Publications & Events
Alert

REIPPPP Bid Window 6: Grid Connection Capacity Constraints in the Northern Cape

In March 2022, in response to bid window 6 of the renewable energy independent power producer procurement programme ("REIPPPP"), Eskom published the Generation Connection Capacity Assessment of the 2024 Transmission Network ("GCCA – 2024"). While the GCCA – 2024 has shed more light on areas in the country with generation connection capacity, it also reaffirms existing concerns over the lack of capacity in the Northern Cape, traditionally a key area for PV projects.

 

Overview

To participate in REIPPPP, independent power producers ("IPPs") must identify areas of the grid with available generation connection capacity. Eskom made the information gathering process more accessible through the development of the Generation Connection Capacity Assessment ("GCCA").1 The GCCA – 2024 was published in response to bid window 6 of the REIPPPP, to inform IPPs of the potential capacity available on the Eskom transmission network to facilitate the connection of generation projects onto the national grid. It is an update to the GCCA – 2023 which was published shortly before the bid submission deadline for bid window 5 of REIPPPP.

 

Generation connection capacity across South Africa

According to the GCCA – 2024, South Africa's country supply area has 32.4 GW of new generation capacity (being capacity available for generation projects which will connect to the national grid in 2024 after conclusion of bid window 6 of the REIPPPP), which is distributed across eight of its nine provinces. Additionally, the country's Southern Supply Areas – comprising the Western Cape, the Eastern Cape, the Hydra Cluster, Free State, North West, and the Northern Cape – are limited to approximately 12.7 GW of generation capacity. The Northern Cape supply area remains wholly without generation connection capacity. 

In the Southern Supply Areas, the 12.7 GW of available generation is distributed as follows:

  • Western Cape: 1820 MW;
  • Eastern Cape: 1600 MW;
  • Hydra Cluster: 1696 MW;
  • Free State: 4113 MW;
  • North West: 3470 MW; and 
  • Northern Cape: 0 MW

 

The Northern Cape Capacity Problem

Eskom published the Generation Connection Capacity Assessment of the 2023 Transmission Network ("GCCA – 2023") in June 2021. It highlighted the available generation connection capacity for projects meant to connect to the national grid in 2023 following bid window 5 of the REIPPPP, and identified the Northern Cape as having 0 MW generation connection capacity available at both a supply area level and a local supply area level. This lack of grid connection capacity caused many potential bidders to reassess their proposed bids under bid window 5 of REIPPPP. Although the data was revised, the GCCA – 2024 reaffirmed the complete absence of generation connection capacity in the Northern Cape at both a supply area level and a local supply area level.

According to the GCCA-2023 and the GCCA-2024, the Northern Cape Power corridors are highly constrained and unable to evacuate additional generation to previously approved levels. Consequently, the Northern Cape requires substantial upstream network strengthening in order to facilitate new generation capacity. 

The Northern Cape's strong wind and solar resources make it a preferred location for IPPs seeking to construct renewable energy projects in South Africa. However, the publication of the GCCA – 2023 resulted in a number of potential bidders not submitting their bids during bid window 5 of the REIPPPP. It remains to be seen whether the ongoing lack of transmission capacity in the Northern Cape will incentivise IPPs to explore new locations in which to construct their projects, or whether it will cause an overall decrease in the number of bidders submitting responses to the REIPPPP bid window 6 request for proposals. 

Bid window 6 is intended to be a step forward in introducing new generation capacity to South Africa's energy mix. However, the lack of transmission capacity in the Northern Cape has highlighted some of the challenges that Eskom may have to overcome to ensure that the country achieves the objectives set out in the Integrated Resources Plan.

 

1 GCCA-2023 page 1

 

Rhulani Matsimbi (Trainee Lawyer, White & Case, Johannesburg) contributed to the development of this publication.

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2022 White & Case LLP