South Africa announces preferred bidders for a technically neutral tender of 2 GW – pv magazine International
The tender aims to procure 2 GW of capacity in response to the chronic short-term electricity supply shortfall affecting the country and its mining sector. The South African government has selected three LNG projects that can secure around 60% of the allocated capacity, as well as several renewable energy projects, including solar, wind and storage. The procurement resulted in a lowest bid of $ 0.0998 / kWh.
March 22, 2021
The South African Ministry of Natural Resources (DMRE) has published the Preferred Bidders List for a technology-neutral procurement of 2 GW of short-term risk mitigation capacity called RMIPPPP (Risk Mitigation Independent Power Producers Procurement Program) to see solar among competing technologies.
“The submission of offers was completed on December 22, 2020 and attracted a total of 28 offer responses with a potential contractually agreed capacity of approx. 5,117 MW,” said a statement by the DMRE. “The evaluation process led to the selection of eight preferred offers with a total output of 1,845 MW and three other eligible offers with a total output of 150 MW.”
The eight preferred bidders are: ACWA Power Project DAO; Karpowership SA Coega; Karpowership SA Richards Bay; Karpowership SA Saldanha; Mulilo Total Coega; Mulilo Total Hydra Storage; Oya Energy Hybrid Facility; and Umoyilanga Energy. The DoE said these specialty vehicles submitted projects based on solar PV, wind, liquefied natural gas (LNG) and battery storage without specifying the technologies sponsored by each of the bidders.
The offer prices range from ZAR 1,468 (USD 99.8) per MWh to ZAR 1,885 per MWh, with an average price of ZAR 1,575 per MWh. “These eight projects will bring a total private sector investment of R45 billion to the South African economy, with an average local salary of 50% during construction,” said the DMRE. “The participation of South African companies in these projects is 51%, the participation of blacks 41%.”
According to Chris Ahlfeldt, energy specialist at Blue Horizon Energy Consulting Services, around 60% of the tendering capacity was awarded to several floating power plants operated with LNG. “It’s hard to understand how these floating power plants can compete with clean energy projects in terms of price and local content,” he said pv magazine. “Hopefully we will learn more about bid amounts and terms when DMRE makes this information available to the public soon.”
It would be helpful to know how the solar PV, wind and battery projects competed in price with the three LNG projects, he added. “A 20-year PPA is a long term contract for a floating LNG facility, so it will be interesting to see if these projects can actually reach a financial close given the environmental and economic risk they pose to the country.”
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