South Africa currently faces a serious energy crisis with regular loadshedding due to a 6-10 GW effective generation capacity gap. This has a severe economic impact and could cause a 2% Gross Domestic Product (GDP) decrease in 2023. This study provides a potential solution to accelerate renewable capacity deployment as an emergency, temporary programme to help alleviate this short-term energy crisis. If implemented successfully, the proposed programme could bring up to 17 GW of renewables (4 GW of solar Photovoltaics (PV) and 13 GW of wind) online within 2.5 years.

A Feed-in-Tariff (FiT) is proposed to minimise the time required to bring new utility-scale capacity online by removing the time-consuming process of selecting preferred bidders. The programme would offer a non-negotiable 20-year Power Purchase Agreement (PPA) with a fixed FiT, with a 15% premium over REIPPPP, of 630 R/MWh for solar PV and 910 R/MWh for wind projects greater than 50 MW. The premium is designed to attract developments in the northeast of the country, where load factors are expected to be on average 15% lower for wind, and to compensate for curtailment which will be required to optimise grid utilisation. The programme would be limited to a maximum of 16.8 GW, as additional capacity will either require determinations for the procurement of new electricity generating capacity outside of the guardrails set by the existing IRP or updating the IRP, both of which have long lead times. The objective of this proposed programme is not to replace the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) nor the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) but to rather complement these programmes to bring additional capacity online quickly. The study was conducted by the Boston Consulting Group with legal input from Norton Rose Fulbright and commissioned by Climate Neutrality Foundation.

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