South Africa plans 3 power ships, renewable energy investments to tackle crisis
Minister of Mineral Resources and Energy Gwede Mantashe announced eight preferred bidders in the government’s emergency risk mitigation programme.
- March 21, 2021, 09:10 IST
Minister of Mineral Resources and Energy Gwede Mantashe, on Thursday, announced eight preferred bidders in the government’s emergency risk mitigation programme, which will enable independent power suppliers to supplement the electricity produced by the sole national supplier, Eskom.
State-owned Eskom is in serious financial crisis. The electricity utility has resorted to increased power outages across the country over the last decade, citing outdated equipment and heavy reliance on coal and diesel.
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Mantashe said the vendors were selected based on the bidding process which began in August last year.
As part of the emergency plan, Karpowership SA, a subsidiary of Turkish company Karadeniz, will dock three mega-ships that produce electricity from gas at the industrial hubs of Coega, Richards Bay and Saldanha.
Karadeniz converts old cargo carrier ships into floating power ships that sail and dock in areas which need electricity. The power is generated in an onboard substation, feeding directly into the country’s power grid system.
"The solutions provided by these preferred bidders are from a combination of technologies that includes solar, wind, liquified natural gas and battery storage," Mantashe said.
"These eight projects will inject a total private sector investment of 45 billion rand (USD 3.08 billion) into the South African economy, with an average local content of 50 per cent during the construction period.
"South African entity participation from these projects is 51 per cent with black ownership at 41 per cent," Mantashe said, adding that about 3,800 job opportunities would be created during the 18-month construction period and a further 13,500 during the 20-year Power Purchase Agreement term.
"Energy security of supply is the backbone of any economy. It acts as a stimulant and catalyst to economic growth and development.
"Our country has become accustomed to intermittent electricity supply. Along with that the continued rising price structure — both these factors have an adverse impact on the ability of the economic sectors to deliver optimal production as well as the ability of the citizens to access electricity for household use," the minister said.
Mantashe said the private sector’s active participation has demonstrated a sustained private sector interest in South African’s energy landscape.
"All compliant bids were subjected to local and international benchmarking which is necessary to ensure that we receive value for money as required by the legislation," the minister said.
He also announced another round of ‘Request for Proposal’ for the procurement of 2,600 megawatts of renewable energy, which will close on August 4 this year.
"We intend to release four more ‘Requests for Proposals’ within the next 12 months. These will include 2,600MW from renewable energy, 3 000MW from gas, 1,500MW from coal, and 513MW from battery storage," Mantashe concluded.