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, which is 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 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.
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 in the Northern Cape comprising solar PV technology and BESSs.
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 projects are expected to reach financial close by no later than the end of July 2021 and be connected to the grid from August 2022.
The Scatec projects are required to achieve financial close by the end of September 2021, with grid connection by the end of 2022.
Latest Developments
The Department of Forestry, Fisheries and the Environment (DFFE) has refused to provide Karpowership SA with environmental authorisation for its three powership-based gas-to-power projects, proposed for development at the ports of Richards Bay, Ngqura and Saldanha Bay.
The environmental-impact assessment (EIA) applications were submitted in October 2020, ahead of the closing date for bidding under the Department of Mineral Resources and Energy (DMRE) RMIPPPP.
On March 18, Mantashe named the eight preferred bidders under the 20-year RMIPPPP, including three fully imported Karpowership floating gas-fired power plants, which collectively secured 1 220 MW of the 2 000 MW on offer.
The announcement triggered legal action by a losing bidder and objections by environmental groups.
The final reports were submitted to the department for its decision on April 26, allowing the Competent Authority until June 25 to reach a decision, as the projects were classified as Strategic Integrated Projects, which meant a 57-day timeframe, as Gazetted in the National Infrastructure Act, applied.
In a statement released on June 24, the DFFEsaid that, after due consideration of all the relevant information presented as part of the EIA process, the Competent Authority in the department had decided to refuse the applications for environmental authorisation.
The reasons for decision indicate that Karpowership SA failed to comply with the prescribed National Environment Management Act requirements pertaining to public consultation, with the draft EIA reports having been subjected to public review for less than 30 days and the final reports submitted containing significant new information not canvassed during the public participation process.
They DFFE also noted that the actual and potential impacts on the environment, as well as socioeconomic impacts, particularly on small-scale fisheries, could not be fully evaluated, owing to an absence of proper underwater noise impact studies.
The DFFE statement indicates that any person wanting to lodge an appeal against the decision should be submitted to the appeal administrator.
In response, Karpowership SA has argued that the DFFE allowed for a misinformation campaign, funded by special interests, to derail the DMRE's strategic plan to end load-shedding and address South Africa’s economic and energy crisis.
The company has said that it conducted a robust public participation process, met all South Africa's stringent environmental requirements and that it was “confident that it will win the appeal against this decision”.
The DMRE, meanwhile, has noted the media statement by the DFFE announcing the decision not to grant environmental authorisations for Karpowership SA.
The DMRE has said that it will await formal communication by the preferred bidder on the decision by the DFFE before making any further pronouncements.
The Green Connection, which alleged that the EIA processes were flawed, welcomed the DFFE's decision to refuse all three environmental authorisations applications.
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.