South Africa’s 2,000MW gas tender fails
By the AFREEQUE newsroom, based on Businessday
South Africa’s first tender to generate 2,000 megawatts using gas selected no preferred bidder, owing to insufficient guarantees on supply. The government still wants to develop gas-fired electricity, but declining Mozambican imports threaten industry, according to the Department of Electricity and Energy and Reuters.
South Africa’s tender for private producers to generate 2,000 megawatts of gas-fired electricity has ended without a preferred bidder being selected. The South African Department of Electricity and Energy attributed the failure to candidates’ inability to guarantee their gas supply, according to a statement published on Wednesday.
The office responsible for independent power producers received four bids in May, representing a total capacity of 2,830 megawatts. The tender specifications required guarantees on gas availability, Minister Kgosientsho Ramokgopa said.
South Africa imports most of its gas from Mozambique, where declining volumes are threatening domestic industrial users. The Industrial Gas Users Association of Southern Africa described the failure as a “disaster” and estimates that nearly 75,000 direct jobs and annual economic activity worth 700 billion rand, or about $42 billion, are threatened by supply difficulties, Reuters reports.
Pretoria is seeking to develop gas to reduce its dependence on coal-fired power stations and is preparing its first liquefied natural gas import terminal, with ExxonMobil and Eskom as the main customers. No date has been announced for a new procurement process, despite South Africa maintaining its targets for generating electricity from gas.
