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Risk Mitigation Independent Power Producer Procurement Programme, South Africa – update

Image of a Karpowership

Photo by Karpowership

12th May 2023

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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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.

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 SA has withdrawn an environmental-impact assessment (EIA) report for its proposed Saldanha Bay project, which forms part of its application for environmental authorisation.

With the withdrawal of this document, its application for environmental authorisation has lapsed, according to the Department of Forestry, Fisheries and Environment (DFFE).

The company withdrew because it did not submit a generic Environmental Management Programme document for the Saldanha application.

Karpowership anticipates that, similar to its proposed plant at the Port of Ngqura within the Coega Special Economic Zone, in the Eastern Cape, it will be required to submit this document.

It did not do this for the 450MW plant in Coega, and its environmental authorisation for this project was denied.

Karpowership has since submitted an appeal for the decision on the Coega project and has requested an extension or condonation – in terms of Section 47(c) of the National Environmental Management Act – to allow for its submitting the generic EMPr.

Subsequently, the Saldanha Bay EIA report was withdrawn to allow the department to process the condonation application for the Coega project.

"This S47c application, if approved, will allow [for] the submission of a pre-approved generic EMPr following a 30-day public consultation process on the document," a Karpowership spokesperson has said.

Karpower has encountered several hurdles, among these environmental authorisation that was initially denied, owing to issues with its public consultation process.

It was granted another chance to submit its EIA reports for the projects following new rounds of public consultations in 2022.

Similar to the other two projects, which are being delayed because of technicalities, Karpowership withdrew the EIA report for Richards Bay so that it could comply with or meet regulatory requirements.

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.

Edited by Creamer Media Reporter

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