Two projects to add 863MW to grid
The preferred bidders of the first bid window for the independent coal power producer programme are Thabemetsi and Khanyisa, Energy Minister Tina Joemat-Pettersson said yesterday.
She said both bidders were selected on the basis of stringent requirements, with all bids reviewed and evaluated by the Independent Power Producer’s office.
Both projects will requireR40-billion of debt and equity funding, and will create thousands of jobs in Limpopo, where Thabametsi’s project will be based, and in Mpumalanga, where Khanyisa will operate.
The two companies collectively will add 863MW to the country’s grid in the next five years, with Khanyisa set to begin commercial operation in December2020, followed by Thabametsi in March 2021.
Participants in the first bid window were required to have a minimum South African entity participation of 51%, black ownership of30% and a weighted broad- based black economic empowerment status of level five under the codes of good practice for their locally based shareholders.
Joemat-Pettersson said the two bidders were backed by foreign developers from Korea, Japan and Saudi Arabia, the South African banking sector, including the Development Bank of Southern Africa and the Industrial Development Corporation.
She said both companies had submitted prices below the stipulated qualification price of82c/kWh, which would escalate with the consumer price index.
Khanyisa came in at 80c and Thabametsi at 79c, but the head of the Department of Energy’s Independent Power Producer office, Maduna Ngobeni, said these prices excluded the costs of connecting the plants to the grid.
Including this cost took the price to about R1.01.The minister said established players had partnered with Thabametsi and Khanyisa.
The invitation to bid was issued in terms of the government’s plan to add 2 500MW to the coal base load generation capacity by independent power producers.
The coal programme is the first base load programme that allows the private sector to generate energy using coal resources.
There will be two bid windows for the programme.
Ngobeni said the department was looking at cleaner technology for the second bid window but had to evaluate the cost implications.
He anticipated the request for proposals for this bid window to be released in the third quarter of2017-18.