The South African government's Independent Power Producer (IPP) Office will release a request for information (RFI) in March for possible domestic gas-to-power projects, as a precursor to a possible 3 000 MW tender that should arise before year-end. IPP Office head Karen Breytenbach indicated that the RFI would be used to inform a future request for proposals (RFP), which could be released into the market during the third quarter of the year.
Despite the IPP Office having been already widely lauded for its role in procuring nearly 4 000 MW of renewable energy through three competitive bidding rounds, Breytenbach acknowledged that the gas IPP programme included the additional dilemma of how and where to source gas, with SA having limited domestic production capacity at present and inadequate gas-transportation infrastructure.
The expectation was that any gas-to-power programme would have to be premised on the importation of liquefied natural gas (LNG). However, this would require the development of an import terminal or terminals, as well as pipelines to link IPPs with their primary-energy source.
The Eskom war room, which is being overseen by Deputy President Cyril Ramaphosa, also viewed the development of a gas-to-power sector as urgent and discussions on stimulating the sector, initially through imports, were reportedly progressing within the forum.
"The National Treasury and the DoE believe gas should play a role in the electricity mix. There will be an IPP procurement programme and we will anchor the gas imports with the IPP programme. From that anchor, we believe gas will then enter the market and will then start forming part of industrial development," Breytenbach outlined.