The South African Department of Mineral Resources and Energy (DMRE) has issued a request for proposal (RfP) under its the Risk Mitigation Independent Power Producers Procurement Programme (RMIPPPP). The tender is intended to procure 2 GW of capacity in response to the chronic short-term electricity supply gap that is affecting the country and its mining sector.
The solicitation is open to various energy sources and technologies, provided that the plants become fully operational by the end of June 2022. Renewables are also entitled to compete. According to the announcement, the proposed technical solutions will have to be dispatchable and be able to provide a range of support services to the grid system operator. “The objective of the RMIPPPP is, not only to alleviate the current electricity supply constraints, but also, to reduce the utilisation of diesel-based peaking electrical generators,” the DMRE said.
The tender is aimed at reducing South Africa’s dependence on Eskom for power supply. The troubled utility, which is currently unable to meet the country’s power demand due to financial and operational issues, recently began considering renewables for its plant portfolio. It launched a tender for the deployment of 80 MW/ 320 MWh of energy storage capacity at its Skaapvlei substation in the Western Cape region in August, and another tender to repurpose coal plants with low-carbon growth tech in April. This tender, together with another one for a small solar project issued in October, follows the recent publication of South Africa’s new Integrated Resource Plan (IRP), which aims for up to 6 GW of new large-scale solar by 2030 as well as up to 6 GW of distributed-generation capacity.
Power projects selected in the tender will have to begin commercial operations by the end of June 2022. The RFP is expected to attract investment in the region of around ZAR 40 billion (USD 2.4 billion/EUR 2 billion), the government estimates.
REGlobal’s Views: Although the 2 GW short-term risk mitigation capacity procurement is technology-neutral, it may be favorable to solar PV in particular, as it can be deployed within months to help address the supply gap and the LCOE for solar PV is lowest among all available options. Already, a large number of South African businesses are resorting to solar and renewables to improve their power supply.