South Africa marks milestone for emergency power procurement

The Department of Mineral Resources and Energy (DMRE) has confirmed that the National Energy Regulator of South Africa (NERSA) is in agreement with a Ministerial determination for the procurement of 2,000MW of emergency power from Independent Power Producers (IPPs).

In line with Section 34 of the Electricity Regulation Act, the energy regulator’s accord is required before government is allowed to initiate a procurement programme for new electricity capacity.

According to Engineering News, deputy director-general Jacob Mbele told Parliamentarians participating in a virtual meeting of the committees overseeing the DMRE that the department is currently working with the IPP Office to prepare bid documentation, which would be released between June and July.

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Embedded generation

In February, the Minister of Mineral Resources and Energy, Gwede Mantashe, sent the two draft ministerial determinations (the Proposed Determinations), prepared in accordance with section 34 of the Electricity Regulation Act, to NERSA.

Thereafter, the regulator published two consultation papers.

The first of the ministerial determinations, titled Concurrence with the Ministerial Determination on the procurement of new generation capacity from the range of energy technologies in respect of 2,000MW and for which the closing dates for comments was 14 April 2020 (the Consultation Paper 1); and the second, titled Concurrence with the Ministerial Determination on the procurement of new generation capacity from Renewables (Wind and Photovoltaic), Storage, Gas and Coal technologies in respect of 11,813MW and for which the closing date for comments was 7 May 2020 (the Consultation Paper 2). 

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Eskom’s role in the emergency power procurement

Mbele described the receipt of Nersa’s concurrence notice, which had been delivered last week, as a major milestone in opening the way for procurement.

“The DMRE is now working with the IPP Office to prepare documentation for the procurement of the emergency power. We believe that bid documentation should be out within the next month or month-and-a-half at the latest.”

Media quoted Mbele stating that Eskom had agreed to act as the single buyer of the power arising from the emergency programme, revealing that the state-owned utility’s initial risk-sharing concerns had been addressed.