Name of the Project
Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
Location
South Africa.
Project Owner/s
Department of Mineral Resources and Energy (DMRE).
Project Description
The RMIPPPP, also known as the ‘emergency’ procurement round, is a response to the short-term electricity supply gap identified in the Integrated Resource Plan 2019.
The objective of the RMIPPPP is to not only alleviate the current electricity supply constraints but also reduce the use of diesel-based peaking electrical generators.
The programme aims to procure 2 000 MW from a range of energy sources and technologies.
The DMRE issued a request for proposal for the RMIPPPP in August 2020.
Mineral Resources and Energy Minister Gwede Mantashe released the names of the eight preferred bidders on March 18, 2021:
- the 150 MW ACWA Power Project DAO – a hybrid facility comprising solar photovoltaic (PV) and a battery energy storage system (BESS);
- a 450 MW Karpowership SA Coega facility – a gas-to-power plant based on imported liquefied natural gas (LNG) – in the Northern Cape;
- the 450 MW Karpowership SA Richards Bay facility – a gas-to-power plant, based on imported LNG – in the Northern Cape;
- a 320 MW Karpowership SA Saldanha facility – a gas-to-power plant, based on imported LNG – in the Northern Cape;
- the 198 MW Mulilo Total Coega facility – a hybrid plant employing solar PV and imported LNG;
- the 75 MW Mulilo Total hydra storage project – a hybrid facility comprising solar PV and a BESS;
- the 128 MW Oya Energy hybrid facility – a hybrid facility comprising solar PV, wind and a BESS, in the Northern Cape; and
- the 75 MW Umoyilanga Energy – a hybrid facility comprising solar PV, wind and a BESS, Northern and Eastern Cape.
Umoyilanga Energy will operate as a virtual power plant, combining generation from two sites that are 900 km apart. Avondale, in the Northern Cape, will include 115 MW of solar PV and 30 MW of battery storage, while Dassiesridge, in the Eastern Cape, will incorporate 63 MW of wind and 45 MW of battery storage.
To meet its 75 MW dispatchable profile, Dassiesridge will charge batteries from the wind energy at night and discharge power in the morning until the sun rises. The solar installation at Avondale will supply the bulk of the energy during the day, supplemented by wind energy from Dassiesridge. Excess solar energy will be used to charge the batteries at Avondale, which will discharge after sunset.
In June 2021, the DMRE announced the appointment of three additional preferred bidder projects under the RMIPPPP, following the completion of “value for money” negotiations with Norwegian renewables power producer Scatec.
To meet the dispatchable profile demanded under the RMIPPPP, the three projects – Kenhardt 1, Kenhardt 2 and Kenhardt 3 – will together produce 540 MW of solar and 225 MW/1 140 MWh battery storage.
Scatec has indicated that the projects are the only ones selected under the RMIPPPP that rely exclusively on renewable energy, making the three-project portfolio arguably one of the biggest single-site solar-storage hybrids in the world.
The projects will include average local content of 50% during construction, South African entity participation of 51% and black ownership of 41%.
Potential Job Creation
The Oya Energy hybrid facility and Umoyilanga Energy will contribute 3 966 job-year opportunities in the construction and operation of these power plants.
Capital Expenditure
The combined investment value of the initial eight projects is estimated at R45-billion.
The Oya Energy hybrid facility and Umoyilanga Energy projects have a combined investment value of R14.6-billion.
Planned Start/End Date
The Oya Energy hybrid facility and Umoyilanga Energy projects are expected to be online from 2025 onwards.
Umoyilanga Energy achieved financial close in November 2023, with construction starting immediately. Commercial operations are expected in May 2025.
Latest Developments
Environmental activist nonprofit organisation the Green Connection has taken the National Energy Regulator of South Africa (Nersa) and the Department of Mineral Resources and Energy (DMRE) to court to “force” them to supply key information regarding the Karpowership deals. Green Connection claims that Nersa granted the licence approvals for the deals unlawfully.
The three local Karpowerships entities – Karpowership SA Coega, Karpowership SA Saldanha Bay and Karpowership SA Richards Bay – have withdrawn their opposition and have indicated that they will abide by the court’s decision, Green Connection has stated.
Karpowership was selected by the DMRE, in March 2021, as a preferred bidder under the RMIPPPP. The three projects have, however, faced various delays.
“Since the start, the Karpowerships deals were mired in controversy, characterised by . . . irregularities. This court case . . . aims to force Nersa to share more details regarding the Karpowerships deals, which we need to support our larger challenge, and which the regulator refuses to make available.
“For instance, we need costing information to better understand how the price of electricity could be affected . . . With what has happened in Sierra Leone and Guinea-Bissau, where Karpowerships cut power for extended periods due to these countries’ inability to pay their electricity bills, it is clear that South Africa, which already has so many other challenges, should know what we are getting ourselves into,” Green Connection strategic lead Liz McDaid said on June 5.
For more than three years, the nonprofit organisation has been opposing Karpowerships as a solution to South Africa’s energy crisis. The organisation said this was not simply about the financial costs associated with this technology but rather about its potential to cause harm to the environment and the potential negative ripple effect this could have on the livelihoods of those who depend on it.
“South Africans need transparency about such projects so that we can fully understand the consequences of decisions that could affect our lives and livelihoods, especially when it affects communities who continue to be marginalised. The people have the right to say no when we believe that a project will do more harm than good,” Green Connection legal and outreach adviser Priyanka Naidoo said.
“We do not have the infrastructure needed for Karpowerships at the designated ports. This means there may be a major financial burden to taxpayers if we opt to go ahead with it,” fellow environmental activist organisation Earthlife Africa programmes officer Ulrich Steenkamp said on June 4.
He added that, although South Africa had an electricity shortfall, it would be a mistake to get tied into a contract with the fossil fuel industry.
“We should rather be accelerating and investing in renewable energy so that our just transition targets can be achieved as soon as possible. This is the main reason that Earthlife Africa supports the Green Connection’s court case,” Steenkamp said.
Key Contracts, Suppliers and Consultants
Scatec (Kenhardt 1, Kenhardt 2 and Kenhardt 3); G7 Renewable Energies, ENGIE, Meadows Oya Energy and Perpetua RMI4P (Oya Energy hybrid facility); and EDF Renewables and Perpetua Holdings (Umoyilanga Energy).
Contact Details for Project Information
DMRE, Natie Shabangu, email natie.shabangu@dmre.gov.za; or Thandiwe Maimane, email thandiwe.maimane@dmre.gov.za; mediadesk@dmre.gov.za.