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Takeaways from the South Africa’s Gas Power IPP Procurement Programme BW1 briefing

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The port of Richards Bay. Image credit: Transnet National Ports Authority
  • The Department of Mineral Resources and Energy (DMRE) hosted a briefing yesterday for the first round of the Gas IPP Procurement Programme (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

Main takeaways from the brief:

  • 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.

Link to the full REQUEST FOR QUALIFICATION AND PROPOSALS (RFP) UNDER THE GAS INDEPENDENT POWER PRODUCER PROCUREMENT PROGRAMME (GASIPPPP) BID WINDOW 1 HERE

Author: Bryan Groenendaal

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