South Africa’s plan to procure emergency power to help Eskom stave off load-shedding before the end of 2022 has been utterly derailed.
The energy department on Thursday announced it had signed off on a power purchasing agreement (PPA) with Norwegian company Scatec to provide 150MW of dispatchable renewable generating capacity.
This was part of the Risk Mitigation Programme Independent Power Producers Programme (RMIPPP).
The hybrid installation in the Northern Cape will consist of 540MW of solar PV capacity and 1.1GWh of battery storage, providing the ability to dispatch 150MW to Eskom’s grid at any given time.
The project must now reach financial close within 60 days from the signoff, after which construction will begin. It is expected to start providing power to the national grid by the end of 2023.
These are the first of 11 planned RMIPPP projects progressing to this stage.
Government first announced its plan to procure emergency power in December 2019.
The department officially gazetted the programme on 7 July 2020.
One of its main goals was to address the electricity supply gap that prevented Eskom from performing necessary maintenance on its coal power fleet, forcing it to implement severe load-shedding.
The programme also intended to reduce the power utility’s reliance on expensive diesel-based peaking open cycle gas turbines (OCGTs).
Eskom’s OCGTSs provide extra power during high demand periods when its typical generation is insufficient.
In March 2021, the department announced the eight preferred RMIPPP bidders, with a combined dispatchable capacity of 1,825MW.
The three projects from Scatec were added to the list three months later, meaning the programme would provide 1,975MW capacity once all the projects were built.
However, the approval of power purchasing agreements for the remaining eight projects dragged along at a snail’s pace.
The result is that none of the projects are expected to be completed by the end of the year — which was the deadline government initially set by which bidders had to supply electricity.
The table below summarises the progress on each of the projects from the preferred bidders.
|Preferred emergency power bidder projects|
|Supplier||Type of energy||Dispatchable capacity*||Project progress|
|ACWA Power Projects DAO||Diesel, gas, solar||150MW||Power purchase agreement signoff pending, no ETA for completion|
|Oya Energy Hybrid Facility||Battery storage, diesel, solar, wind||128MW||Power purchase agreement signoff pending, no ETA for completion|
|Karpowership SA Coega||Gas||450MW||Power purchase agreement signoff pending, facing legal challenges|
|Karpowership SA Richard’s Bay||Gas||450MW||Power purchase agreement signoff pending, facing legal challenges|
|Karpowership SA Saldanha||Gas||320MW||Power purchase agreement signoff pending, facing legal challenges|
|Mulilo Total Coega||Solar, gas||198MW||Power purchase agreement signoff pending, no ETA for completion|
|Mulilo Total Hydra Storage||Battery, diesel, solar||75MW||Power purchase agreement signoff pending, no ETA for completion|
|Scatec Kenhardt 1||Solar, battery||50MW||Power purchase agreement signed, ETA for completion end 2023|
|Scatec Kenhardt 2||Solar, battery||50MW||Power purchase agreement signed, ETA for completion end 2023|
|Scatec Kenhardt 3||Solar, battery||50MW||Power purchase agreement signed, ETA for completion end 2023|
|Umoyilanga Energy||Battery storage, gas, solar, wind||75MW||Power purchase agreement signoff pending, no ETA for completion|
|*Actual capacity may be more|
Well-known energy analyst Chris Yelland pointed out that the only three projects that have been signed also happen to be those that don’t rely on other forms of energy generation than solar.
“No wind. No gas. No diesel. No Karpowerships,” Yelland said.
It is worth noting that all of the other projects plan to use either gas or diesel or a combination of the two.
With diesel and gas prices surging in recent months, there may be concerns over how much Eskom would have to pay for these projects over the programme’s 20-year PPAs.
The fly in the ointment?
The bidder that would’ve provided the most significant chunk of generating capacity — Karpowership — has been embroiled in controversy.
The company runs powerships that can be moored in harbours and connected to a country’s power grid to provide power generated by onboard liquified natural gas (LNG) gas turbines.
But the powership plan, estimated to be worth about R218 billion, has come under attack by energy experts, civil organisations, and opposition parties.
Many questioned why Karpowership would be given a 20-year PPA when powerships were typically rolled out as a short-term solution during a crisis — like war.
Rival DNG Energy has launched a legal challenge alleging foul play in awarding Karpowership preferential bidder status.
The Organisation Undoing Tax Abuse applied to the court to have the granting of the company’s generation licences declared unlawful.
Karpowership also still lacks the necessary environmental approval after having an exemption revoked that it allegedly acquired under false pretences.
Furthermore, Eskom is refusing to sign a PPA with Karpowership until the National Energy Regulator of South Africa can provide clarity on the prices of the gas that would power the turbines.