Minister of mineral resources and energy Gwede Mantashe has welcomed the decision by SA’s energy regulator to concur with his decision to procure another 11,813MW from independent power producers (IPPs).
The National Energy Regulator of SA’s (Nersa) decision, which arose from a determination under the Electricity Regulation Act by Mantashe, edges the process of procurement of new energy slowly forwards as the country experiences crippling power cuts due to electricity supply constraints.
It is nearly a year since the Integrated Resource Plan (IRP) — the government’s long-term plan to meet projected energy demand — was published, laying the basis for the 11,813MW procurement.
“This is another milestone that gives effect to commitments made by President Cyril Ramaphosa in his 2020 state of the nation address to increase generation capacity, and ensure security of energy supply to society rapidly and significantly,” Mantashe said in a statement.
It is now up to the department to issue a request for proposals (RFP) from potential providers to begin the bidding process. The department hopes that this additional capacity will become available by 2022. However, timelines are tight as the process of bidding and financial contracting typically takes at least 18 months after the RFP is issued and must be in place before construction can begin.
The department said that the determination will open-up various bid windows, including bid window 5 for renewable energy. According to the IRP, 6,800MW is to be generated from renewable energy sources; 513MW from storage; 3,000MW from gas; and 1,500MW from coal.
This IRP procurement is in addition to the 2,000MW of “emergency power” for which the department has already issued an RFP. The 2,000MW is also anticipated to come on line by June 2022.
This leaves SA with a significant power gap of at least 2,000MW for at least the next two years. This is based on optimistic modeling by Eskom and the department, which have overestimated the reliability and capacity of Eskom’s existing plants. The Council for Scientific and Industrial Research has performed modeling that projects a 4,000MW to 6,000MW shortage over the next four years.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.