Two IPPs from Western Cape chosen to help alleviate electricity supply constraints
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Cape Town – The preferred bidders for the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) have been announced by Energy Minister Gwede Mantashe.
The RMIPPPP was released to the market in August 2020. The aim was to alleviate the electricity supply constraints and to reduce the extensive utilisation of diesel-based peaking electrical generators in the medium-to-long-term.
The bid submission closed on December 22, 2020, and attracted a total of 28 bid responses with a potential contracted capacity of approximately 5,117MW.
Addressing energy stakeholders in Johannesburg, Mantashe said: “This clearly demonstrates a sustained private sector interest in participating in the South African energy landscape.”
He said: “The quantity and quality of the bid responses and potential megawatt of contracted capacity allowed for a competitive price evaluation. All compliant bids were subjected to local and international benchmarking which is necessary to ensure that we receive value for money.”
The evaluation process resulted in the selection of eight preferred bids totalling 1 845 MW and a further three eligible bids totalling 150MW.
The preferred bidders are ACWA Power Project DAO, Karpowership SA Coega, Karpowership Saldanha Bay, Karpowership Richards Bay, Mulilo Total Coega, Mulilo Total Hydra Storage, Oya Energy Hybrid Facility, and Umoyilanga Energy.
Mantashe said the eight projects were expected to inject R45 billion in total private sector investment into the economy, with an average local content of 50 percent during the construction period.
In the Western Cape, the Oya Energy Hybrid Facility in the Karoo was selected alongside Karpowership SA Saldanha.
Oya Energy Co-founder and Director Killian Hagemann said: “The Oya project matches and exceeds governments expectations as it is extremely competitive while still complying with all strict requirements set by the IPP Office and its advisers, guaranteeing full compliance in terms of South African regulations.
“Value for money has played a key role in the design choices and operational philosophy and we look forward to the successful completion of the project,” said Hagemann.
The Oya project is a hybrid facility that will be offering dispatchable renewable energy to Eskom.
Oya Energy (Pty) Ltd will own and operate the 128 MW plant near the town of Matjiesfontein, straddling the Western and Northern Cape Provinces.
Oya will be the largest hybrid energy project in Africa and is unique in the world in terms of technology mix, size, and price.
Karpowership SA spokesperson Patrick O’Driscoll said that the company’s offering will be tailored to meet the requirements of the document (in terms of megawatts, duration, fuel type etc.) whilst guaranteeing speed of delivery in the shortest of time frames and ensuring it is competitive technically and commercially against current market pricing.
Karpowership currently has five powerships that operate on regasified liquid natural gas (LNG) ready for deployment to the country. A powership is a fully self-contained floating power station.
These powerships can be made operational within two months of being given an official notice to proceed, ramping up to 2000 MW of additional power to the national grid within five months.
Each powership contains its own generation facility, fuel storage, electrical control system, along with a grid substation as the interconnection point to the national grid.
The on-board substation is connected via overhead aerial cables to the national grid without lengthy delays, complicated engineering or major infrastructure construction.
Electricity is generated by several high power alternators in the hull of the powership, driven by engines that operate on regasified liquid natural gas (LNG).
Mantashe also announced the opening of Bid Window 5 of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), which will procure a further two 600MW of renewable energy from IPPs.
Mantashe set August 4, 2021, as the date for the conclusion of duly procured Power Purchase Agreements (PPAs).
He said the auction, which aims to procure 1.6 GW of wind energy, is in line with the gazetted Integrated Resource Plan (IRP) 2019.
South African Wind Energy Association (SAWEA) CEO Ntombifuthi Ntuli said: “The announcement by the Minister to open Bid Window 5, calling for proposals from IPPs, marks the rebirth of the wind energy industry, as the last bidding round took place almost seven years ago, in 2014.”
Ntuli said: “Two of the eight preferred bidders in RMIPPPP include wind power IPP’s in the form of hybrid projects. These projects incorporate wind, solar and storage technology on a utility scale, which is a first for South Africa.”
“SAWEA has noted that this is a massive advantage for the country, as hybrid projects enhance the reliability and stabilization of the power generation system. Plus, they do not always require grid expansion, as hybrid grids produce power at different intervals and during complementary seasons,” said Ntuli.