Opening of South Africa’s procurement tender of 5000MW in REIPPPP Bid Window 7 remains a mystery

  • On Tuesday 16 May this year, South Africa’s Mineral Resources and Energy (DMRE) Minister, Mr Gwede Mantashe,  told Parliament that government will open a bid in July to procure additional renewable energy. 
  • Mantashe, who was delivering his Budget Vote speech for the 2023/24 financial year, said Bid Windows 7 and 8 will each give 5 000MW of renewable energy. Read more 
  • July has come and gone without a bid window announcement.
  • There has been no announcement or update from IPP office or the DMRE on when REIPPPP Bid Window 7 will open. 

“The requests for proposals for the procurement of this capacity will be issued to the market in the second and fourth quarter of this financial year respectively,” said Mantashe. In addition, he said the second and fourth quarters will see further requests for proposals for the procurement of battery storage with a capacity totalling 1 230MW.

He added that a request for proposals for the procurement of gas-to-power, totalling 3 000MW, will be issued in the second quarter and a bid for proposals for the procurement of 2 500MW of nuclear energy will be open in the fourth quarter.

Mantashe, a staunch communist and a big fan of power produced from coal, has been largely accused of delaying the government’s new generation energy procurement programmes. Under his leadership there has been controversy, accusations of corruption and multiple deadline extensions in procuring new energy generation capacity. Read more

Since his appointment is 2019, Mantashe has introduced three large procurement programmes aimed at adding in excess of 8000MW of new generation capacity to the countrys’ grid but not a single electron has flowed into the grid from these programmes to date. Read more  

South Africa is in a massive energy crisis and is in desperate need of new generation capacity. South Africans face up to 16 hours of blackouts daily this winter. Read more

South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was once globally respected at the best model in the world for emerging market countries. Credibility has however deteriorated swiftly under the leadership of Mantashe.  

Only 56 bids were received for the country’s REIPPP Bid Window 6. This marks a dramatic decline in bids by around half compared to Bid Window 5 which was massively oversubscribed, attracting a total of 102 bids. Only five Preferred Bidders with projects totalling 860MW were appointed under the 6th Bid Window of the REIPPPP.

No wind projects awarded in REIPPPP Bid Window 6.  The Department received Onshore Wind bid responses amounting to 4116 MW for the Bid Window 6, all of which are located in the Eastern Cape and Western Cape supply areas. Following the confirmation from Eskom during the evaluation that no grid capacity was available to connect any proposed Onshore Wind projects in these supply areas, the Department could unfortunately not award any of the wind projects up to the allocated 3200 MW under the bid window.

Since then, Mantashe appears to be adding preferred bidders piecemeal without any public announcements. Read more

In related news Bloomberg reports that Eskom has extended the grid access rights to Turkey’s Karpowership SA and Denmark’s Copenhagen Infrastructure Partners owned, Mulilo. Both companies were awarded preferred bidder status in South Africa’s controversial Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) where projects have struggled to reach financial close since July 2021. The ANC set to benefit directly from the Karpowership SA deal.

Author: Bryan Groenendaal

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