South Africa’s Department of Minerals and Energy on Tuesday announced that it has short-listed five parties — out of 11 applicants — for new peaking-power generation.
The five applicants short-listed are the AES Consortium, the Inkanyezi Consortium, the International Power Consortium, Tata-J&J Consortium and the YTL Consortium.
The AES Consortium consists of United States power group AES Ebute Holdings, Tiso Energy, Lereko Energy and Rand Merchant Bank as financial adviser.
The Inkanyezi Consortium is made up of French group Suez Energy and empowerment group African Legend Consortium, with Suez Energy International as financial adviser.
The International Power Consortium comprises British group International Power, Africa Infrastructure Investment Managers, Pan African Independent Producers and HSBC Bank as the financial adviser.
Tata-J&J Consortium is made up of Indian group Tata Power, Tata Africa Holdings, the J&J group and Standard Bank as the consortium’s financial adviser.
The YTL Consortium is made up of Malaysian group YTL Power International, Kagiso Trust Investments, Yard Capital and Fieldstone Capital Holdings, and aloeCap is the grouping’s financial adviser.
The winners of the new peaking-power generation capacity will build one or two oil-fired open-cycle turbine power stations with a combined capacity of about 1 000 megawatts, operating peaking plants at sites in the Eastern Cape and KwaZulu-Natal.
The two peaking-plant power stations are expected to be fully operational by October 2008.
“We need to get the new plants up by October 2008 or we will end up with blackouts,” Deputy Director General of Minerals and Energy for electricity and nuclear energy Nelisiwe Magubane said.
The government tendered for the new peaking-power capacity as the growth in the economy has resulted in demand growing to such a point that it will soon outpace the supply of power.
This has resulted in state-owned electricity utility Eskom bringing on new capacity as well as independent power producers being brought into the system of power production.
The five short-listed bidders have six months to submit their bid documents, which are due by February next year.
The naming of the winners of the bidding process for the Eastern Cape and KwaZulu-Natal power plants will be made by June 2006, Magubane said.
Construction of the new power stations is to begin in the first quarter of 2007, she added.
As a “rule of thumb”, a power station that will generate 1 000 megawatts of power will cost $1-billion to build, Magubane said. However, given the competitive bid process, the government expects the cost to come in lower than $1-billion, she added.
The site for the Eastern Cape power station is likely to be Port Elizabeth, while the north coast between Durban and Richards Bay is the proposed site for the KwaZulu-Natal power station.
The two independent power stations will sell the peaking power they produce to power utility Eskom, with the two new power stations expected to produce power for a period of 15 years or more.
Magubane said the investments by the two independent power plants and Eskom are likely to see an increase in electricity prices in the future.
South Africa is budgeted to spend R93-billion over the next five years to boost the country’s power supply, with Eskom set to make R84-billion in investments and independent power producers R9-billion. — I-Net Bridge