The Energy Regulator says it agrees with the draft ministerial determination to procure 1 000MW of new generation capacity from the Cross-Border Procurement agreement.
“New generation capacity must be procured or purchased to contribute towards energy security and accordingly, up to 1 000 megawatts (MW) should be procured from the Southern African Development Community (SADC) region from a range of technologies/sources,” the National Energy Regulator of South Africa (NERSA) said on Friday.
The energy regulator explained that this programme is implemented in order to close the widening energy gap, as articulated in the Integrated Resource Plan for Electricity 2019 – 2030 (published by Government Notice No. 1360 of 18 October 2019 in Government Gazette No. 42784) ('the IRP 2019'), and as is currently being experienced in South Africa.
“The energy regulator said the energy capacity shall be procured from a range of energy producers from the region.
“The range of energy producers from the region will either be utilities from the host countries or independent power producers that are legally operating within the host countries,” NERSA said.
The energy capacity shall be procured by Eskom Holdings SOC Ltd and shall entail: the procurement of electricity through one or more processes that are fair, equitable, transparent, and cost-effective, and the form of which shall be determined by Eskom; and the conclusion of Power Purchase Agreements (PPAs) in respect of the electricity, for which the duration will be agreed upon between Eskom and the energy producers from the region.
“The electricity procured or bought shall target the South African Grid as soon as reasonably possible, considering all relevant factors, including prevailing energy security risks and the time required for efficient procurement,” Nersa said.
In addition, the Energy Regulator concurred with the draft ministerial determination for the procurement of 2 000MW of new generation capacity from the Load Shedding Reduction Programme.
As part of the programme, up to 2 000MW should be generated from a range of energy technologies/sources in accordance with the short-term risk mitigation capacity allocated under the heading 'Other', for the years 2025 to 2028 of the Integrated Resource Plan for Electricity 2019 – 2030 (published by Government Notice 1360 of 18 October 2019 in Government Gazette No. 42784) ('IRP 2019').
The programme requires that the new generation capacity is established from energy generated from independent power producers.
The electricity produced from the new generation capacity ('the electricity') shall be procured by Eskom Holdings SOC Ltd and shall entail: the procurement of the electricity through one or more processes that are fair, equitable, transparent, and cost-effective; the form of which shall be determined by Eskom, and the conclusion of power purchase agreements (PPAs) in respect of the electricity, which PPAs shall be aligned with short-term power purchase agreements.
“The electricity procured or bought shall target connection to the Grid as soon as reasonably possible, taking into account all relevant factors, including prevailing energy security risks and the time required for efficient procurement,” the energy regulator said.
The Energy Regulator also concurred with the draft ministerial determination for the procurement of 800MW of New Generation Capacity from the Emergency Procurement Programme as follows:
New generation capacity must be procured or purchased to contribute towards energy security. Accordingly, up to 800 megawatts (MW) should be procured from a range of energy technologies/sources in accordance with the Emergency Generation Procurement Programme allocated under the heading 'Other', for the years 2029 to 2030, in Table 5 of the Integrated Resource Plan for Electricity 2019 – 2030 (published as Government Notice No. 1360 of 18 October 2019 in Government Gazette No. 42784) ('the IRP 2019').
The new generation capacity shall be procured from a variety of local generators, including independent power producers (IPPs).
The electricity shall be procured by Eskom Holdings SOC Ltd and shall entail: the procurement of the electricity through one or more processes that are fair, equitable, transparent, and cost-effective, and the form of which shall be determined by Eskom; and the conclusion of power purchase agreements (PPAs) in respect of the electricity, which PPAs shall be aligned to the short-term power purchase agreements; and
The electricity procured or bought shall target connection to the Grid as soon as reasonably possible, considering all relevant factors, including prevailing energy security risks and the time required for efficient procurement
The Energy Regulator noted the approved draft Reasons for Decision on the concurrence with the section 34 ministerial determinations for the procurement of 3 000MW of Combined Cycle Gas Turbine (CCGT) and 1 000MW Standard Offer Programme (SOP) by Eskom.
The detailed Decisions and Reasons for Decision documents regarding the above decisions will be available on the NERSA website at www.nersa.org.za in due course.
Source: South African Government News Agency