 3 Bid Submission date delay

10 September 2012:

SAPVIA commends DoE for Round 3 Bid Submission date delay

The South African Photovoltaic Industry Association (SAPVIA) would like to commend the Department of Energy for the decision taken on 7 September 2012 and articulated in Briefing Note 14 for a delay in the Round 3 Bid Submission Date.

SAPVIA was one of the many associations that engaged with the Department over the past few weeks over concerns with a number of aspects associated with the REIPPPP procurement process. SAPVIA members include developers who have been successful in Rounds 1 & 2 (as well as preparing for Round 3) of the procurement process as well as a large number of international equipment suppliers who are in the process of making large investment decisions to relocate the manufacturing of solar components to South Africa. SAPVIA is therefore well positioned to give the Department a practical view of the experience of the REIPPPP process from very relevant stakeholders.

The REIPPPP has received unanimous commendation from local and international commentators of a comprehensive process that has as great applicability for a developmental economy. The steep drop in prices between Round 1 and 2 as a result of a competitive process has resulted in a sharp learning curve and a greater value for money outcome for the South African consumer. However, the success of the REIPPP process will only be truly measured when projects have reached financial close and construction has commenced. Round 1 bidders are in the midst of a second government induced delay to financial closure and there is concern in the industry that a further delay, beyond the government’s third proposed closing date of 31st September, will weaken investor confidence and potentially divert foreign investment away from local projects and local manufacturing. In addition, SAPVIA believes that to maintain increasingly competitive tariffs into the future requires a number of the lessons learned from Round 1and 2 of the REIPPPP process to be taken into account by government and industry, specifically, for instance, to streamline the compliance and project development process and lower bid-submission costs. Competitive tariffs, linked to feasible projects, are crucial if we are to achieve a long-term sustainable renewable energy industry in this country.

Whilst the delay of the Round 3 submission date to 7 May 2013, is probably longer than SAPVIA members would have preferred, we believe our members will be supportive of such a delay as long as the concerns communicated to the Department can be effectively addressed during this hiatus in the REIPPPP and that the projects procured up to now progress expeditiously.

SAPVIA has indicated to the Department, and its programme partners, that it is ready, willing and able to work collectively with Government and other industry associations to address the issues raised during its deliberations with Government. SAPVIA is also urging Government to speedily make public the determination which will set out the long term implementation programme for renewables so that the investors may set in motion their investment plans.

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