Bid documentation for 2 000 MW of emergency power by ‘end July, early August’

Bid documentation for the procurement of 2 000 MW of “emergency” power to address an immediate supply shortfall that is making South Africa vulnerable to ongoing load-shedding will be released to the market by the end of July or early August at the latest, Minister Mmamoloko Kubayi-Ngubane told lawmakers on Tuesday.

Delivering a Budget Vote address on behalf of Mineral Resources and Energy Minister Gwede Mantashe, who was hospitalised for Covid-19 on Monday, the Tourism Minister said both demand and supply solutions were required to mitigate the unpredictable performance of Eskom’s plant.

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The fall in the energy availability factor from Eskom’s undermaintained coal fleet had resulted in a return of rotational power cuts in July, and the utility had warned that there was a risk of even more load-shedding for the coming 18 months as it implemented a so-called reliability maintenance programme that would result in units being taken offline for protracted periods.

Kubayi-Ngubane said a “holistic” approach had been adopted to the problem, as there was insufficient time to pursue the normal route of introducing grid-scale generation solutions, which, depending on permitting requirements, technology and size, typically involved lead times of about three years.

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Besides the emergency procurement programme, the department was expecting that the National Energy Regulator of South Africa (Nersa) would provide its concurrence “soon” on a second Section 34 Determination which would enable the procurement of the capacity outlined in the Integrated Resource Plan of 2019 (IRP 2019).

“In addition to providing security of supply in the long run, these determinations are going to unlock investments in excess of R250-billion from various energy sources that include, coal, gas, renewable energy and storage.”

Government’s Independent Power Producer Office (IPPO) had already warned, however, that it was unlikely to be in a position to release bid documentation for the technologies outlined in the IRP 2019 until the second quarter of 2021.

In the shorter-term, Kubayi-Ngubane indicated that supply would be augmented by procuring additional power from existing independent power producers (IPPs), Eskom entering into short-term supply and demand agreements with existing facilities and customers and enabling generation for own-use.

The IPPO was engaging with the renewables IPPs to secure existing surplus energy, with about 128 MW available immediately, 50 MW of which was accessible without the need for any additional infrastructure.

Eskom was also pursuing a Short-Term Power Purchase Programme (STPPP) for as much as 550 MW.

The utility revealed to Engineering Newsearlier in July that the evaluation of STPPP bids was being hampered, however, as the Covid-19 pandemic had reduced access to the secure C-Max facility at Megawatt park where such evaluations were conducted.

Kubayi-Ngubane said the department was also enabling generation for own-use, having removed the licensing requirements for a certain category of generation facilities under 1 MW.

“One hundred and thirty-nine requests for registration have been processed by Nersa to date with a capacity of 59 MW. This capacity excludes installations under 1 MW that register directly with local municipalities.”

The Democratic Alliance’s Kevin Mileham described the interventions as entirely inadequate, arguing that they fell well short of the promises made by President Cyril Ramaphosa in his February State of the Nation Address (SoNA) for dealing with impediments to self-generation.

“In reality nothing has changed. The amendments to Schedule 2 of the Electricity Regulation Act, which would allow own-generation, did not increase the licence exemption threshold to 10 MW as had been widely anticipated,” he noted.

In rejecting the department’s amended Budget, Mileham also argued that the emergency power procurement programme was unlikely to yield a single megawatt before the end of 2021.

“If he really meant what he said at SoNA this year, the President would direct this department to immediately open the fifth bid window of the renewable energy procurement programme; he would instruct Nersa to urgently finalise the Section 34 determination it is considering; he would encourage Parliament to support the Independent Electricity Management Operator Bill currently before it to ensure a level playing field for all electricity generation entities and companies; he would order the immediate amendment of the licensing threshold for own-generation; he would ensure that the IPPO was working on urgently bringing the IPPs that have submitted proposals for the emergency supply of electricity on board.”