South Africa Planning RE Investments & 3 Power Ships to Tackle Power Crisis

South Africa has announced its new plans to ease the severe electricity crisis in the country, including three offshore power ships, greater use of solar and wind energy, and other renewable energy (RE) investments.

Minister of Mineral Resources and Energy Gwede Mantashe, had recently announced eight chosen bidders in the government’s emergency risk mitigation program, which will facilitate independent power suppliers to supply the electricity produced by the sole national supplier, Eskom.

According to the minister, state-owned Eskom is in a serious financial crisis. The electricity utility has resorted to increased power blackouts across the country over the last decade, calling outdated equipment and heavy reliance on coal and diesel.

Gwede Mantashe declared that the vendors were selected based on the bidding process which began in August last year. additionally, as part of the emergency plan, a subsidiary of Turkish company Karadeniz, Karpowership SA will anchor three mega-ships that produce electricity from gas at the industrial hubs of Coega, Richards Bay, and Saldanha.

Karadeniz turns old cargo carrier ships into floating power ships that sail and dock in areas that need electricity. The power is generated in an onboard substation, feeding directly into the country’s power grid system.

Speaking of the selected bidders, Mantashe told local press that “the solutions provided by these preferred bidders are from a combination of technologies that include solar, wind, liquified natural gas, and battery storage. These eight projects will inject a total private sector investment of 45 billion rands (USD 3.08 billion) into the South African economy, with an average local content of 50 percent during the construction period.”

“South African entity participation from these projects is 51 percent with black ownership at 41 percent,” 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 an 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 announced 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.

Also, he 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 added.