Finance and Economic Opportunities

What is the state of readiness for the Municipal Energy Resilience Project, including: 

(a) the business case

The business case for the MER Initiative has been completed. 

(b) the municipality and project identification of each participating municipality as indicated by his Department’s phased approach

Following the RFI process, potential pioneering project groupings have been identified. Detailed municipal energy data input sheets – covering both technical and financial data – are currently being gathered from the candidate municipalities. The data is being used to undertake pre-feasibility analyses for the potential pioneering project groupings. This work requires ongoing engagement and co-development with the relevant municipalities and will lead to the development of the pioneering projects roadmap(s) by November 2021.

(c) the detailed plan of Phase 1

Phase 1 of the MER Initiative involves the development of the business case (see (a) above), a municipal readiness evaluation, a request for information (RFI) process, pre-feasibility of potential pioneering projects and the roadmap development of the pioneering projects. 
The municipal readiness evaluation process was explained in response Question 16 in Provincial Parliament Question Paper 8. 

The business case report indicated that the renewable energy projects being identified by municipalities were all at a conceptual stage, and so a decision was taken to undertake an RFI to understand what types and scales of renewable energy projects are already mature enough for consideration in the MER Initiative. The results of the RFI are detailed further in (d) below. The RFI submissions were used to identify potential pioneering projects, which are currently being taken through a pre-feasibility assessment as is outlined in (b) above.  Once the pioneering projects have been further scoped through the above process, a roadmap outlining how each of these would be implemented, along with timelines, will be developed. 

(d) how many submissions were received from the request-for-information process in both the first call and the extended period of the deadline 

The RFI went live on 11 June 2021, with an original closing date of 12 July 2021. The Department of Economic Development and Tourism issued the RFI extension notice on 8 July 2021 extending the deadline by one week to 19 July 2021. The submissions received were as follows:
•    Between the opening of the RFI on 11 June and the announcement of an extension on 8 July 2021, 3 private submissions and 0 municipal submissions were received.
•    Between the date of the extension announcement on 8 July 2021 and the original closing date on 12 July 2021, a further 14 private submissions and 1 municipal submission were received.
•    Between 12 July 2021 and 19 July 2021, a further 65 private submissions and 14 municipal submissions were received.
The totals for the RFI were 82 private and 15 municipal submissions. Note that two of the municipal responses had 6 project submissions each resulting in a total of 25 municipal project submissions, bringing the grand total to 107 project submissions.

(e) what the reason for the extension was?

The MER Initiative team promoted the RFI through several channels, including energy industry association. Feedback was received from the officials and directors of these industry organisations that their members were not responding timeously primarily due to the following:
•    The financial closing date at the end of July 2021 of the Risk Mitigation Independent Power Producer Purchasing Programme (RMIPPPP) of the Department of Mineral Resources and Energy (DMRE)
•    The closing date of August 2021 for the responses to the Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) of the DMRE
•    Private energy intensive users had been requesting responses to tenders for the Electricity Regulations Act (ERA) Schedule 2 licensing exemption up to 100MW, which was announced by the President the day before the RFI opened.
•    Given that the MER RFI was not compulsory for future procurement processes, developers were prioritising the above three activities over the MER RFI.
The industry representative organisations indicated that due to the above, their members would be more likely to be able to submit project responses should the submission deadline be extended by one to two weeks.

We also received requests for an extension from four private developers, each requesting two weeks’ extension. The private developers presented similar reasons to those above.

Likewise, during follow up engagements with municipalities, the MER Initiative team was informed that the municipalities were struggling to compile submissions given the workload due to several issues and priorities (including budget finalisations by end of June). Municipalities indicated that they would be able to prepare and submit potential projects if they receive extension of one to two weeks.

As of 25 June, the RFI landing webpage had already had more than 1000 views, which indicated interest but without the conversion into submissions.

Due to the slow rate of response up to 8 July, which would have negatively affected the evaluation process and ultimately the identification of pioneering projects, the MER Initiative team decided to extend the submission deadline by one week.