South Africa reveals preferred bidders for 2 GW tech-neutral tender

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The South African Department of Mineral Resources (DMRE) has published the list of the preferred bidders for a tech-neutral procurement of 2 GW of short-term risk-mitigation capacity, called Risk Mitigation Independent Power Producers Procurement Programme (RMIPPPP), which is seeing solar among the competing technologies.

“The bid submission closed on 22 December 2020 and attracted a total of 28 bid responses with a potential contracted capacity of approximately 5,117 MW,” the DMRE said in a statement. “The evaluation process has resulted in the selection of eight preferred bids totaling 1,845 MW and a further three eligible bids totaling 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 special purpose vehicles submitted projects based on solar PV, wind, liquified natural gas (LNG) and battery storage without specifying the technologies promoted by each of the bidders.

The bidding prices range from ZAR 1,468 ($99.8) per MWh to ZAR 1,885 per MWh, with the average price at ZAR 1,575 per MWh. “These eight projects will inject a total private sector investment amount of R45 billion to the South African economy, with an average local content of 50% during the construction period,” the DMRE explained. “South African entity participation from these projects is 51% with black ownership at 41%.”

According to Chris Ahlfeldt, an energy specialist at Blue Horizon Energy Consulting Services, around 60% of the tender capacity was awarded to several floating power plants fueled by LNG. “It’s difficult to understand how these floating power plants can compete on price and local content with clean energy projects,” he told pv magazine. “Hopefully, we’ll learn more about the bid amounts and terms if DMRE releases this information to the public soon.”

It would be helpful to learn how the solar PV, wind and battery projects competed on price with the three LNG projects, he added. “A 20 year PPA is a long contract term for a floating LNG plant, so it will be interesting to see if these projects can actually reach financial close considering the environmental and economic risk they create for the country.”

 

 

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