Cape Town - Karpowership has been dealt a huge blow as three of its budget quotes for energy projects across three provinces, including the Western Cape, expired on December 31, and Eskom will grant no further extensions.
According to Eskom, the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) was launched by the Department of Mineral Resources and Energy (DMRE) in 2020 as an emergency energy procurement programme aimed at addressing the country’s current energy challenges.
“The Independent Power Producer Office (IPPO) is the designated procurer for the RMIPPPP, and Eskom Holdings SOC Ltd is the designated buyer in line with the ministerial determination promulgated in 2020 by the Minister of Mineral Resources and Energy in terms of Section 34 of the Electricity Regulation Act.”
The programme aimed to procure a total of 2 000MW from a range of dispatchable (mid-merit) technologies and energy sources, including gas, solar photovoltaic (PV), wind, battery energy storage systems (BESS), and/or hybrid technologies.
A total of 11 preferred bidders were announced by the IPPO in 2021, and Eskom issued budget quotes for all 11 projects, including Karpowership.
“Eskom wishes to inform the public that five budget quotes for the grid integration of the remaining four projects in the RMIPPPP expired on December 31, 2023, and will not be extended further.
“This is after several budget quote validity period extensions were requested and granted by Eskom in an effort to assist in ensuring the success of these projects,” said the power utility.
“The four projects were expected to reach commercial completion at the end of July 2021,” Eskom said.
“However, over time, following the issuing of the original budget quotes in 2021, the IPP Office announced several postponements of the scheduled commercial close dates.
“Consequently, several budget quote validity period extensions were requested by customers, and Eskom duly considered these requests and granted extensions.”
The affected Karpowership projects include the Coega Powership, the Saldanha Powership, and the Richards Bay Powership. These projects, combined, had a capacity of 1 220MW.
Liz McDaid, strategic lead at the Green Connection (GC), said she was pleased that Eskom had finally acted.
“In our view, Karpowerships has been a costly and controversial project that has been more than a year delayed.
“We now hope that, with the grid freed up, more power projects will be connected quickly and our load shedding will be reduced.
“Even if Eskom were to change its mind, there are various environmental and legal challenges that are under way. The GC believes that good governance should be non-negotiable in all development projects.”
Karpowership said it would not be commenting for now on this matter.
zolani.sinxo@inl.co.za