- South Africa’s IPP Office has extended the submission deadline for country’s Gas IPP Procurement Programme (GASIPPPP) Bid Window 1 to 25th March 2025.
Background
The country’s Risk Mitigation and Gas IPP Procurement Programmes are procured in accordance with ministerial determinations promulgated by the then minister of mineral resources and energy, Gwede Mantashe, in consultation with the national energy regulator of South Africa, in line with the integrated resource plan.
The Risk Mitigation IPP Procurement Programme (RMIPPPP) determination was gazetted on 7 July 2020 to procure 2000 mw of new generation capacity from a range of energy source technologies. No gas power generation was procured under this programme due to a grossly incompetent and flawed adjudication process which saw preferred bidder status awarded Karpowership SA bid who did not have approved environmental impact assessments in place for their three port locations. Eventually Eskom pulled grid capacity allocation for all three projects. Read more
GASIPPPP Bid Window 1
The Gas IPP Procurement Programme (GIPPPP) determination was gazetted on 25 September 2020 to procure 3000 mw of new generation capacity from gas technologies. On 14 December 2023, the Department of Mineral Resources and Energy (DMRE) issued a request for proposals for the first round of the GASIPPPP Bid Window 1 which seeks to procure 2 000MW gas generated capacity from independent power producers (IPP’s).
A total of 2000 megawatts (MW) will be procured in this first round from Projects supplying new generation Capacity, Ancillary Services and Energy Output to be produced from gas-fired power generation technology to Eskom for 20 years. This Gas IPP Procurement Programme specifically targets land-based electricity generation facilities utilising natural gas, located anywhere within the borders of the Republic of South Africa. Read more
Related news: Preferred bidder announced for construction of Richards Bay LNG Terminal
Earlier this year a briefing with bidders was held which revealed more details on the bid window:
- The brief revealed that only 1000MW will be considered for Richards Bay where Eskom already has A 3000MW gas project under development. Read more
- Compliant projects must include 49% South African entity participation.
- Plant capacity range of between 300 MW and 1 000 MW in size will be considered which must operate at a maximum load commitment of 65% and a minimum of 40%, with Eskom to dispatch the facility in line with an agreed monthly load commitment.
- Bidders must provide term sheets with their natural gas suppliers which details fuel origin, the delivery point and security of supply for the 20-year PPA.
- The last day to submit applications to obtain a Cost Estimate Letters from Eskom is 29 February 2024 (previously 31 January 2024).
- Submission deadline for bidders is set for 30 August 2024.
- Project submissions will be adjudicated and awarded after over a four-month period.
- Successful bidders then have six months to reach financial close and 36 months to construct plant.
- The window rules out the conversion of existing diesel-fuelled open-cycle gas turbines plants to gas however projects can share infrastructure with existing facilities provided that such infrastructure has unconditional and irrevocable rights in the shared infrastructure.
On 19th July the IPP Office issued an update on GASIPPPPP BW1 notifying that due to a number of factors the deadline for submissions has been extended to 25th March 2025. See below:
IRP may affect gas capacity allocation
Under the country’s new government of national unity, the IPP Office now falls under the Ministry of Electricity and Energy headed by Dr Kgosientsho Ramokgopa. Ramokgopa is also responsible for the country’s Integrated Resource Plan (IRP). The draft IRP 2023 delivered by his predecessor, Gwede Mantashe, was grossly flawed and heavily weighted to gas power. Read more
Ramokgopa may change the gas power capacity allocation which could in turn affect the GASIPPPPP BW1 plus following rounds. This may be the underlying reason for the bid deadline extension.
Author: Bryan Groenendaal
