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 initial 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
The DMRE confirmed the postponement of the signing of power purchase agreements (PPAs) for projects selected as part of the controversial Risk Mitigation Independent Power Producer Procurement Programme on March 31.

A signing ceremony was expected to take place in Pretoria on March 31; the already delayed deadline for the projects to reach financial close.

The 11 projects were selected last year, with an initial financial close deadline of July 2021.

That deadline was extended initially to the end of September 2021, then to January this year and later to the end of March.

No new deadline has been provided.

The DMRE confirmed with Engineering News that the March 31 ceremony was postponed “due to outstanding matters and conditions to be addressed in respect of the PPAs with Eskom, and the need to provide the preferred bidders and their lenders adequate time to undertake due diligence reviews of the project agreements”. 

It did not elaborate on the outstanding matter, but Eskom has previously raised concerns about the lack of clarity on the maximum price methodology for gas.

The department also referred to a statement made by Minister Gwede Mantashe during the debate on President Cyril Ramaphosa’s 2022 State of the Nation Address (SoNA) in February 2022, which committed the department to concluding the PPAs for the project.

In his SoNA, Ramaphosa announced that only 800 MW of the nearly 2 000 MW in projects selected were ready to proceed.

This raised speculation that PPAs for the three powership projects – which comprise 1 200 MW of the 1 996 MW being procured and which have faced environmental authorisation, legal and licensing challenges – were unlikely to be signed by the end of March.

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.