SA Govt approves 1,845MW independent power supply but disappoints in power reforms

THE South African government announced the winning bidders that will supply 1,845MW of new electricity to the national grid from August 2022, and said a fifth window of bids for an additional 2,600MW of power was now also open.

Winning bids will provide power generated from alternative energy such as solar, wind, and liquified natural gas and represents private sector investment of about R45bn, according to a report by BusinessLive.

However, the good news was leavened with the disappointing announcement that the self-generation cap would be raised to 10MW from 1MW of power instead of the 50MW the private sector desired in terms of structural reform to the energy sector.

Allowing energy-intensive users to generate up to 50MW of their own power – many of them most likely in the mining sector – would have the effect of reducing demand 5,000 MW, said BusinessLive.

Citing André de Ruyter, CEO of the state-owned power utility, Eskom, BusinessLive said power generation by independent producers was essential for energy security.

Even as large parts of the South African economy were closed in 2020 due to lockdowns to slow the spread of Covid-19, the country had 859 hours of load-shedding, said BusinessLive. This equated to almost 10% of the year, according to the Council for Scientific and Industrial Research (CSIR).

The winning bidders providing the 1,845MW are ACWA Power Project DAO; Mulilo Total Coega; Mulilo Total Hydra Storage; Oya Energy Hybrid Facility; and Umoyilanga Energy, while Karpowership SA has won bids for its Coega, Richards Bay and Saldanha projects, said BusinessLive.

The solutions provided by these bidders involve combinations in a range of technologies that include solar photovoltaic, wind, liquefied natural gas, and battery storage.

Gwede Mantashe, South African mines and energy minister, said the prices for the proposed solutions range from R1,468/MWh to R1,885/MWh, with a weighted average price of R1,575/MWh or R1,575/kWh.