Photo by: Karpowership
Name of the Project
Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
Location
South Africa.
Project Owner/s
Department of Mineral Resources and Energy (DMRE).
Project Description
The RMIPPPP, also known as the ‘emergency’ procurement round, is a response to the short-term electricity supply gap identified in the Integrated Resource Plan 2019.
The objective of the RMIPPPP is to not only alleviate the current electricity supply constraints but also reduce the use of diesel-based peaking electrical generators.
The programme aims to procure 2 000 MW from a range of energy sources and technologies.
The DMRE issued a request for proposal for the RMIPPPP in August 2020.
Mineral Resources and Energy Minister Gwede Mantashe released the names of the eight preferred bidders on March 18, 2021:
- the 150 MW ACWA Power Project DAO – a hybrid facility comprising solar photovoltaic (PV) and a battery energy storage system (BESS);
- a 450 MW Karpowership SA Coega facility – a gas-to-power plant based on imported liquefied natural gas (LNG);
- the 450 MW Karpowership SA Richards Bay facility – a gas-to-power plant based on imported LNG;
- a 320 MW Karpowership SA Saldanha facility – a gas-to-power plant based on imported LNG;
- the 198 MW Mulilo Total Coega facility – a hybrid plant employing solar PV and imported LNG;
- the 75 MW Mulilo Total hydra storage project – a hybrid facility comprising solar PV and a BESS;
- the 128 MW Oya Energy hybrid facility – a hybrid facility comprising solar PV, wind and a BESS; and
- the 75 MW Umoyilanga Energy – a hybrid facility comprising solar PV, wind and a BESS.
In June 2021, the DMRE announced the appointment of three additional preferred bidder projects following the completion of “value for money” negotiations with Norwegian renewables power producer Scatec.
The Scatec projects will comprise three hybrid plants with solar PV technology and BESSs, in the Northern Cape.
To meet the dispatchable profile demanded under the RMIPPPP, the three projects – Kenhardt 1, Kenhardt 2 and Kenhardt 3 – will together produce 540 MW of solar and 225 MW/1 140 MWh battery storage.
Scatec has indicated that the projects are the only ones selected under the RMIPPPP that rely exclusively on renewable energy, making the three-project portfolio arguably one of the biggest single-site solar-storage hybrids in the world.
The projects will include average local content of 50% during construction, South African entity participation of 51% and black ownership of 41%.
Potential Job Creation
Not stated.
Capital Expenditure
The combined investment value of the initial eight projects is estimated at R45-billion.
Planned Start/End Date
Not stated.
Latest Developments
Karpowership, which has been seeking to implement its three ship-based power projects in South Africa is “very confident” that the projects will proceed, despite prolonged regulatory setbacks.
“It has been two years of going through all these processes and the only remaining licence to get are the environmental licences,” Karpowership South Africa and regional director Mehmet Katmer has said.
Following the completion of public participation processes and the submission of a report, the Department of Forestry, Fisheries and the Environment will make a determination, and if favourable, the Karpowership expects the environmental licences for all three projects to be secured within months.
This is the third time Karpowership is undertaking public participation processes and the second time it is submitting environmental applications, having previously failed to meet the requirements. This has raised questions as to why the projects have not been disqualified, as well as why Eskom has agreed to reserve scarce grid resources for the powerships amid a clamour for grid access.
Should Karpowership prevail in securing its environmental authorisations the projects could be delivered within 12 months of achieving financial close.
Katmer has said the company will hold talks with the Department of Mineral Resources and Energy’s (DMRE's) Independent Power Producers Office and the relevant government authorities to fast-track the projects.
From an asset delivery perspective, the powerships are ready in Istanbul and Singapore, and can be delivered in less than a month. The longest lead item is the transmission line and the gas pipeline, and if these can be fast-tracked as well, the projects could be implemented before the end of next year, Katmer claims.
Key Contracts, Suppliers and Consultants
None stated.
Contact Details for Project Information
DMRE, Natie Shabangu, email natie.shabangu@dmre.gov.za; or Thandiwe Maimane, email thandiwe.maimane@dmre.gov.za.