Four projects under the government-backed risk mitigation energy procurement round, with combined dispatchable capacity of 1,400MW, have lost the grid connection capacity that Eskom previously reserved for these projects.
They include Karpowership SA’s controversial gas-to-power floating power plants at the ports of Richards Bay, Coega and Saldanha, which have struggled to get the environmental authorisation needed to reach commercial close.
Eskom said on Friday that the budget quotes it had issued for these projects, which won their bids in 2021, expired on December 31 and no further extensions would be granted.
The expiration of the budget quotes means the grid capacity that was reserved for these projects “will revert to the pool of available capacity”.
This grid capacity, said Eskom, will now be allocated per the Interim Grid Capacity Allocation Rules to “other projects that are ready to connect and generate much-needed electricity”.
This will free up about 1,000MW worth of grid capacity in the Northern, Eastern and Western Cape, where demand for capacity is the highest and availability the lowest.
The Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) was launched by the department of mineral resources & energy in 2020. The three projects from Karpowership SA, as well as one project (consisting of a gas-to-power plant in a solar PV plant) owned by energy company Mulilo and TotalEnergies, were among the 11 preferred bidders selected for the RMIPPPP in 2021.
Seven of the projects have since reached financial close and have moved to the construction phase. But, said Eskom, the five budget quotes for the grid integration of the remaining four projects, which have so far failed to reach commercial close, expired on December 31 and would not be extended further.
“This is after several budget quote validity period extensions were requested and granted by Eskom in an effort to assist in ensuring the success of these projects,” the utility said.
The four projects were originally expected to reach commercial close at the end of July 2021.
Eskom said the expiration of the budget quotes is regrettable as these projects were aimed at bringing much-needed additional generation capacity to the grid to “alleviate pressure on the power system and minimise the impact of load-shedding”.
However, it said, Eskom’s governance process requires projects to be delivered within approved timelines, scope and costs.
“The affected budget quotes have been extended for periods ranging between 20 months and 30 months. Furthermore, the costs, timelines and scope of work(s) indicated in the budget quotes are no longer valid beyond December 31 2023,” said Eskom.
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