More than 60 power firms signal intention to bid into ‘emergency’ scheme – IPP Office
ENGINEERING NEWS / 17 NOVEMBER 2020 - 14.32 / TERENCE CREAMER - CREAMER MEDIA EDITOR
PP Office CEO Tshifhiwa Bernard Magoro
South Africa’s Independent Power Producer (IPP) Office reported on Tuesday that more than 60 respondents had signalled their intention, by the October 31 deadline for doing so, to participate in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), through which government is aiming to procure 2 000 MW of so-called ‘emergency power’.
IPP Office CEO Tshifhiwa Bernard Magoro told participants in a virtual panel discussion held as part of the third South Africa Investment Conference that there had been a high degree of interest in the “technology agnostic” programme, criticised by some commentators as including criteria that made it difficult for renewables and battery solutions to submit competitive bids.
Photo by Creamer Media's Donna Slater
He confirmed that the bidding deadline had been extended until December 22, but said he remained optimistic that some of the energy and capacity would be available for integration into the grid from June 2022. However, an outer deadline of December 2022 had been set for full commercial operations.
The winning RMIPPPP bidders would be announced in February and financial close was expected by June next year, after which construction would begin. Government has stated previously that the programme should attract investment of some R40-billion.
Magoro also confirmed that preparations were under way for a “roll-out plan” for the procurement of 11 813 MW of new capacity catered for by a recently gazetted Ministerial determination, which made allocations for wind and solar (6 800 MW), gas to power (3 000 MW), coal (1 500 MW) and battery energy storage (513 MW).
He indicated, however, that the request for proposals (RFP) documentation for the fifth bid window, or BW5, of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPPP) would be released only in January and not in December, as had been signalled previously by government.
Following the restart of the REIPPPP, which ran successfully until 2015, at which point Eskom refused to enter into new power purchase agreements, claiming a return to a surplus position, the IPP Office was gearing up to run “overlapping” RFPs to help close an energy and capacity gap of as much as 5 000 MW that had since emerged.
He said the overlap would be necessary to ensure a “quick roll-out” in line with both the current determinations and future determinations that would have to be released in order for the Integrated Resource Plan 2019 (IRP2019) to be implemented.
Mantashe said procurement timelines for the the 11 813 MW determination, beyond REIPPPP BW5, would be shared soon.
All the bids would seek to support the socioeconomic priorities of government including local and black ownership, skills development, local content, community involvement and the participation of youth, women and people living with disabilities.
Magoro also reported that the IPP Office would seek to finalise the so-called ‘smalls’ programme in 2021, which would involve 20 IPP projects of less than 5 MW in size.
In addition, plans to mop up any surplus IPP capacity that might be available from the existing renewables fleet were advancing. “We are busy finalising the documentation and, by early next year, we should conclude this process.”
Mantashe said that obstacles had also been removed for those wishing to invest in “generation for own use”, with projects below 1 MW able to proceed in the absence of a licence and with larger projects able to proceed without requiring a IRP2019 deviation notice from the Minister.
He indicated, however, that he was not willing to deregulate the self-generation market even further, suggesting that allowing projects larger than 1 MW to proceed without a licence would cause “chaos” for the transmission system.
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