Friday, January 30, 2015

Electricity Supply Situation: Department of Energy Initiatives

Engineering News Online reported in an article published on 13 January 2015 that `DoE tests market for near-term power demand reduction offers’. It reports that the Department of Energy (DoE) has issued a formal appeal for companies and individuals to provide it with information on possible near-term solutions to reduce or shift electricity demand, as well as to immediately improve supply. Responses to the request for information (RFI), issued by its Independent Power Producer (IPP) Office in mid-December with responses to be submitted by 2 February 2015, will guide the design of future procurement processes.

The RFI, issued to gather information and test the market for innovative demand response and/or distributed generation solutions following the formulation of the Government’s `Five-Point Plan’, is particularly interested in companies and individuals with dispatchable demand response solutions, as well as in energy efficiency, load management and fuel switching proposals.

A second Engineering News Online article published on 17 January 2015 reports that `IPP body welcomes coal baseload tender, but calls 1 600 MW allocation ‘insufficient’’.

This records that the DoE issued an RFP in December 2014 indicating it is seeking to procure a total of 1 600 MW – 1 000 MW domestically and 600 MW from the rest of the region – during the first phase of a programme for 2 500 MW outlined in a 2012 Ministerial determination to be procured “in the quickest possible time”. The DoE will conduct subsequent yearly competitive bidding rounds.

The article also reports that:

  • A deadline of 8 June 2015 has been set for bid submissions and independent power producers (IPPs) have been requested to notify the department of their intention to bid by 11 May;
  • Only projects smaller than 600 MW and which can be operational by 2021 will be considered, but an incentive has been built into the tender for those projects that are able to beat that deadline; and
  • a price cap of 82c/kWh has been set for the first bid window and the RFP stipulates that South Africans own 51% of the project company set up to develop the power stations, including 30% black economic–empowerment participation.
Copies of the full Engineering News Online articles are available at and   (Source: Creamer Media’s Engineering News at

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