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. However, the deadline for financial close has been shifted to September 30, owing to several processing delays.
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
One of the preferred bidders participating in the RMIPPPP has confirmed that government has delayed the deadline of financial close to end of January 2022.
The delay was reported, but not officially confirmed, on September 30, which was set as the deadline for financial close.
“Construction start for Scatec’s 540 MW-plus storage project is, therefore, expected in the first quarter 2022,” the Norwegian company has said in a statement.
Engineering News & Mining Weekly approached the IPP Office and the DMRE for an update on the status of the RMIPPPP on September 30, but had not received a response ahead of the release of the Scatec statement.
The initial eight preferred bidders, named by Mantashe on March 18, were meant to reach financial close on July 31, but were given an extension to September 30, a date that coincided with the financial-close deadline for the three additional preferred bidders selected on June 1.
The 20-year programme, which controversially includes three gas-to-power powership projects, has been dogged by environmental and legal challenges.
However, on September 21, the National Energy Regulator of South Africa approved the issuance of generating licences for seven RMIPPPP projects, despite some of the projects lacking environmental authorisation.
The projects approved by the regulator are Oya Energy, Umoyilanga, ACWA Power Project DAO, Mulilo Total Hydra Storage, Karpowership SA Coega, Karpowership SA Richards Bay and Karpowership SA Saldanha.
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.