South Africa signs 13 new energy agreements – with the load shedding axe at its neck

Staff Writer9 December 2022

Minister of Mineral Resources and Energy, Gwede Mantashe, has announced that an additional 13 projects under the 5th Bid Window of the Renewable Energy IPP Procurement Programme (REIPPPP Bid Window 5) have signed legal agreements, as well as the Preferred Bidders appointed under the REIPPPP Bid Window 6.

The Minister and Eskom concluded the Power Purchase Agreements (PPAs) and Implementation Agreements (IAs) with the thirteen projects at a signing ceremony held in Centurion. The projects will all be procured from Solar PV technologies at project unit sizes of 75MW each and will contribute an additional 975MW renewable energy to the national grid.

The projects that have signed legal agreements on 8th December 2022 are as follows:

  • Grootfontein PV 1, Scatec, Touwsriver Western Cape
  • Grootfontein PV 2, Scatec, Touwsriver Western Cape
  • Grootfontein PV 3, Scatec, Touwsriver Western Cape
  • Grootspruit Solar PV, Engie – Pele Consortium , Allenridge, Free State
  • Graspan Solar PV, Engie – Pele Consortium, Ritchie, Northern Cape
  • Sannaspos Solar PV Pr, Engie – Pele Consortium, Botshabelo, Free State
  • Du Plessis Dam Solar PV 1, Total Mulilo, De Aar, Northern Cape
  • Kentani Solar Facility, Ikamva Consortium, Dealesville, Free State
  • Klipfontein Solar Facility, Ikamva Consortium, Dealesville, Free State
  • Klipfontein 2 Solar Facility, Ikamva Consortium, Dealesville, Free State
  • Leliehoek Solar Facility, Ikamva Consortium, Dealesville, Free State
  • Braklaagte Solar Facility, Ikamva Consortium, Dealesville, Free State
  • Sonoblomo Solar Facility, Ikamva Consortium, Dealesville, Free State

Once all Conditions Precedent have been met, and projects have reached commercial and financial close, they will enter into the construction period, which is expected to be 24 months, Mantashe said.

With the signing of these 13 agreements, the Department has now concluded 19 out of the 25 announced projects under Bid Window 5, which will add an overall total of 1,759MW renewable capacity to the national grid. This comprises 784 MW from onshore wind technologies and 975 MW from Solar PV.

At the end of October 2022, which was the cut-off date communicated by the Department, the six remaining Preferred Bidders appointed under Bid Window 5 indicated that they were not ready to close.

The department said it is in discussions with these Preferred Bidder projects to conclude the procurement within the framework of the Request for Proposals and the law.

The total investment attracted from all 19 projects that have been signed to date under Bid Window 5 is R34.3 billion.

Mantashe also announced the Preferred Bidders appointed under the 6th Bid Window of the REIPPPP. The bid window was released in April 2022, and 56 bid submissions were received on 3 October 2022.

Following the evaluation, the minister announced that five Solar PV projects have been appointed as Preferred Bidders, at a total of 860MW. An eligible 6th bidder has also been identified, and the department is in discussion with the potential bidder on conditions for appointment in order to fill the remaining gap up to 1,000MW.

However, despite the promise of over 3,000MW of energy to come, the additional new generation capacity from Bid Window 5 is only expected to come online in early 2025.

In the meantime, South Africa will have to contend with even more power being taken offline in the coming year, while the grid remains under immense pressure.

Load shedding crisis

The country was plunged into stage 6 load shedding on Tuesday ahead of the planned outage of Koeberg Unit 1.

The outage of Unit 1 of the Koeberg Nuclear Power Station – initially planned for Thursday (8 December) – has been pushed back to Saturday (10 December) to give Eskom breathing room to try and stabilise its grid.

Load shedding has been reduced to stage 5 on Friday, but this does not indicate that Eskom is out of the woods just yet.

Public enterprises minister, Pravin Gordhan, directed the management and board of Eskom to get the country out of stage 6 load shedding with immediate effect on Thursday evening.

But the outage of Koeberg cannot be stopped, and almost 1,000MW of energy will be removed from the grid very soon and will remain offline for at least six months. According to the department of public enterprises, this will soon be followed by another outage – Unit 2 at Koeberg – for a similar period.

“The installation schedule of the specific project to replace the steam generators (at Koeberg) has moved to coincide with the outage starting in December 2022 for Unit 1, and the outage for Unit 2 starting in October 2023.

“This change to the installation of the steam generators still aligns with the overall schedule and the milestones associated with the Eskom licence application to operate Koeberg for an additional 20 years. This schedule has not changed,” it said.

Meanwhile, outages at Kusile and Medupi, totalling 3,000MW, also remain in effect, with most of these repairs only expected to be concluded in 2024.