SA fails to award 2000MW gas-to-power tender

CHAMWE KAIRA

South Africa has failed to award any generation capacity under the first bid window of its 2000MW Gas Independent Power Producer Procurement Programme (GASIPPPP) after all four bidders failed to meet mandatory requirements for securing gas supplies.

The Department of Electricity and Energy (DEE) received four bids offering a combined 2830MW on 29 May 2026, exceeding the 2000MW capacity targeted under the first bid window.

However, none of the bidders met the mandatory functional criteria, largely because they could not provide sufficient assurances of gas supply as required by the tender.

The department said South Africa remains heavily dependent on imported gas, particularly from Mozambique, despite its potential domestic natural gas resources.

The country also does not have a liquefied natural gas (LNG) receiving terminal, presenting an additional constraint to securing reliable fuel supplies.

The first bid window was launched under the Gas Independent Power Producer Procurement Programme in line with South Africa’s Integrated Resource Plan (IRP) 2019 and IRP 2025.

Following stakeholder consultations, the department issued a revised request for proposals on 20 October 2025.

With no bidders meeting the mandatory requirements, no preferred bidders were appointed and no generation capacity was awarded.

Electricity and energy minister, Kgosientsho Ramokgopa said the outcome would not change the government’s commitment to incorporating gas-to-power into the country’s electricity mix.

He said the first procurement process had provided practical lessons on the infrastructure, commercial and institutional conditions needed to translate market interest into viable projects.

Gas-to-power is intended to support electricity supply adequacy and flexibility, with the IRP 2025 identifying it as an important component of South Africa’s future energy mix.

The department said the procurement process had highlighted the interdependence between tender requirements, technical feasibility, fuel supply arrangements, supporting infrastructure, affordability, environmental obligations and project readiness.

It said further engagement with bidders and other market participants, including original equipment manufacturers, lenders, gas suppliers and LNG terminal developers, would be prioritised to inform the future direction of the programme.

The department acknowledged the time and resources invested by the four bidders and other stakeholders in the first procurement round.

Any subsequent procurement process, including its requirements and timelines, will be subject to statutory, governance and procurement approvals.