South Africa’s Renewable Energy Plans Hit Roadblock As Eskom’s Quotes Expire

In a recent announcement, Eskom, South Africa’s primary electricity supplier, conveyed the expiration of budget quotes for the grid integration of four projects under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). Launched in 2020 to address the nation’s energy challenges, the RMIPPPP aimed to procure 2,000MW from various dispatchable technologies, including gas, solar PV, wind, battery energy storage systems, and hybrid technologies.

The Independent Power Producer Office (IPPO) and Eskom were pivotal in overseeing the procurement process. Eleven preferred bidders were selected in 2021, with seven projects progressing to the construction phase. However, the remaining four projects faced setbacks, leading to multiple extensions of their budget quote validity periods.

Despite Eskom’s efforts to assist these projects, the budget quotes for the remaining four ventures expired on December 31, 2023, without further extensions. Eskom expressed regret over the outcome, emphasizing the potential contribution of these projects to alleviating pressure on the power system and mitigating the impact of load shedding.

The affected projects, comprising four gas-to-power facilities and a solar PV facility, held a total export capacity of 1,600MW and a contracted dispatchable capacity of 1,400MW. The provinces involved were Eastern Cape, Western Cape, Northern Cape, and KwaZulu-Natal.

Eskom cited the need to adhere to governance processes, ensuring projects adhere to approved timelines, scope, and costs. The affected budget quotes, extended for periods ranging from 20 to 30 months, are no longer valid beyond December 31, 2023. Eskom encouraged affected applicants to reapply for new budget quotes, emphasizing the allocation of available capacity to projects ready to contribute much-needed electricity to South Africa’s grid.