Progress on the Renewable Energy IPP Procurement Programme

November 2013

Integrated Resource Plan

New build optionsCoal

(PF, FBC, imports, own

build)

Nuclear Import hydro Gas – CCGT Peak – OCGT Wind CSP Solar PV

MW MW MW MW MW MW MW MW2010 0 0 0 0 0 0 0 02011 0 0 0 0 0 0 0 02012 0 0 0 0 0 0 0 3002013 0 0 0 0 0 0 0 3002014 5001 0 0 0 0 400 0 3002015 5001 0 0 0 0 400 0 3002016 0 0 0 0 0 400 100 3002017 0 0 0 0 0 400 100 3002018 0 0 0 0 0 4004 1004 3004 2019 250 0 0 2373 0 4004 1004 3004 2020 250 0 0 2373 0 400 100 3002021 250 0 0 2373 0 400 100 3002022 250 0 1 1432 0 805 400 100 3002023 250 1 600 1 1832 0 805 400 100 3002024 250 1 600 2832 0 0 800 100 3002025 250 1 600 0 0 805 1 600 100 1 0002026 1 000 1 600 0 0 0 400 0 5002027 250 0 0 0 0 1 600 0 5002028 1 000 1 600 0 474 690 0 0 5002029 250 1 600 0 237 805 0 0 1 0002030 1 000 0 0 948 0 0 0 1 000Total 6 250 9 600 2 609 2 370 3 910 8 400 1 000 8 400

First Determination

Second Determination

1. Built, owned & operated by IPPs 2. Commitment necessary due to required high-voltage infrastructure, which has long lead time 3. Commitment necessary due to required gas infrastructure, which has long lead time 4. Possibly required grid upgrade has long lead time and thus makes commitment to power capacity necessary

1st Determination

Second Determination

Background

• To-date, the Department has: – Under Bid Window 1, entered into 28 agreements on 5 November 2012;– Under Bid Window 2, entered into 19 agreements on 9 May 2013.

•With regards to Bid Window 3:

– Received 93 bids on the 19 August 2013

– These bids amount to 6023MW whilst the available MW for allocation

was 1473MW

– The Department was pleased to note the competitive pricing offered in

the bids received

5

Procurement documents

Procurement Process Background

To be concluded in respect of all Bid Window 3 projects

To be concluded in respect of all Bid Window 3 projects

6

Contractual Arrangement

Government Framework Support Agreement

Implem

entation AgreementPo

wer

Pur

chas

e Ag

reem

ent

7

Request for Proposal (RFP)

Procurement Process Background

8

OVERVIEW OF EVALUATION PROCESS

9

Evaluation Protocols•Evaluation conducted in a ‘closed’ evaluation environment, under strict security conditions

•Members of the evaluation team are ‘ring-fenced’ within each of their firms

•Declaration of interest by all firms and individuals involved in the evaluation process

•Reports prepared by each discipline reviewed by independent review teams

•Overall process reviewed by independent governance review teams

10

PREFERRED BIDDERS

11

Preferred BiddersSummary

12

No of Bids

MW taken by Preferred Bidders

Maximum MW allocated for

Bid Window 3

Solar photovoltaic 6 435 401

Wind 7 787 654

Concentrated solar 2 200 200

Small Hydro (<40 MW) 0 0 121

Landfill gas 1 18 25

Biomass 1 16 60

Biogas 0 0 12

TOTAL 17 1 456 1 473

Preferred Bidders Salient TermsSolar Photovoltaic

13

Bid Window 3 Bid Window 2 Bid Window 1

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘11) R 881 R 1 645 R 2 758

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘13) R 990 R 1 848 R 3 098

MW allocation 435 MW 417 MW 632 MW

Total Project Cost (R’million) R 8 145 R 12 048 R 23 115

Preferred Bidders Salient TermsWind

14

Bid Window 3 Bid Window 2 Bid Window 1

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘11) R 656 R 897 R 1 143

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘13) R 737 R 1 008 R 1 284

MW allocation 787 MW 562 MW 634 MW

Total Project Cost (R’million) R 16 969 R 10 897 R 13 312

Preferred Bidders Salient TermsConcentrated Solar Power

15

Bid Window3

Bid Window2 Bid Window 1

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘11) R 1 460* R 2 512 R 2 686

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘13) R 1 640* R 2 822 R 3 017

MW allocation 200 MW 50 MW 150 MW

Total Project Cost (R’million) R 17 949 R 4 483 R 11 365

* Bid Window 3 base price payable for 12 hours every day and 270% of base price payable for 5 “peak” hours every day. This pricing basis is not comparable with Bid Windows 1 and 2.

Preferred Bidders Salient TermsLandfill Gas

16

Bid Window 3 Bid Window 2 Bid Window 1

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘11) R 837 N/A N/A

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘13) R 940 N/A N/A

MW allocation 18 MW 0 MW 0 MW

Total Project Cost (R’million) R 288 R 0 R 0

Preferred Bidders Salient TermsBiomass

17

Bid Window 3 Bid Window 2 Bid Window 1

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘11) R 1 246 N/A N/A

Price: Fully Indexed (Ave Rand per MWh) (Base Apr ‘13) R 1 400 N/A N/A

MW allocation 16 MW 0 MW 0 MW

Total Project Cost (R’million) R 1 062 R 0 R 0

Preferred BiddersJob creation per Province

18

DescriptionJobs during

construction period

Jobs during operations

period*Eastern Cape 512 4908Free State 414 1443Gauteng 6 240KwaZulu-Natal 96 240Limpopo 160 1366Northern Cape 6502 8736Western Cape 223 1295

TOTAL 7915 18228

* One job = 12 person-months

Preferred BiddersInvestment per Province

19

DescriptionTotal Project

Cost **(ZAR million)

Total Project Value *

(ZAR million)

Local content value (ZAR

million)Eastern Cape 3 880 3 520 1 612Free State 1 253 1 106 574Gauteng 288 210 88KwaZulu-Natal 1 062 653 261Limpopo 952 819 412Northern Cape 35 747 26 427 12 482Western Cape 1 230 1 075 528

TOTAL 44 412 33 810 15 957* Total Project Cost - aggregate Debt and Equity required to fund the Project** Total Project Value - defined in the IA, used to calculate the Bidder’s local content commitment

Preferred BiddersForeign Investment

20

Totalfunding

Foreignportion

% of Total funding

Debt R 26 791 R 6 718 15,1%

Equity R 17 621 R 8 884 20,0%

TOTAL R 44 412 R 15 602 31.1%

Preferred Bidders Economic Development

Solar Photovoltaic

21

Bid Window 3

Bid Window 2

Bid Window 1

Local Content Value (R’million) R 3 698 R 4 943 R 6 563

Local Content % 53.8% 53.4% 38.4%

Job Creation : Construction (Citizens) 2119 2270 2381

Job Creation : Operations (Citizens) 7513 3809 6117

Preferred Bidders Economic Development

Wind

22

Bid Window 3

Bid Window 2

Bid Window 1

Local Content Value (R’million) R 6 283 R 4 817 R 2 727

Local Content % 46.9% 48.1% 27.4%

Job Creation : Construction (Citizens) 2612 1787 1810

Job Creation : Operations (Citizens) 8506 2238 2461

Preferred Bidder Economic Development

Concentrated Solar Power

23

Bid Window 3

Bid Window 2

Bid Window 1

Local Content Value (R’million) R5 627 R 1 723 R 2 391

Local Content % 44.3% 43.8% 34.6%

Job Creation : Construction (Citizens) 3082 1164 1883

Job Creation : Operations (Citizens) 1730 1180 1382

Preferred Bidders Economic DevelopmentLandfill Gas

24

Bid Window 3

Bid Window 2

Bid Window 1

Local Content Value (R’million) R88 N/A N/A

Local Content % 41.9% N/A N/A

Job Creation : Construction (Citizens) 6 N/A N/A

Job Creation : Operations (Citizens) 240 N/A N/A

Preferred Bidders Economic Development

Biomass

25

Bid Window 3

Bid Window 2

Bid Window 1

Local Content Value (R’million) R261 N/A N/A

Local Content % 40.0% N/A N/A

Job Creation : Construction (Citizens) 96 N/A N/A

Job Creation : Operations (Citizens) 240 N/A N/A

Analysis of MW allocation and remaining

Technology

MW capacity allocated in

First Bid Window

MW capacity allocated in Second Bid

Window

MW capacity allocated in

Third Bid Window

MW capacity remaining

Solar photovoltaic 632 417 435 1 041

Wind 634 563 787 1 336

Concentrated solar 150 50 200 200

Small hydro (≤ 40MW) 0 14 0 121

Landfill gas 0 0 18 7

Biomass 0 0 16 43

Biogas 0 0 0 60

Total 1 416 1 044 1 456 2 808

Preferred BiddersGeographic Distribution

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28

Project_Name Capacity (MW)

1 Khi Solar One 50.002 KaXu Solar One 100.00No. of Preferred Bidders for Solar CSP: 2 150.00

Recommended Preferred Bidders – CSPLocation for window one projects

Thank you

• For more information visit:– www.energy.gov.za and– www.ipp-renewbles.co.za