On 22 March 2016 the Minister determined that 600MW of gas-fired power generation was to be procured in addition to the 3 126MW determination in 2015 for new IPP gas-fired generation capacity. The Department of Energy has commenced with the design of a suitable procurement process for the appointment of a strategic partners (the “Strategic Partner”) for development, financing, construction, operation and maintenance of a 600MW gas-fired power plant located in one of the major ports, i.e. Coega, Richards Bay or Saldanha Bay.
Through the Project, the Department wishes to promote the establishment of manufacturing opportunities within the gas to power value chain, where the initial ‘anchor’ customer for such components will be the 600MW programme.
The gas for this Project will be sourced through the import infrastructure established through the LNG to Power IPP Procurement Programme and therefore it is anticipated that the procurement documentation for 600MW programme will be issued after that of the LNG to Power IPP Procurement Programme.
The process of identifying the Strategic Partner commenced with the invitation for interested parties to respond to the expression of interest (“the EOI”). The submission of responses to the EOI closed on 20 June 2016.
The EOI was not a compulsory process and the submission of a response to the EOI is therefore not a prerequisite for participation in the LNG to Power IPP Procurement Programme.
In the baseload determination of 2012, the Minister of Energy determined that new generation capacity should be procured from hydro, coal and gas sources to support the South Africa’s base load energy mix and generation from gas and cogeneration as part of the medium-term risk mitigation project programme. This has to be procured through one or more of the Independent Power Producer (“the IPP”) programmes and to contribute towards national energy security.
The Minister amended the 2012 baseload determination and issued a specific determination for the LNG to Power IPP programme in the amount of 3 126MW. This amended determination provides the mandate for the Department to embark upon the Gas to Power 3 126MW Procurement Programme, for which programme the Department is currently busy preparing the procurement documentation.
The Minister now intends to issue a further determination for new generation capacity which is needed to contribute towards energy security in the amount of 600MW and is to be generated from gas (which includes liquefied natural gas or natural gas delivered by pipeline from a natural gas field) which represents the capacity allocated to “Gas CCGT (natural gas)”, under the heading “New Build”, for the years for the years 2030 in Table 3 of the IRP 2010-2030.
Through this EOI the Department intends to determine the private sector interest in seeking appointment as a strategic partner (the “Strategic Partner”) to one or more State-Owned Company/ies to implement the project. The role of the Strategic Partner will be to provide the necessary technical and financial support for the implementation of the project, in conjunction with the State-Owned Company/ies. Such support may include, inter alia, the design and development of a 600MW gas-fired power generation plant and the identification and establishment of opportunities for manufacturing within the gas to power value chain.