South Africa’s Ministry of Mineral Resources and Energy is conducting a fairly unique procurement programme for 2GW of energy capacity, to come from a “range of energy source technologies”.
With a closing date of 25 November this year and projects needing to be in commercial operation by mid-2022, the government, together with the national energy regulator, has determined that it quickly needs to bridge the gap between demand and supply on the grid.
Independent power producers (IPPs) are invited to prepare bids for projects with an installed capacity of between 50MW and 450MW, for 20-year power purchase agreements (PPAs). Winning projects will need to be dispatchable under terms defined by the tender: the main requirement being that they can dispatch power to the grid as needed between the hours of 05:00 and 21:30.
With the tender closed off to coal and diesel plants, this opens a pathway for renewable energy projects paired with energy storage, it also leaves the door open for natural gas. Consultancy Clean Horizon has partnered with local renewables consultancy Harmattan to unpick and analyse the tender and how it works.
Clean Horizon head of market analysis, Corentin Baschet, spoke to Andy Colthorpe about what the “almost technology agnostic” tender aims to do and the type of companies and projects likely to be successful in it.
The new tender is called the Risk Mitigation IPP Request for Proposals (RFP) – what’s the element of risk mitigation about and how is that put into the tender’s design?
The Risk Mitigation IPP RFP is a 2GW tender put out by the government of South Africa. ‘Risk mitigation’: because they’re lacking 2GW of capacity in the coming years, they’re risking a lot of load shedding essentially. Coal and diesel cannot participate [in the tender], it’s open to gas, renewables and storage. It’s close to technology agnostic, it’s made so that any distributed generation power plant can participate, except for diesel and coal.
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