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South Africa moves to procure 5GW of renewables, 2GW of gas-to-power, 615 MW of battery storage

14th December 2023

By: Terence Creamer

Creamer Media Editor

     

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The South African government has released three requests for proposals (RFPs) for new electricity generation and storage capacity, including 5 000 MW of new wind and solar, 2 000 MW of gas-to-power and 615 MW/2 460 MWh of battery storage.

Under the much anticipated and delayed seventh bid window (BW7) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the Department of Mineral Resources and Energy (DMRE) is seeking bids by April 30 for the development of 3 200 MW of wind and 1 800 MW of solar photovoltaic (PV).

The inaugural Gas Independent Power Producer Procurement Programme (GIPPPP), meanwhile, has been launched on a site-agnostic basis, with the DMRE indicating that a separate procurement process will be held for 1 000 MW of capacity to be developed near to the Port of Ngqura, in the Eastern Cape.

A closing date for bid submissions has been set as August 30 for the GIPPPP, which is targeting land-based electricity generation facilities.

The DMRE is aiming to announce preferred bidders three months after the bid submission deadline and states that financial close will follow about four months after the preferred-bidder announcement.

The second bidding round for the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP), is seeking facilities with a minimum size of 77 MW and a maximum size of 153 MW, all with four hours storage.

The procurement round calls for eight storage facilities within close proximity to Eskom-selected transmission substations in the ‘Northwest Supply Area’, namely: Mercury, Carmel, Hermes, Ngwedi, Midas, Marang and Bighorn substations.

The BESIPPPP stipulates a minimum availability of 95% over 8 760 hours per contracted year and the facilities will be expected to provide instantaneous, regulating and supplementary reserves.

On November 30, the DMRE announced the names of the preferred bidders arising from the first BESIPPPP round and also reported that it was in negotiations for a project at a fifth site.

The four installations are all earmarked for development in the Northern Cape and will have a combined capacity of 360 MW/1 440 MWh, as well as a combined investment value of R10-billion.

The three RFPs are the first to be initiated following the partial failure of REIPPPP BW6, during which only preferred bidders for a 1 000 MW solar PV allocation were selected from a round that expected to procure 4 200 MW.

This, after Eskom indicated that the grid connection capacity that formed the basis for 23 wind bids vying for a 3 200 MW allocation had been absorbed by independent power producers (IPPs) pursuing private power purchase agreements.

The development led to Eskom adopting new interim rules for the issuance of grid connection cost estimate letters and budget quotes from the ‘first come, first served’ model that had been used previously to a so-called ‘first ready, first served’ approach, and to flag that it intended moving to a gated process in future.

In a statement confirming the three tenders, the DMRE urged prospective bidders to take note of the available grid capacity in the different areas of supply as indicated in the 2025 Generation Connection Capacity Assessment (GCCA), which was published by Eskom in late October.

No mention was made of a proposed addendum to the GCCA outlining a curtailment framework, which could open up grid capacity in those areas that are currently shown in the GCCA as having no further capacity to evacuate new electricity.

As had become the norm with government’s approach to IPP bids, prospective bidders would be required to pay a non-refundable fee of R25 000 for access to the RFP for each project submission.

The department reported that it would convene Bidders’ Conferences in respect of the three bid windows, which would be hosted on an e-platform on January 17 and 18, to provide more information on the qualifying criteria and bid submission expectations.

Edited by Creamer Media Reporter

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