The South African Risk Mitigation Power Producers Procurement Programme (RM4P): A techno-economic evaluation of the underlying design of the request for proposals (RFP) and the resultant impact on the outcomes of the RM4P

This techno-economic evaluation by Clyde Mallinson analyzes the South African Risk Mitigation Power Producers Procurement Programme (RM4P). The report argues that the Request for Proposals (RFP) was designed for gas-dominated projects, creating restrictive rules that unfairly penalize renewable energy and storage projects, thereby making gas projects appear more cost-competitive than they are. The author suggests that a technology-agnostic, system-integrated approach could significantly reduce tariffs and carbon emissions.

• The RM4P's RFP design disproportionately penalizes renewable-dominated projects (solar PV, wind, and energy storage systems), increasing their bid tariffs by more than 50% on average. This effect makes gas-dominated projects, specifically the three Karpowership projects, appear cost-competitive when they are not.
• Modelling indicates that realigning the RFP to be technology-agnostic and integrating it with existing grid and storage assets could reduce tariffs from R1.60/kWh to R0.72/kWh. This would result in annual savings of eight billion rand (R8b) for Eskom and South African consumers, totaling 160 billion rand over the term of the power purchase agreements.
• The current preferred bidder projects are expected to produce over four million tonnes of CO2 emissions annually, with the three Karpowership projects accounting for 90% of this total. An optimal system procurement programme would eliminate gas and result in zero carbon emissions.
• Specific RFP rules create significant inefficiencies for renewables: the prohibition of charging energy storage systems from the grid at night forces the oversizing of storage by nearly a factor of two. Additionally, the minimum generation (Mingen) rule—requiring supply of only 25% of contracted capacity on instruction—forces renewable projects to curtail and waste output.
• The RM4P creates high energy dependence and financial risk by awarding 62% of total capacity and output to the three Karpowership projects. Because fuel costs for LNG, LPG, or diesel are treated as pass-through costs, Eskom is fully exposed to global commodity price volatility and dollar-rand exchange rate risks.
• The report recommends a revised procurement process based on locality-adjusted feed-in tariffs for wind and PV, and a lease-based model for energy storage systems (ESS). This new approach should allow ESS to be strategically placed on transmission and municipal distribution grids under the control of the systems operator.

APA

Mallinson, C. (2021). The South African Risk Mitigation Power Producers Procurement Programme (RM4P): A techno-economic evaluation of the underlying design of the request for proposals (RFP) and the resultant impact on the outcomes of the RM4P. Centre for Environmental Rights. https://cer.org.za/wp-content/uploads/2022/12/Annex-A-Mallinson-Report.pdf?x21779

Chicago

Mallinson, Clyde. The South African Risk Mitigation Power Producers Procurement Programme (RM4P): A techno-economic evaluation of the underlying design of the request for proposals (RFP) and the resultant impact on the outcomes of the RM4P. Centre for Environmental Rights, 2021. https://cer.org.za/wp-content/uploads/2022/12/Annex-A-Mallinson-Report.pdf?x21779.

Wikipedia

{{cite report |last1=Mallinson |first1=Clyde |title=The South African Risk Mitigation Power Producers Procurement Programme (RM4P): A techno-economic evaluation of the underlying design of the request for proposals (RFP) and the resultant impact on the outcomes of the RM4P |publisher=Centre for Environmental Rights |date=27 August 2021 |url=https://cer.org.za/wp-content/uploads/2022/12/Annex-A-Mallinson-Report.pdf?x21779 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mallinson2021south, author = {Mallinson, Clyde}, title = {{The South African Risk Mitigation Power Producers Procurement Programme (RM4P): A techno-economic evaluation of the underlying design of the request for proposals (RFP) and the resultant impact on the outcomes of the RM4P}}, institution = {Centre for Environmental Rights}, year = {2021}, month = aug, url = {https://cer.org.za/wp-content/uploads/2022/12/Annex-A-Mallinson-Report.pdf?x21779}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }