IPP Risk Mitigation

The Risk Mitigation IPP Procurement Programme

The promulgation of the IRP 2019 and associated ministerial determinations guide the roll out of the Independent Power Producers Procurement Programme (IPPPP). The IRP 2019 indicates that there is a short-term electricity supply gap of approximately 2 000 MW between 2019 and 2022.

The DMRE launched a Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) on the 23rd of August 2020. The objective of the RMIPPPP is to fill the current short-term supply gap, alleviate the current electricity supply constraints and reduce the extensive utilisation of diesel-based peaking electrical generators. The Determination for the RMIPPPP was gazetted on the 7th of July 2020.

In response to the Determination, the 2 000 MW of new generation/supply capacity will be procured from a range of energy technologies and are based on the following criteria:

It will be technology agnostic;
Based on the plant-performance needs of the electricity system operator;
It will procure dispatchable flexible generation that should be able to provide energy, capacity and ancillary services;
Should be able to operate between 5h00 to 21h30;
It must have an AGC load following ability, flexible capacity factor and must be “scalable” with changing capacity requirements; and
Must be able to connect power to the grid by June 2022.

The Risk Mitigation IPP Procurement Programme

The key principles for the design of the RFP will be based on a least cost and least regret basis taking into consideration the present socio-economic challenges and the importance of affordable electricity and the significance there of for economic growth.

In fostering an environment that will allow for least cost options the Department will introduce the opportunity for a bidder to bid in a portfolio manner with the objective of combining a range of technologies that will meet the system operator demands, but also, through the use of a cost optimal approach, combine technologies to reduce the average bid tariff and ultimately the cost of electricity to the end consumer.

The Project may therefore comprise of any of the following:

a single Facility using a single technology solution, on a single Project Site;
multiple Facilities using different technology solutions (i.e. Fuel and non-fuel based generation), on a single Project Site, or
multiple Facilities using different technology solutions, on multiple Project Sites.

The minimum Contracted Capacity of a Project shall be 50 MW and the maximum Contracted Capacity shall be 450 MW, subject to availability and transmission evacuation capacity at the connection point.

The Risk Mitigation IPP Procurement Programme

Due to the emergency nature of the RMIPPPP, the objective is to procure energy from projects that are near ready. The timelines from the release of the RFP in the market to bid submission and then again from preferred bidder stage to financial close will be short to ensure that electricity can be connected to the grid as soon as possible. The RMIPPPP will allow for a phased grid connection, incentivising early power with a long stop date for the last permissible commercial operation dates before end June 2022

The connection timelines will not allow for any deep strengthening of the grid and the qualification criteria will therefore facilitate projects where grid capacity is available and do not require any deep grid works.

The RMIPPPP will provide for long term power purchase agreements up to 20 years.

The Risk Mitigation IPP Procurement Programme

The Economic Development Elements of the RMIPPPP are aligned with the outcome of the REIPPPP Bid Window 4 Value for Money negotiations with further alignment to the amended BBBEE Codes to introduce specific aspects such as supplier development and elements to cater for youth, women and those living with disabilities.

Specific focus is placed on local content with local content now also introduced in the operational phase over the lifespan of a Project.

It is fundamental to the success of the RMIPPPP that the pricing will be the key factor in the process of awarding projects to bidders. In this regard, the Department will align with the 90/10 principles espoused in the PPPFA and Regulations in the price and specific goals (BBBEE/ED) evaluation.

The procurer, in respect of the procurement programme, will be the Department of Mineral Resources and Energy and the electricity must be purchased by Eskom Holdings SOC Limited designated as the buyer.

Qualification and Evaluation Process

The Qualification and Evaluation process will be based on the known and internationally recognised two-staged evaluation approach as used in all previous procurement rounds.

The first stage is a qualification stage that has a number of minimum qualification requirements for the legal, financial, technical and economic development responses. The qualification criteria has been designed to elicit, amongst others, an indication of the readiness of Projects. A project has to pass all of the qualification criteria to advance to the evaluation stage.
The second evaluation stage is a comparative evaluation of price and economic development (competitive evaluation) using the 90/10 split as per the PPPFA 90/10 price evaluation principles in order to score and rank the Bid Responses.
The outcome of this stage is a list of preferred bidders.

Notices and Alerts

Risk mitigation IPP Procurement Programme (RMIPPPP)

List of Bidders (bids submitted) on 22 December 2020

Project Number Project Name Project Company

RM-TA-0006-001 Oya Energy Hybrid Facility (the “Project”) Oya Energy (Pty) Ltd

RM-TA-0021-001 Richards Bay Gas Power 2 Richards Bay Gas Power 2 (Pty) Ltd

RM-TA-0023-001 Elephant To be incorporated at Preferred Bidder

RM-TA-0025-001 ACWA Power Project DAO Not established yet

RM-TA-0028-001 Umoyilanga Energy (not applicable - to be incorporated)

RM-TA-0032-001 Scatec Kenhardt 1 Scatec Solar SA 330 (PTY) LTD.

RM-TA-0035-001 Nama Sun Veld Nama Sun (Pty) Ltd

RM-TA-0061-001 CB Hybrid Power CB Hybrid Power

RM-TA-0062-001 Frontier Power SA Frontier Power SA (RF) (Pty) Ltd

RM-TA-0145-001 Karpowership SA Coega Karpowership SA (Pty) Ltd.

RM-TA-0145-002 Karpowership SA Richards Bay Karpowership SA (Pty) Ltd.

RM-TA-0145-003 Karpowership SA Saldanha Karpowership SA (Pty) Ltd.

RM-TA-0148-001 Greenleaf Kagiso Greenleaf Kagiso (Pty) Ltd

RM-TA-0171-001 Sputnik Solar Hybrid Hyperion Solar Hybrid Proprietary Limited

RM-TA-0171-002 Apollo Solar Hybrid Vortum Energy Proprietary Limited

RM-TA-0173-001 De Aar Clean Dispatchable Power Project Soventix South Africa De Aar 1 (Pty) Ltd

RM-TA-0173-002 Saldanha Clean Dispatchable Power Project Soventix South Africa Saldanha 1 (Pty Ltd, Soventix South Africa Saldanha 2 (Pty) Ltd

RM-TA-0180-002 Mulilo Total Coega Mulilo Total Coega (PTY) LTD

RM-TA-0180-005 Mulilo Total Storage Mulilo Total Nieuwe-Coega (Pty) Ltd trading as Mulilo Total Storage

RM-TA-0181-002 Greenleaf G5 Greenleaf G5 (Pty) Ltd

RM-TA-0185-001 Shirley Solar Park Danax Energy Proprietary Limited

RM-TA-0185-002 Gunstfontein Gunstfontein Wind Farm Pty Ltd

RM-TA-0185-003 Lutzburg Lutzburg Solar (RF) (Pty) Ltd

RM-TA-0190-002 Khensani DNG Power Holdings (Pty) Ltd

RM-TA-0190-004 Busisiwe DNG Power Holdings (Pty) Ltd

RM-TA-0190-005 Mpenyisi DNG Power Holdings (Pty) Ltd

RM-TA-0195-002 Scatec Kenhardt 2 Scatec Solar SA 350 (Pty) Ltd (RF)

RM-TA-0195-003 Scatec Kenhardt 3 Scatec Solar 370 (Pty) Ltd

Risk mitigation IPP Procurement Programme (RMIPPPP)
List of Bidders (bids submitted) on 22 December 2020
Project Number	Project Name	Project Company
RM-TA-0006-001	Oya Energy Hybrid Facility (the “Project”)	Oya Energy (Pty) Ltd
RM-TA-0021-001	Richards Bay Gas Power 2	Richards Bay Gas Power 2 (Pty) Ltd
RM-TA-0023-001	Elephant	To be incorporated at Preferred Bidder
RM-TA-0025-001	ACWA Power Project DAO	Not established yet
RM-TA-0028-001	Umoyilanga Energy	(not applicable - to be incorporated)
RM-TA-0032-001	Scatec Kenhardt 1	Scatec Solar SA 330 (PTY) LTD.
RM-TA-0035-001	Nama Sun	Veld Nama Sun (Pty) Ltd
RM-TA-0061-001	CB Hybrid Power	CB Hybrid Power
RM-TA-0062-001	Frontier Power SA	Frontier Power SA (RF) (Pty) Ltd
RM-TA-0145-001	Karpowership SA Coega	Karpowership SA (Pty) Ltd.
RM-TA-0145-002	Karpowership SA Richards Bay	Karpowership SA (Pty) Ltd.
RM-TA-0145-003	Karpowership SA Saldanha	Karpowership SA (Pty) Ltd.
RM-TA-0148-001	Greenleaf Kagiso	Greenleaf Kagiso (Pty) Ltd
RM-TA-0171-001	Sputnik Solar Hybrid	Hyperion Solar Hybrid Proprietary Limited
RM-TA-0171-002	Apollo Solar Hybrid	Vortum Energy Proprietary Limited
RM-TA-0173-001	De Aar Clean Dispatchable Power Project	Soventix South Africa De Aar 1 (Pty) Ltd
RM-TA-0173-002	Saldanha Clean Dispatchable Power Project	Soventix South Africa Saldanha 1 (Pty Ltd, Soventix South Africa Saldanha 2 (Pty) Ltd
RM-TA-0180-002	Mulilo Total Coega	Mulilo Total Coega (PTY) LTD
RM-TA-0180-005	Mulilo Total Storage	Mulilo Total Nieuwe-Coega (Pty) Ltd trading as Mulilo Total Storage
RM-TA-0181-002	Greenleaf G5	Greenleaf G5 (Pty) Ltd
RM-TA-0185-001	Shirley Solar Park	Danax Energy Proprietary Limited
RM-TA-0185-002	Gunstfontein	Gunstfontein Wind Farm Pty Ltd
RM-TA-0185-003	Lutzburg	Lutzburg Solar (RF) (Pty) Ltd
RM-TA-0190-002	Khensani	DNG Power Holdings (Pty) Ltd
RM-TA-0190-004	Busisiwe	DNG Power Holdings (Pty) Ltd
RM-TA-0190-005	Mpenyisi	DNG Power Holdings (Pty) Ltd
RM-TA-0195-002	Scatec Kenhardt 2	Scatec Solar SA 350 (Pty) Ltd (RF)
RM-TA-0195-003	Scatec Kenhardt 3	Scatec Solar 370 (Pty) Ltd

Please note that the word version of applicable sections of the RFP which include Volume 2 Part 2 – Bid and Returnable Schedules, Volume 2 Part 5 – Preferred Bidder Undertakings and the Preferred Bidder Guarantee, Volume 2 Part 6 – Decommissioning Guarantee, Volume 4 Part 2 – Financial Appendices and Volume 6 – PPA and IA Tables have been made available on the Documents tab.

Where a Bidder has notified the Department of a Project for submission in the Risk Mitigation Bid Submission Phase and has not received a unique Project number, the Bidder should email the Project Office at query@ipp-rm.co.za as soon as possible.

The Bid Submission Notification period for the Risk Mitigation IPP Procurement Programme is now closed.

Note the period for Bid Submission Notification closes at 24.00 on 30 November 2020. Bid Submission is scheduled for Tuesday, 22 December 2020 from 8.00 to 17.00 at the IPP Offices. A Briefing Note will provide further details.

Bidders' Conference Video

Please click on the link below to access the video footage of the Risk Mitigation Bidders’ Conference that took place on Friday, 25 September 2020.

Bidders' Conference VIdeo

Please note that the word version of applicable sections of the RFP which include Volume 2 Part 2 – Bid and Returnable Schedules, Volume 2 Part 5 – Preferred Bidder Undertakings and the Preferred Bidder Guarantee and Volume 2 Part 6 – Decommissioning Guarantee will be made available to bidders closer to the Bid Submission Date.

An overview of the Request for Qualification and Proposals for new generation capacity under the Risk Mitigation IPP Procurement Programme is available in the Press Centre.

Press Centre

Bidders' Conference - Attendee List

Published on: 30 September 2020

Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) - Bidders' Conference Attendee List
Read article

Bidders' Conference - Legal Presentation

Published on: 29 September 2020

Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) - Legal Overview of Process Evaluation and Power PPA
Read article