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South Africa will procure 2 600 MW of IPP renewable energy around August 2021


South Africa outlines plan to curb power shortages

South Africa’s minister of Mineral Resources and Energy Gwede Mantashe outlined a raft of energy sector reforms on Tuesday in a move to mitigate SA’s power challenges

South Africa has been battling recurring power outages as state utility Eskom fails to meet Africa’s most industrialised nation’s power demand. The South African government has been implementing a raft of reforms to curb power shortages that have put energy supply security under threat. The government is opening up the energy sector to private players and subjecting Eskom to competition. The sector is currently dominated by embattled state utility Eskom which supplies over 90% of the nation’s power needs. 

Presenting his annual budget in parliament on Tuesday, South Africa’s minister of Mineral Resources and Energy, Gwede Mantashe said his department’s interventions have helped ensure that Eskom deals with its energy capacity shortages.

“In 2020, we committed to interventions to deal with electricity supply shortages. We undertook to rapidly increase energy generation capacity outside of Eskom.”

To date, the department has managed to implement a number of interventions, including:

  • The connection of 1 200 megawatts to the grid from projects signed under bid window 4 of the IPP Programme, with the remaining 1 000 megawatts planned to connect by not later than December 2021;
  • The approval of 8 preferred bidders with 3 recommended for appointment subject to them meeting specific value for money conditions. This initiative will deliver a total of 1 995 megawatts of power into the grid within the next 12 to 18 months;
  • Eskom’s procurement of 200 megawatts from Independent Power Producers under the Short-Term Power Purchase Programme;
  • The department, as part of Bid Window 5, issuing a Request for Proposals (RFP) for 2 600 megawatts from wind and solar energy technologies;
  • The department amending the Electricity Regulations on New Generation Capacity and clarified the requirements for municipalities when undertaking the process to develop or buy power from IPPs;
  • The department amending and gazetting Schedule 2 of the Electricity Regulation Act. In this amendment, the department has increased the threshold for registering embedded generation from 1 to 10 megawatts; and
  • NERSA registered 200 projects under one megawatt totalling 94 megawatts and licensed five projects above one megawatt.

“We have also noted with delight that the mining industry is also taking steps towards self-generation which is in support of our initiatives, to this extent Gold Fields will soon commence with construction of its licenced 40 megawatts,” said the Minister.

SA continues to pursue an energy mix

Mantashe says South Africa will continue to pursue an energy mix as espoused in the country’s energy blueprint, the Integrated Resource Plan.

Even though South Africa and the rest of the world are increasingly under pressure to mitigate against climate change, South Africa’s energy capacity is largely dependent on fossil fuels.

“In an alternative universe, one would immediately eliminate fossil fuel-generated energy such as coal and petroleum. However, this is not our reality, our reality is that we have vast reserves of coal and petroleum resources which we continue to exploit.

“Though this is the case, we are committed to a just transition and have begun investing in clean technologies to ensure that we transition from a high to low carbon economy, while ensuring security of energy supply.”

New procurement of energy

Minister Mantashe said in the coming months, his department will issue additional Requests for Proposals as follows:

  • 2 600 megawatts from renewable energy around August 2021
  • 513 megawatts from Storage around August 2021
  • 1 500 megawatts from Coal around December 2021
  • 3 000 megawatts from Gas around December 2021
  • 1 600 megawatts from renewable energy around January 2022.

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