Busy week for DMRE as it hosts IPP bidders conferences and IRP workshop

15th January 2024 By: Terence Creamer - Creamer Media Editor

Busy week for DMRE as it hosts IPP bidders conferences and IRP workshop

The Department of Mineral Resources and Energy (DMRE) and the Independent Power Producer Office (IPPO) have a busy week ahead, with three virtual bidders conferences to be hosted over Wednesday and Thursday, and with the department also scheduled to host a public workshop on the draft 2023 edition of the Integrated Resource Plan (IRP 2023).

The bidders conferences follow the release, on December 14, of three new requests for proposals (RFPs) for the public procurement of 7 615 MW of new generation capacity from wind, solar photovoltaic (PV), gas to power and battery energy storage technologies.

Under Bid Window Seven (BW 7) of the Renewable Energy Independent Power Producer Procurement Programme, the DMRE is seeking to procure 5 000 MW of new renewable energy, comprising 3 200 MW of onshore wind and 1 800 MW of solar PV.

The bid window is the first launched following the partial failure of BW 6, when only solar preferred bidders, with a combined capacity of 1 000 MW, were selected after Eskom informed the wind bidders, which had been vying for a 3 200 MW allocation, that their grid capacity at the locations proposed for connection had been fully absorbed.

These grid constraints will remain a key backdrop to BW 7 and could force bidders to propose projects in areas with less potent resources, but where there is remaining capacity to connect.

It is not yet clear whether grid-releasing curtailment will be integrated into the round, with Eskom having confirmed in December only that a curtailment framework had been presented to the National Energy Regulator of South Africa for approval.

In October, Eskom published its latest Generation Connection Capacity Assessment (GCCA), indicating there to be 19.9 GW of grid-connection capacity available nationally, but with zero capacity remaining in the three Cape provinces and the Hydra Central area, which borders the Cape provinces and the Free State. It later indicated that a curtailment addendum to the GCCA would be published that could unlock 4 GW of connection capacity in the Eastern and Western Cape provinces.

Bidders are expected to be provided with additional information on the approach that will be taken to the prevailing grid constraint during a virtual bidders conference, which is schedule for 9:00 on January 18.

At 14:00 on the same day, a virtual bidders conference is also planned for the second bid window of government’s Battery Energy Storage IPP Procurement Programme, or BESIPPPP BW 2, following the recent unveiling of preferred bidders following the inaugural bidding round.

On November 30, four utility-scale battery energy storage system projects in the Northern Cape, with a combined investment value of R10-billion, were named as preferred bids, while negotiations were continuing with a fifth bidder.

Through BESIPPPP BW 2, government is seeking to procure 615 MW/2 460 MWh across eight substations in the ‘North West Supply Area’.

At 9:00 on January 18, meanwhile, a virtual conference is planned for government’s inaugural 2 000 MW Gas Programme, or GASIPPPP BW 1, the RFP for which was also released in December.

GASIPPPP BW 1 has been launched on a site-agnostic basis, with the DMRE indicating that a separate procurement process will be held for 1 000 MW of capacity to be developed near to the Port of Ngqura, in the Eastern Cape.

The gas programme was launched just ahead of the DMRE’s release of the draft IRP 2023 for public comment.

The document includes a far larger allocation for gas for the period to 2030 than is the case in the current IRP 2019; a position that not only reduces the renewables allocation for the period relative to the current IRP but which is likely to face heavy scrutiny and criticism from many of those who will comment on the plan ahead of the February 23 deadline for written comments.

The DMRE has not provided for oral hearings as has been the case previously and has instead only set aside two dates for public workshops, with the first workshop scheduled for the afternoon of January 18.

The DMRE says the bidders conferences will allow all stakeholders to engage with members of the DMRE and IPPO on the RFPs, which are available only to prospective bidders that pay a non-refundable fee of R25 000 for access to the RFP for each project submission.