Richards Bay massive gas-to-power plant ‘will happen’

The gas-to-power station in Richards Bay will be comparable with the 5000 megawatt Pembroke plant in Wales, which generates enough power to supply 3.5 million homes and businesses

A THRONG of development disappointments for Richards Bay has knocked many Zululanders’ confidence in promised ‘game changer’ investments, such as the proposed R45-billion gas-to-power plant.

But Richards Bay Industrial Development Zone (RBIDZ) CEO Pumi Motsoahae said skeptics can rest assured this project will never be shelved.

RBIDZ CEO Pumi Motshoahae

Once operational, the massive 5 000 megawatt power station will convert imported liquefied natural gas (LNG) into electricity, which will be sourced to local industries and residential zones, ultimately transforming the town into ‘the gas hub of South Africa’.

‘This project is definitely going to happen. I am bullish and we must all maintain a positive attitude.’

He confirmed the IPP (Independent Power Producer) tender process is intended to commence with the issue of a Request for Qualification (RFQ) in September.

‘The envisaged gas procurement process will be formulated in accordance with the Integrated Energy Plan and the Integrated Resource Plan.

‘These have been published for public comment, with the comment period only closing at the end of this month.’

It is anticipated that the issuing of the RFQ to the request for proposal (RFP) will take at least 10 months.

During this time, the IPP office will reveal the response submission date, announce the pre-qualified bidders, issue the approved RFP, engage between the pre-qualified bidders and Department of Energy and only then release the final RFP.

Motshoahae said the commencement of construction of the plant will then depend on how long bidders are given to respond to the RFP.

‘It is likely to be well over six months. Bids will also need to be evaluated and a preferred bidder selected.

‘The preferred bidder will need to reach financial close and a power purchase agreement will need to be entered into before construction can commence. This will take about two years.

‘Construction will take approximately three years, and we hope the plant would be operational in 2022.’

Speaking at a panel discussion last week in Richards Bay, Head of Risk, Strategy and Combined Assurance at the Department of Energy’s IPP office, Sandra Coetzee, said they expect the development to attract substantial foreign direct investment and create more than one million permanent jobs over the next 25 years.

But she emphasised that patience will indeed be a virtue for efficient planning of the ‘sizable and complex’ project.

‘This will be a hallmark for the country’s renewables programme, so we need to ensure there is predictability, certainty and backstopping from government’s side to make the project bankable.

‘Other renewable projects have been minute in comparison to this one.’


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Mia Moorcroft

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