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

The report argues that the RM4P procurement process was designed for gas projects, imposing restrictions that increased renewable energy bid tariffs by over 50% and made gas-dominated projects appear erroneously cost-competitive. Modelling suggests that a technology-agnostic, system-integrated approach could halve tariffs, saving Eskom R8 billion annually (R160 billion over the PPA term) while eliminating the 4 million tonnes of annual CO2 emissions produced by the current preferred bidders, 90% of which come from three Karpowership projects.

• The RM4P request for proposals (RFP) contained rules and restrictions that disproportionately increased bid tariffs for renewable-dominated projects (solar PV, wind, and energy storage systems) by more than 50%, while having little to no impact on gas-dominated projects.
• Modelling indicates that realigning the RFP to be technology-agnostic and integrating it with existing grid and storage assets could reduce tariffs to R0.72/kWh, potentially saving Eskom and consumers R8 billion per year, or R160 billion over the term of the power purchase agreements.
• The current preferred bidders are projected to produce over four million tonnes of CO2 emissions annually, with the three Karpowership projects accounting for 90% of this total.
• Specific RFP rules, such as the prohibition of charging energy storage systems from the grid at night and the 'Mingen' (minimum generation) rules, significantly penalise renewable projects by forcing the oversizing of storage and requiring the curtailment of output.
• The RM4P's minimum annual contracted capacity rule requires a 50% capacity factor, which is atypical for the open cycle gas turbines or reciprocating gas engines used by the Karpowership projects, which normally operate at no more than 10%.
• The procurement process exposes Eskom to significant financial risks because fuel costs for gas-based projects are treated as pass-through costs, leaving the buyer vulnerable to global LNG price volatility and US dollar exchange rate fluctuations.

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} }