RMIPPPP overhaul19 Apr 2021 23:46
https://www.google.com/amp/s/m.miningweekly.com/article.php%3fa_id=581995&rep_id=5582
An energy expert has written to the Department of Public Works and Infrastructure (DPWI) and the Independent Power Producer (IPP) Office to highlight the expensive shortcomings of the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), which he says should be replaced by a materially larger, yet more cost-effective, procurement programme based primarily on renewables and storage, rather than power ships.
DPWI, together with The Presidency, is overseeing the implementation of the Strategic Infrastructure Projects, or SIPS, earmarked for priority implementation as part of government’s economic recovery from the Covid-19 pandemic. The RMIPPPP is one of the 62 initial SIPS Gazetted in line with the Infrastructure Development Act.
On March 18, Mineral Resources and Energy Minister Gwede Mantashe named eight preferred bidders under the 20-year RMIPPPP, including three fully imported Karpowership floating gas-fired power plants, which collectively secured 1 220 MW of the 2 000 MW on offer.
Besides the power ships, the other projects named as preferred bidders, and making up the 1 850 MW to be contracted under the scheme, included various combinations of solar photovoltaic (PV), wind and gas or diesel generators, along with battery storage systems.
The preferred bidders are required to reach financial close by no later than the end of July 2021.
All projects had to meet a standalone 05:00 in the morning to 21:30 at night dispatch-load stipulation, without accessing any other existing infrastructure.
Energy consultant Clyde Mallinson, who has written the letter to the IPP Office, warned in October, and ahead of the December RMIPPPP bid deadline, that the rules treating each project as separate generation “islands” were heavily skewed in favour of gas-to-power solutions and would result in extremely costly bids.
He said the standalone architecture, which made it impossible for projects to tap into existing grid infrastructure to help reduce the cost of production, should be overhauled to avoid an outcome that would lock in “dirty and expensive energy for the next 20 years”.
Mallinson also question why government was targeting to procure only 2 000 MW in a context where the true deficit was far larger. It has been estimated at 5 000 MW by Eskom.
In the event, the rules were not adjusted, and the tariffs bid by the preferred bidders range from a low R1 468/MWh to R1 885/MWh.
In his briefing note sent to the IPP Office, Mallinson argues that a “systems” response that deploys all the country’s existing electricity assets would be a far cheaper way to respond to the electricity emergency than the RMIPPPP.
Such an approach would allow new projects to interact with the country’s existing generation, storage, transmission, and distribution infrastructure to unlock “complementary or mutually beneficial interaction”.