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The DMRE's RFI in respect of the design of a risk mitigation power purchase programme

Fasken
Reading Time 2 minute read
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  • The Department of Mineral Resources and Energy (the “Department”) intends to launch a Risk Mitigation Power Purchase Programme (“RMPPP”) to alleviate the current electricity supply constraints in the immediate to medium-term. This is as envisaged in the Integrated Resource Plan promulgated in October 2019.
  • On 13 December 2019, the Department issued a request for information in respect of the design of a RMPPP (the “RFI”). The objective of the RFI is, amongst other things, to enable the Department to:
    • consider the various options available to procure power generation capacity that can be connected to the grid as expeditiously as possible and at the least possible cost; and
    • to design an appropriate procurement framework and finalise any regulatory amendments that may be required.
  • The key requirement of the RMPPP will be to procure between 2000 MW – 3000 MW of power generation capacity from projects with short lead times. As such:
    • projects under the RMPPP must be able to connect at intervals of between 3 to 6 months and 6 to 12 months from the issuance of the notice to proceed;
    • existing projects, projects that are currently under construction and new projects, from all technologies, could be considered for procurement; and
    • Power Purchase Agreements with tenures of 3 years, 5 years, 10 years, 15 years and 20 years are on offer.
  • Although no requirements have yet been prescribed in respect of the financing of projects under the RMPPP, Independent Power Producers have been requested to submit as much detail as possible with regards to the proposed (or existing) financing of their project(s).
  • All responses to the RFI must be submitted to the Department by not later than 31 January 2020, at the IPP Office. In the interim, all queries and requests for clarification are to be submitted by no later than 22 January 2019.
  • Should you require any assistance in relation to the RFI, please do not hesitate to contact Ashen Jugoo at ajugoo@fasken.com or Katy Kay at kkay@fasken.com.

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