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 DMRE issued a request for proposal (RFP) for the RMIPPPP in August 2020.

The RMIPPPP is a response to the short-term electricity supply gap identified in the Integrated Resource Plan 2019.

The objective of the RMIPPPP is not only to 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.

As a result of the emergency nature of the RMIPPPP, the objective is to procure energy from projects that are near ready.

Proposed technical solutions will have to be dispatchable and provide a range of support services to the grid system operator.

The projects should be able to operate between 05h00 and 21h30, and must have an automatic generation control load-following ability, flexible capacity factors and must be scalable with changing capacity requirements.

The minimum contracted capacity of a project will be 50 MW and the maximum contracted capacity will be 450 MW, subject to availability and transmission evacuation capacity at the connection point.

The RFP is designed to support broad-based black economic-empowerment initiatives, including ownership and localisation. Bidders will have to make commitments in terms of job creation, socioeconomic development, supplier and enterprise development, as well as skills development.

Potential Job Creation
Not stated.

Capital Expenditure
This RFP is expected to attract investment of about R40-billion.

Planned Start/End Date
All power procured under the RMIPPPP is expected to be fully operational by the end of June 2022.

Latest Developments
The evaluation of the 28 bids received under the RMIPPPP – which include project companies Oya Energy, Richards Bay Gas Power 2, Scatec Solar, Veld Nama Sun, CB Hybrid Power, Frontier Power, Karpowership SA, Greenleaf Kagiso, Hyperion Solar Hybrid, Vortm Energy, Soventix South Africa, Mulilo Total Coega, Mulilo Total Nieuwe-Coega (trading as Mulilo Total Storage), Greenleaf G5, Danax Energy, Gunstfontein Wind Farm, Lutzburg Solar, DNG Power Holdings – is expected to be concluded by February 2021, the Independent Power Producer (IPP) Office has confirmed.

The preferred bidders will be announced as soon as the recommendations from the evaluation team have been approved by the DMRE.

The IPP Office has indicated in a response to emailed questions from Engineering News that the RFP for the fifth bid window of the Renewable Energy Independent Power Producer Procurement Programme “will be released in the first quarter of this year as announced by the department”.

The list of the 28 RMIPPPP bidders was published by the IPP Office after the bid submission deadline on December 22 and includes various proposals to meet the criteria outlined for the emergency programme, including power ships, hybrid renewables and battery solutions, as well as gas-to-power plants.

The submission deadline was initially set for November 24, but was extended at the request of the bidders.

Qualifying RMIPPPP projects are expected to achieve full commercial operation by June 2022.

The evaluation will start once all preparatory work has been concluded, including the appointment of transaction advisers, the IPP Office has told Engineering News.

Evaluation will be conducted by an external, independent team of transaction advisers from various disciplines such as financial, legal, technical and economic development.

The objective of the evaluation is to determine the compliance of the bidders with the qualification criteria as established in the RFP, and to select preferred bidders based on the most competitive price and economic development commitments.

An independent governance team comprising governance advisers will monitor the entire evaluation process to ensure compliance with the policy and legislative requirements regarding this procurement process.

The IPP Office team does not participate in the evaluation, and its role is to facilitate, coordinate and manage the evaluation process and clarify any issues that may arise from the evaluation teams.

It is expected that about 40 to 50 external transaction advisers will be involved in the evaluation process, which will be undertaken “at a secure evaluation centre that complies with set governance and security requirements”.

“For this evaluation, we . . . also had to consider Covid-19 implications, and specific measures and protocols have been implemented at the evaluation centre to ensure the safety of the evaluation team,” the IPP Office has told Engineering News.

It is not yet clear how many preferred bidders will be named, but once they are, bidders have four months to achieve financial close, whereafter construction will begin.

“The preferred bidders are expected to complete the construction of the generation facility within 18 months from the signing of the project agreements. Some of the projects may be more ready than others to operate earlier. There is an incentive for projects to bring power as soon as possible through early energy payment,” the IPP Office adds.

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.