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 solar and 225 MW/1 140 MWh battery storage, based on sites in the Northern Cape.

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 eight projects is estimated at R45-billion.

Planned Start/End Date
The initial eight projects were expected to reach financial close by no later than the end of July 2021 and be connected to the grid from August 2022.

Latest Developments
Mineral Resources and Energy Minister Gwede Mantashe has confirmed that not all the 11 RMIPPPP preferred bidders will be in a position to conclude power purchase agreements (PPAs) at the end of March 2022, the deadline for the projects to reach financial close.

The initial financial close deadline of July 2021 was extended initially to the end of September, then to January 2022 and, finally, to the end of March.

Mantashe has said that steps are being taken to address a current supply shortfall that South African President Cyril Ramaphosa has said to be estimated at 4 000 MW, but which several commentators believe to be closer to 6 000 MW.

The Minister has said that PPAs will be signed next month with RMIPPPP preferred bidders, which were selected as part of an emergency, albeit much delayed, procurement round for 2 000 MW.

In his State of the Nation Address on February 10, Ramaphosa announced that only 800 MW of the 2 000 MW in projects selected under the RMIPPPP were ready to proceed.

For the Karpowership projects, which comprise about 1 200 MW of the RMIPPPP allocation, there is speculation that the projects, which face legal, environmental and gas-pricing uncertainty, are among those that are not ready to proceed.

Meanwhile, the 2 600 MW of renewable energy being procured under Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme will enter into PPAs in April. Bid Window 6, for another 2 600 MW of wind and solar, will be launched at the end of March.

“Thereafter, additional bid windows, including Bid Window 7, will follow at six-month intervals,” Mantashe has said.

Further, a request for proposals for 513 MW of battery storage is expected to be released in April.

No specific timeframes have been provided for the launch of procurement processes for gas-to-power and so-called clean-coal, as catered for in the Integrated Resource Plan of 2019.

Mantashe has stated that government will address suspensive conditions set by the National Energy Regulatory of South Africa “before we can issue a request for proposal for 2 500 MW of nuclear energy”.

The DMRE recently published a terms of reference document for a service provider to develop a framework for the procurement of new nuclear capacity. The tender will close on February 25.

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.