(Bloomberg) -- South Africa awarded 1,760 megawatts of green-power projects to companies as part of a multi-year program to cut its reliance on coal for electricity, with limited access to the country’s constrained transmission grid curbing its plans.
The government received 40 bids for 1,800 megawatts it had sought, but only eight bidders were successful, mainly because of a lack of grid capacity in the regions where the projects would be, Electricity Minister Kgosientsho Ramokgopa told reporters in Pretoria Monday.
“While there is appetite, the limiting factor is grid capacity,” he said. “The grid is becoming a binding constraint — it’s going to undermine the ability of the country to benefit from these renewable-energy resources.”
The projects are in the Mpumalanga, Limpopo, Free State and North West provinces and exclude the Western, Northern and Eastern Cape because grid capacity in those regions is “exhausted,” Ramokgopa said.
The nation has a 1.5 trillion-rand ($82 billion), five-year plan to develop renewable energy, green hydrogen and electric-vehicle industries and won $9.3 billion of climate finance from some of the world’s richest nations to do so in a pact known as the Just Energy Transition Partnership.
It’s also working on a 390 billion-rand plan to expand its transmission network so it can connect more power plants. On Dec. 11, the government asked private investors for information on developing the grid to allow a transition to cleaner energy sources. The government will likely seek requests for proposals on transmission at the end of 2025, Ramokgopa said.
Infinity Power Holding SA is the main developer on six of the projects in the seventh bid window of South Africa’s renewables plan, while Mulilo Renewable Project Developments and Scatec Solar Africa Pty Ltd. will do one each, he said. The projects range from 150 megawatts to 240 megawatts in size.
South Africa is struggling to lessen its dependence on coal, which it uses to generate more than 80% of its electricity. The state-owned power utility that provides about 90% of the country’s power failed to properly maintain its plants or build new ones in time to avert almost-daily blackouts that plagued the continent’s most industrialized nation until March, when a new management team started at the company and is working to turn it around.
The government had sought 3,200 megawatts of energy from wind but decided not to award any projects because the bids were too expensive, the minister said.
The country also appointed eight preferred bidders to provide 615 megawatts of battery-storage energy at Eskom Holdings SOC Ltd. sites in the North West, Gauteng and Free State provinces. Mulilo is the main developer in five of the projects, while AMEA got two and EDF one, the minister said. These projects are for about 77 megawatts each.
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