Minister of Mineral Resources and Energy, Gwede Mantashe, has announced eight preferred bidders for the Risk Mitigation Independent Power Producer Procurement Programme.
"The evaluation process has resulted in the selection of eight preferred bids totalling 1 845 megawatts (MW) and a further three eligible bids totalling 150 MW," Mantashe said.
Addressing a media briefing on Thursday in Pretoria on the latest developments in the energy sector, he said the three eligible bids are subject to value for money proposition in line with the provisions in the Request for Proposal.
"It is important to note that these three bidders are within the 2 000 MW capacity threshold in terms of the evaluation rankings, but their announcement can only be made following satisfactory value for money propositions," Mantashe said.
The preferred bidders include: ACWA Power Project DAO; Karpowership SA Coega; Karpowership SA Richards Bay; Karpowership SA Saldanha; Mulilo Total Coega; Mulilo Total Hydra Storage; Oya Energy Hybrid Facility and Umoyilanga Energy.
"The solutions provided by these preferred bidders are from a combination of a range of technologies that include, Solar PV, wind, liquified natural gas and battery storage.
"The prices for the proposed solutions range from R1 468 per megawatt hour (per MWh) to R1 885 per MWh. The weighted average price is R1 575 per MWh," the Minister said.
These eight projects will inject a total private sector investment amount of R45 billion to the South African economy, with an average local content of 50% during the construction period.
South African entity participation from these projects is 51% with black ownership at 41%.
About 3 800 job opportunities will be created during the18-month construction period and a further 13 500 during the 20-year Power Purchase Agreement (PPA) term.
"The Preferred Bidders are required to reach financial close by no later than the end of July 2021. Due to the urgency to bring power online, this date is not negotiable.
"It is for the Preferred Bidders to manage all the risks to reach financial close. It is envisaged that, first power from these projects will be connected to the grid from August 2022," the Minister said.
Procurement of additional power
The Request for Proposal (RFP) for the procurement of 2 600 megawatts under the Renewable Energy IPP Procurement Programme Bid Window 5 was released to the market at midnight on Thursday.
"Of the 2 600 megawatts from this Bid Window 5, 1 600 megawatts will be from wind and 1 000 megawatts from Solar PV. Given the energy challenges that we are facing the objective is to get these projects connected to the grid as soon as possible," the Minister said.
The closing date for the Bid Submission is 4 August 2021.
Government intends to release four more Requests for Proposals within the next 12 months. These will include:
- 2 600MW from renewable energy,
- 3 000MW from gas,
- 1 500MW from coal, and
- 513MW from battery storage.
"In line with the Integrated Resource Plan (IRP) and the provisions in the electricity regulations of new generation capacity, additional determinations will be issued to Eskom and municipalities as and when requests are received.
"The Department of Energy is working with the necessary speed to review the licensing threshold for increased embedded generation," Mantashe said.