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) – in the Northern Cape;
- the 450 MW Karpowership SA Richards Bay facility – a gas-to-power plant, based on imported LNG – in the Northern Cape;
- a 320 MW Karpowership SA Saldanha facility – a gas-to-power plant, based on imported LNG – in the Northern Cape;
- 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, in the Northern Cape; and
- the 75 MW Umoyilanga Energy – a hybrid facility comprising solar PV, wind and a BESS, Northern and Eastern Cape.
Umoyilanga Energy will operate as a virtual power plant, combining generation from two sites that are 900 km apart. Avondale, in the Northern Cape, will include 115 MW of solar PV and 30 MW of battery storage, while Dassiesridge, in the Eastern Cape, will incorporate 63 MW of wind and 45 MW of battery storage.
To meet its 75 MW dispatchable profile, Dassiesridge will charge batteries from the wind energy at night and discharge power in the morning until the sun rises. The solar installation at Avondale will supply the bulk of the energy during the day, supplemented by wind energy from Dassiesridge. Excess solar energy will be used to charge the batteries at Avondale, which will discharge after sunset.
In June 2021, the DMRE announced the appointment of three additional preferred bidder projects under the RMIPPPP, following the completion of “value for money” negotiations with Norwegian renewables power producer Scatec.
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
The Oya Energy hybrid facility and Umoyilanga Energy will contribute 3 966 job-year opportunities in the construction and operation of these power plants.
Capital Expenditure
The combined investment value of the initial eight projects is estimated at R45-billion.
The Oya Energy hybrid facility and Umoyilanga Energy projects have a combined investment value of R14.6-billion.
Planned Start/End Date
The Oya Energy hybrid facility and Umoyilanga Energy projects are expected to be online from 2025 onwards.
Umoyilanga Energy is expected to achieve financial close by the second half of October 2023, with construction starting immediately thereafter to achieve commercial operations in May 2025.
Latest Developments
Following much contestation from environmental groups, Turkish energy company Karpowership’s South African subsidiary has succeeded in getting environmental authorisation for its Richards Bay environmental-impact assessment (EIA) application.
This represents a critical milestone in Karpowership’s participation in the RMIPPPP and towards reaching financial close on the project.
The group has been seeking to implement three ship-based floating gas-to-power projects on the South African coast for more than two years after being named a preferred bidder in the RMIPPPP.
Karpowership had three projects approved as preferred bidders in March 21; however, it has been experiencing prolonged regulatory setbacks in getting the projects to financial close.
The environmental licences on the three projects, earmarked for the ports of Richards Bay, Saldanha Bay and Ngqura, are the only outstanding licences required to start the projects.
Karpowership had undertaken multiple public participation processes and submitted multiple EIAs, which previously failed to meet the requirements.
The company is confident that the projects could be delivered within 12 months of achieving financial close.
Meanwhile, Karpowership has said that the Department of Forestry, Fisheries and the Environment’s decision to grant environmental authorisation for the Richard’s Bay EIA not only vindicates the company’s thorough EIA methodology and process but also demonstrates government’s willingness to objectively evaluate the information at hand.
The decision also further justifies that powerships exceed international and South African environmental standards, the company has stated.
Further, Karpowership envisions dedicating R6-billion to economic development in Richards Bay over the life of the project through various job opportunities and socioeconomic initiatives.
To now meet financial close, Karpowership must finalise agreements with Transnet National Ports Authority.
Key Contracts, Suppliers and Consultants
Scatec (Kenhardt 1, Kenhardt 2 and Kenhardt 3 ); G7 Renewable Energies, ENGIE, Meadows Oya Energy and Perpetua RMI4P (Oya Energy hybrid facility); and EDF Renewables and Perpetua Holdings (Umoyilanga Energy).
Contact Details for Project Information
DMRE, Natie Shabangu, email natie.shabangu@dmre.gov.za; or Thandiwe Maimane, email thandiwe.maimane@dmre.gov.za; mediadesk@dmre.gov.za.