Department to finalize power purchase agreements from next month

Mineral Resources and Energy Minister, Gwede Mantashe, says over the next two months, the department will finalise power purchase agreements that are set to address the country’s energy shortfall.

Mantashe said this when he participated in the debate on the State of the Nation Address on Tuesday.

“Next month and in April, we will conclude the power purchase agreements for 2 000MW Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

“The challenge is that, not all of the RMIPPPP preferred bidder projects may be in a position to conclude power purchase agreements due to outstanding processes on their side,” he said.

President Cyril Ramaphosa announced in the SONA last week that due to the country’s ageing power stations, poor maintenance, policy missteps and the ruinous effects of State capture, South Africa has a shortfall of around 4 000MW of electricity.

The President said during the past year, government has taken firm steps to bring additional generation capacity online as quickly as possible to close the shortfall.

Participating in the debate on Tuesday, Mantashe said other power purchase agreements that will be concluded over the next two months include 2 600MW from the renewable energy bid window 5, for which preferred bidders were announced at the end of October 2021.

“In addition, at the end of March, we will issue a request for proposals for 2 600 MW from renewable energy Bid Window 6.

“In April, there will be a request for proposals for 513 MW from battery storage,” he said.

Mantashe said thereafter, additional bid windows, including bid window 7, will follow at six-month intervals.

“The IRP 2019 provides for gas as a transition fuel to support large penetration of renewable energy into the grid.

“It also provides for cleaner coal technologies and nuclear for sustaining some level of baseload power, necessary for power system stability.

“It is comforting to see that there is now growing global consensus on the role of gas and nuclear in the energy transition. The European Union has labelled these technologies as part of the green transition.”