South Africa has awarded no generating capacity in the first round of its gas-to-power procurement programme. The Department of Electricity and Energy announced the outcome on October 28 after evaluating four bids. The result leaves the entire 2,000 megawatts sought in that round unawarded, despite proposals offering more capacity than the government had requested.
The department said the bids, received on May 29, offered a combined 2,830 megawatts. None passed the mandatory functional requirements. Among the main problems was an inability to provide the required assurances about gas supply. Engineering News also reported the announcement, confirming that no preferred bidder had been selected. This is a procurement outcome; it does not describe the closure of operating power stations.
Why the fuel supply matters
The fuel question reaches beyond the proposed plants. The department says South Africa imports most of its gas from Mozambique and has no liquefied-natural-gas receiving terminal. A generator needs a dependable source of fuel, alongside the equipment that turns it into electricity. Offering enough generating capacity therefore does not, by itself, establish that a project can deliver power reliably.
Writing in Daily Maverick on October 28, energy analyst Chris Yelland described the investment problem as a circular dependency. Power developers need credible long-term fuel arrangements to secure finance, while investors in gas infrastructure need confidence that customers will buy enough gas. His article is commentary, but the distinction helps explain why a tender can attract developers and still produce no award.
Yelland also argues that the outcome raises questions about how procurement is coordinated with the infrastructure and commercial arrangements needed to support it. That is an assessment of the programme’s design, rather than a finding that any particular company broke the rules. The available announcement does not provide individual evaluation reports that would allow readers to compare the four bids’ shortcomings.
What to watch next
Minister Kgosientsho Ramokgopa said the government would continue pursuing gas-to-power. Further information is promised before the end of 2026, with any subsequent procurement subject to the necessary approvals. The announcement provides no firm replacement bidding timetable. Businesses following the programme should therefore distinguish that forthcoming update from an invitation to bid or a construction start date.
Our assessment is that the next useful milestones will be concrete: revised tender requirements, demonstrable fuel arrangements, the infrastructure needed to deliver that fuel and an achievable timetable. Those details would show how another round addresses the obstacle exposed here. For electricity users, Wednesday’s announcement establishes a delay in procuring prospective capacity; it does not quantify a change in household bills or immediate power availability.
