FIFI PETERS: Extra power could possibly be … coming to the grid actual quickly to try to alleviate the ache on Eskom’s grid and to hopefully avert the implementation of those ongoing energy cuts. That is after the Division of Vitality introduced earlier at this time that it had signed three new agreements with unbiased energy producers underneath Bid Window 5 of the Renewable Vitality Programme (Renewable Vitality Impartial Energy Producer Procurement Programme or REIPPPP).
Additionally it is fairly vital that each one these offers that have been introduced at this time got here from the wind-power sector. So now we have Tshifhiwa Bernard Magoro, the pinnacle of the IPP Workplace on the Division of Vitality with us, in addition to Niveshen Govender, CEO of the South African Wind Vitality Affiliation. To each of you, good night, and thanks a lot for becoming a member of us this night.
Tshifhiwa, let me begin off with you. How a lot energy are we speaking right here, cumulatively, within the offers that you simply signed at this time?
TSHIFHIWA BERNARD MAGORO: Good night Fifi, and good night to your listeners, and good night to my pal. Right now we signed three tasks. Every of the tasks is 140 megawatts. So in whole we signed [for] 420 megawatts from these three tasks.
FIFI PETERS: I believe it’s a fairly vital innovation that these tasks, all of them, got here from the wind-power sector. Is that this actually excellent news to your affiliation?
NIVESHEN GOVENDER: Good night, Fifi, and thanks for having me ….. These are the primary new wind tasks being signed. 4 tasks have been signed in 2018. So in a time the place the nation is overwhelmed with load shedding the information has given us some hope that the much-needed new technology capability could be anticipated within the close to future.
FIFI PETERS: Niveshen, actually excited, hoping that that is the beginning of extra offers to return. What are you able to inform us about that?
TSHIFHIWA BERNARD MAGORO: That is certainly the beginning. You in all probability heard this morning that we signed three of the 25, so there are 22 extra tasks that we expect to signal within the coming month. And that can add a complete of one other 2 200 megawatts. So we’re trying ahead to that, and that positively will make a distinction.
FIFI PETERS: Right here’s my query. I’m simply trying on the timing of accelerating the pace on the signing of those offers and I’m questioning – and maybe that is an unfair query and also you’re inside your rights to inform me so – why does it take a disaster? Why does it take Stage 6 [load shedding] ? Why does it take Stage 5 for the division to hastily be ready to speedily signal these offers? I imply, you’re speaking about signing the remainder of the 22 this month. Why wasn’t it finished earlier than? I imply, Bid Window 5 has been on the desk for fairly a while.
TSHIFHIWA BERNARD MAGORO: Sure, Fifi. I believe I need to clarify that the method to acquire does take time, so it’s not like we’re responding to the present emergency. That is the conventional course of to try to construct capability for the longer term. We began this course of about two years in the past. Bid Window 5 RFT [Request for Tender], you’ll recall, went to the market in April, 2021, after which we appointed the popular bidders in October final 12 months.
It does take time to place collectively a deal of this magnitude, sadly. These three tasks alone are R11 billion value of funding.
So to mobilise that type of funding and to arrange the tasks, the groundwork that must be finished, all of the environmental authorisations, the water-use licences, connection agreements – all of that takes time.
That is positively not going to deal with the present disaster that now we have. It’s planning for the longer term, resulting in 2020 IRP [Integrated Resource Plan] that we’ll put collectively for the following 20 years.
FIFI PETERS: Niveshen, simply your expertise of the procurement course of, and simply the method to indicate up and to have one’s venture accepted by the division, based mostly on the expertise of your members – have these been normal protocol procedures that you simply face elsewhere on the earth, or has there been a level of cumbersomeness to the method whereby issues might have been finished at a quicker tempo if there wasn’t that stage of cumbersomeness within the course of?
NIVESHEN GOVENDER: Completely, Fifi. I believe with the procurement course of… South Africa has led the world, has led the trade globally by way of this procurement course of. So it’s properly famend. It is without doubt one of the quickest procurement processes, I consider, throughout the globe.
I believe what we might do higher in South Africa is [with] the laws, the pink tape round allowing, round registrations, the licences and all the agreements which are required as Bernard has defined. If we might streamline these processes, we might get this up and working quite a bit faster.
However from an trade level we really recognize the work that has been finished by the DMR’s IPP Workplace and Eskom to realize this milestone at this time. It’s a real testomony displaying how authorities and trade can work collectively….
FIFI PETERS: I hope you’re not being additional form there since you wish to keep within the good books of the division.
NIVESHEN GOVENDER: By no means.
FIFI PETERS: Tshifhiwa, simply in the principle, you will have mentioned that, [with] this actually huge milestone, the signing of those three tasks, you guys are working in all probability night time and day to make sure that the remaining 22 additionally get signed as quickly as [possible]. Does that imply that Bid Window 5 goes properly?
TSHIFHIWA BERNARD MAGORO: Thus far it’s going properly, however we do know that there are tasks which have raised considerations across the international financial challenges that they’ve confronted. However, so far as we’re involved, most of those tasks are positively coming to [be signed] subsequent month and we’re all prepared for that and we’re trying ahead to it. However sure, there are challenges however we hope to signal as many as we will.
FIFI PETERS: Okay. So ‘most’ isn’t all?
TSHIFHIWA BERNARD MAGORO: Not all. However I need to say that thus far nobody has indicated that they’re not signing. We’re listening to within the media that there are challenges with a number of the tasks that will not have the ability to keep the tariff that they bid. However, to be sincere, now we have not obtained any venture saying they’re not capable of signal.
FIFI PETERS: Earlier this week, really on the Market Replace, we had unbiased power professional Chris Yelland telling us that he was apprehensive that Bid Window 5 might not attain monetary shut, for the very purpose that you simply’ve cited – that some tasks have encountered value points on account of the Ukraine warfare and the impression that that’s had on inflation, and the way the preliminary bidding prices are materially totally different from the true prices being confronted at this time. Was there any fact in his statements?
Learn/hear: Eskom disaster continues
TSHIFHIWA BERNARD MAGORO: It’s troublesome for me to say that. Sure, that is what we’re studying within the media, however to be sincere none of the popular bidders have come to us to say that is the scenario, and whether or not they’re prepared or to not proceed with the progress, now we have not heard that indication at this time limit. However sure, we do hear about this. And there may be proof that issues have modified; the costs of the parts have modified since we closed the programme final 12 months.
FIFI PETERS: Niveshen, are you able to share the expertise possibly of your members? Has the Ukraine warfare impacted costing, preliminary value estimates and predictions? Have they modified materially from when Bid Window 5 was began – I consider in 2021 or one thing it got here to an in depth – to now?
NIVESHEN GOVENDER: Completely, Fifi. I believe quite a bit has been finished, much more must be finished. And it will be sure that tasks comply with go well with by way of signing this industrial settlement. I believe the events concerned within the settlement are absolutely conscious of the challenges and considerations surrounding the venture, and have dedicated to working to realize success. So I believe we should always depart them to proceed with their efforts. I believe at this level we went to applaud the popular bidders which have signed, …. the worldwide financial circumstances, the geopolitical results that we’re speaking about, and so they have nonetheless managed to succeed in this stage. We simply hope that others will comply with.
FIFI PETERS: I’m attempting to grasp the true danger then for the others. Does it doubtlessly imply that, ought to they comply with via, they could comply with via with the next costing construction that can finally imply the next value of power for the top client?
NIVESHEN GOVENDER: Sadly I received’t have the ability to reply. It’s a really industrial query that solely the events concerned can [answer].
FIFI PETERS: So your members should not expressing the small print, the trivia of the extent that worth will increase are affecting their merchandise proper now to you. These are confidential conversations.
NIVESHEN GOVENDER: Completely.
FIFI PETERS: Tshifhiwa, simply the ultimate phrase. In the principle, this energy that we’re speaking about, I do know you mentioned these are long-term options, we shouldn’t count on this energy we’re speaking about to unravel the power disaster at this time – however how lengthy ought to we wait? How lengthy ought to we watch for this energy, these energy offers that you simply’re signing, to return onto the grid and to ultimately alleviate the ache that we’re struggling proper now on account of load shedding?
TSHIFHIWA BERNARD MAGORO: The instant resolution – and I believe this has been talked about a number of instances – they want an answer to the present load shedding and fixing Eskom. We’re sitting with over 20 gigawatts of capability that isn’t coming forth from Eskom due to breakdowns. So there’s a variety of effort from The Presidency addressing that along with Eskom. So that’s for instant reduction.
However the capability that we’re procuring, what we signed up at this time – sadly this a big infrastructure venture – they do take time to return to fruition. Development for wind amenities like we signed for at this time takes about 24 months. So by finish of 2024, that’s after we expect this energy to be on line.
I need to additionally point out that now we have elevated the earlier Bid Window 6, which we launched in the previous couple of months. That’s additionally going to offer us one other 4 200 [megawatts].
We’re expediting the procurement course of in order that we will get as a lot capability as attainable for the longer term. Nevertheless it’s not going to deal with the instant problem that now we have.
FIFI PETERS: All proper. Whew. Thanks a lot for the dose of actuality, however we actually do hope that the longer term we’re taking a look at is quite a bit brighter with extra mild, and extra secure lighting on account of the actions which were taken at this time. Because of Tshifhiwa Bernard Magoro, the pinnacle of the IPP Workplace on the Division of Vitality, in addition to Niveshen Govender CEO of the SA Wind Vitality Affiliation.