2000MW IPP PROGRAMME IN SOUTH AFRICA

By Andrew van Niekerk,Patrick Hirsch,Claire Tucker Thursday, July 09, 2020
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On 7 July 2020 the long-awaited Determination under section 34 of the Electricity Regulation Act was published for 2000MW of new generation capacity, by Minister Mantashe, Minister of Mineral Resources and Energy.

The Determination is understood to support procurement of ‘emergency’ power as offered to the Department of Mineral Resources and Energy (DMRE) under the Request for Information (RFI) put out to the market in December 2019. Parliament was informed in February 2020 that the DMRE received 481 responses to the RFI that included options for gas, liquid fuels, coal, renewables, storage and nuclear.

The Determination has a few interesting characteristics:

  • it is ‘technology agnostic’ allowing procurement from a ‘range of energy source technologies’;
  • it requires connection to the grid by December 2021;
  • it retains Eskom as the buyer of all power procured; and
  • power must be procured from IPPs.

The Determination will enable the commencement of a procurement programme for this power by the DMRE. It is the first for new IPP procurement to be published by the DMRE since Minister Mantashe took office. 

At the end of May 2020 when Minister Mantashe announced that the National Energy Regulator of South Africa (NERSA) had concurred with the Determination, he indicated that the RFP was being finalised and would be released in July 2020.

Click here to access the Determination.