South Africa launches bids for 5,000 MW renewable and 615 MW battery capacity to beat power deficit

South Africa launches bids for 5,000 MW renewable and 615 MW battery capacity to beat power deficit

The Government of South Africa has launched bidding rounds for 5,000 MW of new power generation capacity from renewable sources and 615 MW of battery storage, as the country fights to overcome power outages.

The country is also seeking 2,000 MW of capacity from natural gas-fired plants, in line with previously disclosed  plans to speed-up development of gas-fired capacity. A statement from the Department of Mineral Resources and Energy said three requests for proposals (RFPs) had been invited from independent power producers (IPPs) for the aforementioned capacities.

Africa’s third-largest economy (after Nigeria and Egypt) has faced rolling blackouts, with power cut almost daily because of breakdowns at its old coal-fired power plants, and officials earlier said the country needs ~6,000 MW of new capacity to overcome the energy deficit. And although the country has ~5,5000 MW of renewable capacity in the pipeline, that is only expected to come online by 2026.

In a written response distributed to the country’s parliament, South Africa’s energy minister Gwede Mantashe said the country had completed construction of 90 renewable energy projects to date.

All of these projects are now operational and connected to the grid, where they have added ~6,180 MW of capacity. Another nine projects totaling more than 1,000 MW are currently under construction, the response said.

Earlier this month, Norwegian company Scatec ASA announced it has started producing and supplying electricity from the Kenhardt project, the world’s largest solar and battery project. Located in the Northern Cape Province, the ~$1 billion project has installed solar capacity of 540 MW and a battery storage capacity of 225 MW/ 1,140 MWh.

South Africa started procuring power from IPPs or private developers more than a decade ago to meet requirements that could not be met from its aging coal-fired fleet. Even now, the country depends on coal to generate 80 percent of its power, and expects a transition to clean energy sources will require an investment of close to $80 billion.

Rich nations are supporting this through a $12 billion package that mainly consists of loans to aid the transition, including $676 million of grants.

South Africa has earlier launched six renewable energy bidding rounds. These have largely been dominated by wind and solar projects. Africa’s largest economy has also held one battery storage round, as well as an emergency “risk-mitigation” due to energy shortage, wherein the government considered gas-fired power plants among preferred bidders alongside RE projects.

However, the emergency round itself got entangled in environmental opposition and court challenges. Most of the projects awarded during the round are still awaiting fund disbursal.