Explanation of the tender process for emergency electricity

The Risk Mitigation Independent Power Producer Supply Program does not specify what type of technology must be purchased to deliver power. Image: Pixabay.

In addition to releasing Sector 34 Energy Ministry’s decision to acquire 11,813 MW of electricity by 2022, the Mineral Resources Ministry has also convened a bidders conference to address the country’s emergency needs. in terms of electricity supply.

DMRE hosted the virtual conference on September 25 to explain the recently launched Risk Mitigation Independent Power Producer Supply Program (RMIPPPP).

The department said in a statement that the conference brought together more than 1,000 delegates, including registered and other interested bidders, project developers, financiers and stakeholders from the energy sector.

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South Africa’s Integrated Resource Plan (IRP2019) indicates a short-term electricity supply deficit of around 2,000 MW between 2019 and 2022.

Eskom itself says it needs 4,000 MW in the short to medium term to cope with the country’s electricity supply crises. This RMIPPPP is a direct response to close the declared supply gap of 2,000 MW and reduce the use of costly diesel-based peak electric generators in the medium to long term.

The IPP office states that the RMIPPPP is “an innovative approach that once again places South Africa at the forefront of global innovation in electricity supply”.

The innovative and defining part of this emergency procurement program is a one-of-a-kind, results-based Request for Proposal (RFP) that calls for an optimal solution to meet network requirements without prescribing the technology to be used.

Eskom, as the system operator, specifies the system requirement stating only that the solution must be “a flexible and distributable generation capable of operating between 5:00 am and 9:30 pm. This completes the daily demand profile and is in line with the load shedding times we know. The solution must also be able to supply energy, capacity and ancillary services to Eskom ”.

Electricity procurement process pushes Eskom to search for a low-cost hybrid solution

Another critical element of the RFP design is affordability in terms of reducing the cost of the new power supply for both Eskom and the end user.

Thus, the tender allows for a portfolio approach – “a developer can bid on a portfolio of two other facilities, which will constitute a project”. The project can therefore include one of the following elements:

  • A single installation using a single technological solution on a single project site;
  • Multiple facilities using different technological solutions (eg, fuel-based and fuel-less production) on a single project site; Where
  • Several installations using different technologies, on several project sites.

The minimum subscribed capacity of a project will be 50 MW and the maximum subscribed capacity will be 450 MW, subject to the availability and evacuation capacity of the transmission at the connection point.

Thus, this RMIPPPP hopes to attract projects that are either fully developed or almost ready and able to connect and provide electricity quickly without requiring major works to integrate them into the national grid.

The IPP office also pointed out that the procurement program is designed to boost the South African economy not only by adding more capacity to the existing national grid, but also by providing socio-economic transformation along the entire supply chain. value of a project.

The RMIPPPP economic development framework is based on the dashboards previously used under the REIPPP program, but modified to be more in line with the modified BBBEE codes.

The DMRE has indicated that the bid closing date for the RMIPPPP is November 24. Preferred Bidders are expected to be announced in December 2020, with commercial and financial close expected within four months of the Preferred Bidders announcement.

More information on the RMIPPPP is available online.

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