Photovoltaic (PV) projects were the government's top choice as a winning bidder in South Africa's seventh round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPPBW7) bidding round, bagging 1.76GW of winning capacity. The winning bidder will sign a 20-year power supply contract, and these projects are expected to be commercially delivered in the second half of 2025.

Notably, the 3.2GW of onshore wind allocated in this round of the original 5GW tender failed to win, making this the second consecutive round in which PV has been the sole winner (and the initial 1.8GW of capacity allocated to PV has not been fully utilised).

South Africa's Department of Power and Energy (DPE) said that four other onshore wind projects totalling 932.4MW were under negotiation, and that these four projects were expected to be the preferred winners in this round as ‘qualified bidders’ after passing cost-benefit negotiations and governance approvals. This reflects the fact that onshore wind projects are being offered at a higher price than photovoltaic projects.

In addition, the government has approved the reallocation of onshore wind quotas to PV projects so that more eligible bidders can be placed in the preferred winner category, thereby boosting the final capacity awarded.

Although the current 5GW round of bidding did not result in the selection of a full complement of winning projects, a total of 10.2GW of active bids were received during the bidding phase, comprising 40 PV projects and eight onshore wind projects. After an independent evaluation, 30 PV and 4 onshore wind projects submitted bids, and 1.76GW of capacity was awarded, all of it PV. PeleGreen Energy was the biggest winner, submitting 8 winning bids and eventually winning 6 of them. The winning tariffs ranged from 420.74 South African rand/MWh (about 22.71 USD/MWh) to 492.20 South African rand/MWh (about 26.56 USD/MWh).

The winning projects are located in Mpumalanga, Limpopo, Free State and North West Provinces, with a total investment of ZAR31.4bn (about US$1.7bn), and are expected to create 6,971 local jobs. Under the terms of the bid, 38.8 per cent of the total cost of the project will be allocated to local businesses during construction, equivalent to 7.8 billion South African rand (approximately $421 million), while 2.4 billion South African rand (approximately $129.5 million) will be invested in the operations and maintenance phase.

In addition, the government has announced the eight preferred winners of the second round of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPPBW2) bidding, with a total capacity of 615 MW.These projects will provide capacity, electricity and ancillary services to the national power utility, Eskom, at eight specific sites.

The projects will be an important part of South Africa's drive to diversify its energy sources, reduce its dependence on fossil fuels and achieve energy independence. The country announced plans in January 2023 to procure 14.77GW of new wind, photovoltaic and energy storage capacity.