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Independent Power Producer Procurement Programme

The Cogeneration Independent Power Procurement Programme

The Cogeneration IPP procurement programme will procure energy through three technologies - Waste to Energy, Combined Heat and Power (CHP), and Industrial Biomass.

The Cogeneration IPP procurement programme has two common characteristics which is that the fuel and/or energy source originates from an underlying industrial process and the cogeneration facility is coupled to the industrial process of a host plant.

Waste to Energy

Projects utilising or recovering waste or underutilised heat or energy and any other non-renewable energetic waste emitted from an industrial process. May or may not co-produce Useful Thermal Energy in addition to Energy Output.

Combined Heat and Power

Conventional Fossil Fuel Combined Heat and Power (CHP) projects that must co-produce Useful Thermal Energy in addition to Energy Output (i.e. operate in combined heat and power mode).

Industrial Biomass

Projects utilising energy source (energy input) which is a co-product, by-product, waste product or residual product of an industrial process and or sustainable agricultural or forestry activity, to produce Energy Output. May or may not co-produce Useful Thermal Energy in addition to Energy Output.

 


Notices and Alerts

Delay Notice

The Department would like to bring to your attention that the Preferred Bidders for the Cogeneration IPP Procurement Programme First Bid Submission have been announced. The announcement of the Preferred Bidders in respect of the Second Bid Submission Phase under the Cogeneration IPP Procurement Programme has been delayed. New announcement dates will be communicated in due course through the website and Briefing Note.

Bid Window 1 of the CoGen IPP Programme is targeting existing generation plant whereby electrical energy generated in excess of a determined baseline, will be purchased in terms of a Power Purchase Agreement (PPA). Bid Window 1 has four submission dates as shown in the table below.

Bid Window 1 Response Submission dates in 2015 Bid Notification

1a 11 August 22 July - 31 July
1b 1 September 13 August – 21 August
1c TBA TBA
1d TBA TBA

 

The CoGen Bid Window 2 will follow Bid Window 1 and will be mainly targeting new build generation facilities.

The current CoGen Determination is for 800 MW. An amendment is in process which could increase the Determination to 1800MW.

 

Please note that the CoGen RFB is now available for download. Please register, log onto the website, through the “Sign In” tab above and follow the registration and payment instructions.

Delay Notice

The Department would like to bring to your attention that the Third and Fourth Bid Submission Dates have been postponed. New dates will be communicated in due course through the website and a Briefing Note.

Milestones

Bid Window 1c -

Bid Submission Notification Date: Bidders to notify the Department, in the form of a Bid Submission Notification Form, of the information required pursuant to clause 8.7 of Part I (General Requirements, Rules and Provisions) of this RFB if submitting a Bid Response in respect of the Third Submission Date
Bid Notification closes for Bid Window 1c
Third Bid Submission Date

Bid Window 1b - 1 September 2015

Bid Submission Notification Date: Bidders to notify the Department, in the form of a Bid Submission Notification Form, of the information required pursuant to clause 8.7 of Part I (General Requirements, Rules and Provisions) of this RFB if submitting a Bid Response in respect of the Second Submission Date 13 Aug 2015

Bid Window 1a - 11 August 2015

Issue of RFB 04 Jun 2015

About the Cogeneration (CoGen) IPP Procurement Programme

Cogeneration (CoGen) means for the Cogeneration IPP Programme in South Africa, either the simultaneous generation of Energy and useful thermal energy (Combined Heat and Power - CHP) or the generation of Energy with possible generation of useful thermal energy (Waste to Energy and Industrial Biomass) at a Facility which is coupled to a Host Facility, and which, for this CoGen IPP Procurement Programme, must satisfy the respective functional requirements shown in the table below.

CoGen Technologies
  Waste to Energy Combined Heat and  Power (CHP) Industrial Biomass (BM)
Description Projects utilising or recovering waste or underutilised heat or energy and any other non-renewable energetic waste emitted from an industrial process. May or may not co-produce Useful Thermal Energy in addition to Energy Output.  Conventional Fossil Fuel Combined Heat and Power projects that must co-produce Useful Thermal Energy in addition to Energy Output (i.e. operate in combined heat and power mode). Projects utilising energy source (energy input) which is a co-product, by-product, waste product or residual product of an industrial process and or sustainable agricultural or forestry activity, to produce Energy Output. May or may not co-produce Useful Thermal Energy in addition to Energy Output.
Primary fuels
  1. Waste heat;
  2. Process furnace off-gas; and
  3. Any other non-renewable energetic waste emitted from an industrial process.
  1. Coal; 
  2. Waste or discard coal;
  3. Natural gas; and
  4. Primary liquid fuels. 
  1.  Sugar bagasse; field trash and other sugar related renewable wastes associated with the Host Facility process; and
  2. Mill wastes, including chips, saw dust, shavings, soaps, methanol, sludges, bark and black liquor.
  3. Agricultural or Forestry residue including alien vegetation clearing.
Exceptions from COFIT Guideline (primary fuels). Waste or discard coal is not an acceptable primary fuel for Waste to Energy Projects.  Waste or discard coal is an acceptable primary fuel for Combined Heat and Power Projects, in addition to coal which was included in the COFIT Guideline. Bidders are not limited to primary fuels described in COFIT Guideline. The mill wastes described by the COFIT Guideline should merely be considered examples of the types of mill waste that may be utilised as a primary fuel.
Percentage primary fuel (of the total annual fuel energy input, i.e. per contract year).    Minimum of sixty percent (60%) must be sourced from the primary fuel classifications above. Minimum of seventy-five percent (75%) must be sourced from the primary fuel classifications above.
Supplementary fuel requirements.

No limitation on fuel type of supplementary fuel for the remaining percentage of total fuel energy input. 


Multiple supplementary fuels are allowed as long as the aggregate does not compromise the primary fuel minimum percentages above. 


All supplementary fuels must come from any one (or more) of the primary fuels listed for each technology above. 

Efficiency requirements for the Facility. No minimum efficiency requirements, however, Bidders must inform the efficiency values in their proposal if the Facility produces Useful Thermal Energy. Annually, must achieve more than sixty five percent (65%) efficiency. No minimum efficiency requirements, however, Bidders must inform the efficiency values in their proposal if the Facility produces Useful Thermal Energy.  tet
Allowable technologies (energy conversion technology to Energy and Useful Thermal Energy, as appropriate).
  1. Reciprocating engines;
  2. Gas turbine; and
  3. Waste heat boiler and steam engine.
  1. Reciprocating engines; 
  2. Combined cycle gas turbines;
  3. Gas turbine and waste head boiler; and
  4. Boiler and steam turbine.
Boiler and steam turbine. 
Linkages with the Host Facility  All primary fuel must be supplied form the Host Facility.  All Useful Thermal Energy must be supplied to the Host Facility.  All primary fuel must be supplied from or directly associated with the Host Facility. 
Electrical Connection

All Energy Output from the Facility must connect directly to the network of the Host Facility and all Energy Output must be generated only from the Facility. 


The Host Facility must have a demonstrable System Connection Agreement in place by the time of Commercial Operation Date (COD). 



Cogeneration IPP Programme (CoGen)

CoGen refers to a number of different technologies that are grouped into a single procurement programme. The common characteristics of the programme are:

  • fuel/energy source originates from an underlying industrial process;
  • CoGen is coupled to the industrial process of a host plant;
  • For the Waste to Energy Technology, the fuel is a waste by-product of an industrial process and is typically waste heat or furnace off-gas;
  • For the Combined Heat and Power (CHP) technology which is conventional cogeneration as understood internationally or Combined Heat and Power (CHP), a fuel source is used to generate steam and electricity simultaneously with the steam being eventually used in the industrial process;

Technology

Types of CoGen Facilities

Technology: Waste to Energy facilities

Waste to Energy facilities are characterised by an energy resource that consists of waste heat or gases from an industrial process. These may be either high temperature exhaust gases that may feed a heat recovery steam generator or gases that may be used as a fuel as they contain a combustible component. Discard coal is excluded from Waste to Energy categorisation, but is permissible in Cogeneration category.

Waste to Energy facilities will utilise waste energy or waste gas their primary fuel, but it is noted that they are allowed to augment this with up to 40% of other fuels, either renewable or non-renewable.

At the option of the proponent of the Facility, it is proposed that Waste to Energy facilities be relieved of the mandatory obligation to simultaneously feed “useful thermal energy” back to the Host, as the waste energy from the Host (“free fuel”) already satisfies the efficiency objective of this Programme. Hence there is no minimum requirement of useful thermal energy provision to the Host under the Waste to Energy categorisation.

It is expected that these facilities will operate whenever they have waste heat or gas available and when the energy source is not available, they will not be able to operate. As a consequence these facilities will have little control over their despatch except to the extent that they can reduce output by not consuming fuel which will then be wasted.

In conclusion Waste to Energy Facilities will need to operate whenever they can and must be self-despatched.

Technology: Combined Heat and Power facilities

Combined Heat and Power facilities must simultaneously produce heat/steam for the underlying industrial process (Host) and electricity for Host consumption with any excess for export. The fuel for Combined Heat and Power facilities is defined as being a primary fuel, namely, coal (including discard coal), natural gas or oil which has the characteristic of being available for use as required and not being wasted when a plant does not run.

The main characteristic of Combined Heat and Power facilities is to strive to achieve efficient use of the natural resource (fuel) and hence such facilities will be required to supply at least 10% of its energy production as heat (typically steam), and be designed to operate at combined electrical and thermal efficiency of greater than 65% .

In addition, the power Facility is likely to depend on the Host’s industrial facility to condense all or part of its useful thermal energy (steam) within the industrial process. The result is that in the absence of the industrial process, the power Facility cannot run unless another means to condense steam is made available.

In conclusion Combined Heat and Power facilities must be self-despatch due to the interdependency between the industrial process and the power plant.

Technology: Industrial Biomass facilities

Industrial Biomass facilities utilise renewable fuel such as by-products from the pulp and paper industry or the sugar industry and can use residue from agriculture and forestry that are primary inputs to the industrial process. The CoGen IPP Programme requires the Facility to burn at least 75% of its total annual fuel consumption from a renewable fuel that is linked to the Host industrial process.

The Industrial Biomass facilities are tied to the Host industrial process.

Industrial Biomass facilities must be self-despatch.


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