Question NW7 to the Minister of Mineral Resources and Energy
04 March 2024 - NW7
Herron, Mr BN to ask the Minister of Mineral Resources and Energy
(1) Whether, with reference to his reply to question 2266 on 30 June 2023, and the reply of the Minister of Public Enterprises, Mr P J Gordhan, to question 2772 on 4 October 2023, regarding the announcement nearly three years ago on 18 March 2021 of the preferred bidders for the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) projects – in particular the three Karpowership projects at Coega, Richards Bay and Saldanha – and furthermore, with reference to the tender for the Gas Independent Power Producer Procurement Programme (GASIPPPP) issued on 14 December 2023 for 3000 megawatts (MW) to be generated from gas, his department has implemented the long stop date on 31 December 2023 as indicated by the Minister of Public Enterprises in his reply to question 2772, by which time the projects under the RMIPPPP would have had to achieve legal close; if not, why not; if so, which projects achieved legal close; (2) what is the status of the three Karpowership bids, given the appeals against the environmental authorisations; (3) whether the Karpowership bids have been cancelled when the projects have not achieved legal close; if not, why not; if so, (a) on what date(s) were the bids cancelled and (b) what are the relevant details in each case; (4) whether, given that the GASIPPPP makes provision for 2 000 MW to be procured from land-based gas-fired power generation facilities and makes special reference to facilities at Coega and within the uMhlathuze Local Municipality, the additional 1 000 MW at Coega and the specified local municipality in Richards Bay in KwaZulu-Natal is intended to provide a further opportunity for Karpowerships to bid and be included in the IPP programmes; if not, what is the position in this regard; if so, what are the relevant details; (5) given the continuing loadshedding and the urgency for additional generation capacity, what (a) measures has he implemented to ensure that preferred bidders from previous Bid Windows and the RMIPPPP reach legal close and commercial operation and (b) projects have reached commercial operation and total generation capacity has the projects contributed to electricity supply? NW7E
Reply:
With regard to (1), (2), (3) and (5)(a), all Preferred Bidders appointed under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) and the fifth bid window under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP Bid Window 5) were given an absolute deadline of 31 December 2023 to meet their specific conditions precedent to reach Legal and Commercial Close. Such conditions are at the Preferred Bidders’ own risk. Accordingly, the Department is applying all relevant steps in accordance with the provisions of the Request for Proposals (RFP).
With regard to (4) all IPP Procurement Bid Windows were implemented in line with public procurement prescripts on the basis of competitive bidding against specific requirements as stated in the Request for Proposals (RFP). The Department does not design procurement programmes based on specific potential bidders, but on the requirements of the System Operator. The Department released a 2000MW Gas to Power Bid Window on 14 December 2023 which specifies an exclusion in respect of any potential Project(s) located in the area known as Zone 13 near the Port of Ngqura, as it is envisaged that a separate procurement process will be undertaken for the establishment of a gas-fired new generation project at that location. The RFP specifications for the 1000MW Gas to Power IPP Progragmme at that location is still under development.
With regard to 5(b), by 31 December 2023, 95 IPP Projects are in operation and contributing 7362.2 MW to the national grid. A further 16 IPP Projects, totaling 1687MW, are currently in construction and are expected to start operations from September 2024 onwards.