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Publish Date : 18-Mar-2016

Energy firms in Africa are gearing up to supply South Africa with electricity following the publication of the determination by the Department of Energy (DOE) to procure nearly around 3 750 Mega Watts (MW) of base-load electricity from cross-border sources. This move indicates a reversal of the decades-old trend that saw South Africa exporting power to its neighbours.

Shumba Energy managing director, Mashale Phumaphi said, This has been incorporated into the countrys Integrated Energy Plan. We have already had engagements with both governments [Botswana and South Africa] to determine the course of action.

Shumba Energy is in the process of developing two baseload coal-fired projects suitable for cross-border energy procurement: the Mabesekwa Export Independent Power Producer (IPP) in the north-east of Botswana, and the Sechaba Coal IPP near Palapye.

These two projects are ideally positioned to handle the complete investment required to provide bankable energy to the cross-border grids of southern Africa, added Phumaphi.

Working of the cross-border power procurement will be in the same way as the Renewable Energy Independent Power Producer Procurement Program (REIPPPP), with the Department of Energy adjudicating bids and Eskom being the nominated buyer.

Potential IPPs like Shumba seeks further clarification as to how the adjudication process would work. The possibility includes two ways either through a tender process whereby they would release a Request for Proposal (RFP), or through direct negotiations.

An RFP would define what bidders would have to do to qualify, also to include presenting indicative tariffs which would then lead to preferred bidder status. However, there may not be sufficient bidders to supply the 3 750 MW that has been allocated. So it might mean they engage via direct negotiations, adds Phumaphi.

Two projects from Shumba would amount to 900MW. Additionally, there are more projects on the go in Botswana, and there may be one or two from Mozambique and Zimbabwe.

Major challenges includes connecting to the grid. Location of Shumbas Sechaba Coal IPP is in the eastern side of the country, approximately 350km from Gauteng, the expected final consumer of the power.

Phumaphi said, The Botswana Power Corporation will connect us via a 400KV (high voltage) power line to a sub-station located 25km away. From there it would be connected into cross-border transmission infrastructure. Additional work is required for the Mabeskwa Export IPP.

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