South Africa Picks Bidders for Emergency Power Generation

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South Africa announced the preferred bidders to provide emergency power as the state-run electricity utility continues to implement rolling blackouts that are weighing on the economy.

The eight bidders will provide a total of 1,845 megawatts from various technologies to be connected to the grid by August 2022, Mineral Resources and Energy Minister Gwede Mantashe said Thursday in a presentation. The projects equate to private sector investment of 45 billion rand ($3 billion) under the so-called Risk Mitigation Independent Power Procurement Program and should reach financial close by the end of July.

In a separate process, a request for proposals for an additional 2,600 megawatts from renewable sources, in what’s known as the fifth bid window, was released at midnight.

By announcing the preferred bidders for emergency power and the proposal request for renewables, the government met its most recent deadlines to roll out new capacity after delays. State power company Eskom Holdings SOC Ltd. has said that generation by independent producers is essential to meet demand, after South Africa experienced record power cuts in 2020 with more outages expected this year.

Solar, Wind

The emergency power bids were awarded to ACWA Power Projects DAO, Oya Energy and Umoyilanga, with two projects for Mulilo Total and three for Karpowership SA. They use technologies including solar, photovoltaic, wind, liquefied natural gas and battery storage. About 3,800 jobs will be created during the construction stage and another 13,500 during the 20-year power purchase agreement.

The fifth bid window that calls for 1,600 megawatts of wind and 1,000 megawatts from solar will close for submissions on Aug. 4.

The announcement “marks the rebirth of the wind energy industry,” South African Wind Energy Association Chief Executive Officer Ntombifuthi Ntuli said in a statement. She pointed out that the last bidding round took place in 2014.

“Given the energy challenges that we are facing the objective is to get these projects connected to the grid as soon as possible,” Mantashe said.

South Africa also plans to release four more requests for proposals over the next 12 months to include renewables, gas, coal and battery storage.

©2021 Bloomberg L.P.

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