The Risk Mitigation IPP Procurement Programme (RMIPPPP) aims to alleviate South Africa’s electricity supply constraints and reduce the use of diesel-based generators.
Two-thirds of the new RMIPPP programme – 1,220MW of the 1,845MW – went to a single company, Karpowership SA.
The CSIR estimated that Karpowership SA, a unit of the Turkish Karadeniz Energy Group, can get as much as R218 billion from the 20-year deal.
This decision faced severe criticism from many energy experts because of its environmental impact, the lack of local gas resources, and the cost.
Many people argued that solar and wind power, in combination with battery storage, provide a better and more sustainable solution.
South Africa is blessed with a lot of sunshine and wind which make these renewable energy options an obvious choice.
While the programme includes solar PV, wind, and battery solutions, Karpowership SA is by far the biggest beneficiary.
Karpowership SA has responded to the local procurement criticism, saying at least 65% of its workforce will be South African and employed from local communities.
The company added that it will maintain all local and international environmental codes and protect South Africa’s oceans, ports, and sensitive environmental areas.
Energy expert Chris Yelland delved into the powership procurement decision in an interview with Department of Mineral Resources and Energy DDG, Jacob Mbele, and IPP Office Acting COO, Maduna Ngobeni.
He also explores some of the issues relating to the selection of gas-to-power over wind, solar PV, and battery energy storage for two thirds of the generation capacity awarded.
Chris Yelland: Why are preferred bidders using solar PV technologies required to buy locally made solar PV panels, which may not available from local manufacturers in the quantities required by the market, and may come at a substantial price premium, while for the Karpowership projects, the ships, gas engines, floating fuel storage and regasification units (FSRUs) and the liquified natural gas (LNG) fuel (which in itself accounts for about 60% to 70% of the total cost) is allowed to be fully imported?