Programme’s bold and bright promise
SOUTH Africa’s energy sector is tackling the dual impacts of the post-Covid-19 recovery and rapidly changing energy demand and supply patterns.
Enhanced investment in energy infrastructure is more important than ever to advance economic transformation; ensure sufficient, affordable, reliable energy for all, and drive an inclusive, just and sustainable energy transition.
The country’s energy supply is characterised by reliance on an ageing coal-fired generation fleet with around 10 000MW earmarked for decommissioning over the next 10 years.
A declining energy availability factor results in an immediate risk to the security of supply with many South Africans experiencing power shortages and load reduction, while electricity prices continue to increase.
All of these factors impact significantly on manufacturing, production, businesses and households.
Since the introduction of the Integrated Resource Plan 2010, the Department of Mineral Resources and Energy has mobilised private sector support and investment for the energy sector. The Renewable Energy Independent Power Producer Programme in particular, has been the major driver behind South Africa’s growing renewable energy footprint.
Ministerial determinations in July and September 2020 paved the way to encourage more private sector participation in additional renewable energy and complementary technologies and clean coal.
The Risk-Mitigation Independent Power Producer Procurement Programme (RMIPPPP) was launched on August 23 in line with the first ministerial determination and seeks to procure 2 000MW of new generation capacity and reduce the utilisation of expensive diesel-based peaking electrical generators.
The RMIPPPP is an exciting new initiative that puts South Africa at the forefront of global innovation.
A defining feature of it is that it is a one-of-a-kind output-based Request for Proposals that seeks to meet energy system requirements, and is not prescriptive in terms of the technology to be procured. It has been designed in close co-operation with Eskom as the transmission and system operator.
Affordability is another critical element of the RMIPPPP design.
The urgency of the need to close the current energy supply gap requires this optimal power solution on line as soon as possible, – by the end of 2022.
Given South Africa’s socio-economic context of high unemployment, poverty and inequality, we need to be much more agile in exploring new industries and business models to take advantage of and benefit from our excellent energy resource potential.
As we embark on a post-Covid-19 economic recovery, procurement programmes should be designed to stimulate manufacturing and production and support local participation with opportunities for black industrialists and black IPPs.
The RMIPPPP recognises this and builds on and intensifies support to socio-economic transformation
It is but one initiative of the government to speed up the procurement of new generation capacity and ensure the security of supply. Other initiatives include enabling generation for own use as well as municipal generation.