FIFI PETERS: More energy may very well be on the playing cards, may very well be coming to the grid actual quickly to attempt to alleviate the ache on Eskom’s grid and to hopefully avert the implementation of those ongoing energy cuts. This is after the Department of Energy introduced earlier as we speak that it had signed three new agreements with impartial energy producers beneath Bid Window 5 of the Renewable Energy Programme.
It can also be fairly important that every one these offers that had been introduced as we speak got here from the wind-power sector. So now we have Tshifhiwa Bernard Magoro, the top of the IPP workplace on the Department of Energy with us, in addition to Niveshen Govender, CEO of the South African Wind Energy Association. 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 just signed as we speak?
TSHIFHIWA BERNARD MAGORO: Good night Fifi, and good night to your listeners, and good night to my pal. Today we signed three projects. Each of the projects is 140 megawatts. So in whole we signed [for] 420 megawatts from these three projects.
FIFI PETERS: I believe it’s a fairly important innovation that these projects, all of them, got here from the wind-power sector. Is this actually excellent news in your affiliation?
NIVESHEN GOVENDER: Good night, Fifi, and thanks for having me. 1:49…… These are the primary new wind projects being signed. Four projects had 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 will be anticipated within the close to future.
FIFI PETERS: Niveshen, actually excited, hoping that that is the beginning of extra offers to come. What are you able to inform us about that?
TSHIFHIWA BERNARD MAGORO: This is certainly the beginning. You in all probability heard this morning that we signed three of the 25, so there are 22 extra projects that we predict to signal within the coming month. And that may add a complete of one other 2 200 megawatts. So we’re wanting ahead to that, and that undoubtedly will make a distinction.
FIFI PETERS: Here’s my query. I’m simply wanting 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? Why does it take Stage 5 for the division to abruptly be able to speedily signal these offers? I imply, you’re speaking about signing the remainder of the 22 this month. Why wasn’t it completed earlier than? I imply, Bid Window 5 has been on the desk for fairly a while.
TSHIFHIWA BERNARD MAGORO: Yes, Fifi. I believe I need to clarify that the method to procure does take time, so it’s not like we’re responding to the present emergency. This is the traditional course of to attempt 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, and hen we appointed the popular bidders in October final yr. It does take time to put collectively a deal of this magnitude, sadly. These three projects alone are R11 billion price of funding. So to mobilise that type of funding and to put together the projects, the groundwork that wants to be completed, all of the environmental authorisations, the water-use licences, connection agreements – all of that takes time.
This is unquestionably not going to deal with the present disaster that now we have. It is planning for the longer term, main to 2020 IRP [Integrated Resource Plan] that we’ll put collectively for the subsequent 20 years.
FIFI PETERS: Niveshen, simply your expertise of the procurement course of, and simply the method to present up and to have one’s challenge permitted by the division, based mostly on the expertise of your members – have these been customary protocol procedures that you just face elsewhere on this planet, or has there been a level of cumbersomeness to the method whereby issues might have been completed at a sooner tempo if there wasn’t that degree of cumbersomeness within the course of?
NIVESHEN GOVENDER: Absolutely, Fifi. I believe with the procurement course of ……5:12 South Africa has led the world, has led the trade globally when it comes to this procurement course of. So it’s nicely famend. It is among the quickest procurement processes, I imagine, throughout the globe. I believe what we might do higher in South Africa is [with] the laws, the purple tape round allowing, round registrations, the licences and the entire agreements which are required as Bernard has defined. If we might streamline these processes, we might get this up and working so much faster.
But from an trade level we really recognize the work that has been completed by the DMR’s IPP Office and Eskom to obtain this milestone as we speak. It’s a real testomony displaying us how authorities and trade can work collectively with ringing the bell ……5:57
FIFI PETERS: I hope you’re not being further sort there since you need to keep within the good books of the division.
NIVESHEN GOVENDER: Not in any respect.
FIFI PETERS: Tshifhiwa, simply in the primary, you have got stated that, [with] this actually huge milestone, the signing of those three projects, you guys are working in all probability evening and day to be sure that the remaining 22 additionally get signed as quickly as [possible]. Does that imply that Bid Window 5 goes nicely?
TSHIFHIWA BERNARD MAGORO: So far it’s going nicely, however we do know that there are projects which have raised issues across the world financial challenges that they’ve confronted. But, so far as we’re involved, most of those projects are undoubtedly coming to [be signed] subsequent month and we’re all prepared for that and we’re wanting ahead to it. But sure, there are challenges however we hope to signal as many as we will.
FIFI PETERS: Okay. So ‘most’ is just not all?
TSHIFHIWA BERNARD MAGORO: Not all. But I need to say that to date nobody has indicated that they’re not signing. We are listening to within the media that there are challenges with a few of the projects that might not be ready to keep the tariff that they bid. But, to be trustworthy, now we have not obtained any challenge saying they’re not ready to signal.
FIFI PETERS: Earlier this week, truly on the Market Update, we had impartial energy skilled Chris Yelland telling us that he was nervous that Bid Window 5 could not attain monetary shut, for the very cause that you just’ve cited – that some projects have encountered price points because of the Ukraine conflict and the impression that that’s had on inflation, and the way the preliminary bidding prices are materially totally different from the actual prices being confronted as we speak. Was there any reality in his statements?
TSHIFHIWA BERNARD MAGORO: It’s troublesome for me to say that. Yes, that is what we’re studying within the media, however to be trustworthy not one of the ……8:12 bidders have come to us to say that is the scenario, and whether or not they’re keen or not to proceed with the progress. We haven’t heard that indication at this cut-off date. But sure, we do hear about this. And there may be proof that issues have modified; the costs of the elements have ……8:30 since we closed the programme final yr.
FIFI PETERS: Niveshen, are you able to share the expertise perhaps of your members? Has the Ukraine conflict impacted costing, preliminary price estimates and predictions? Have they modified materially from when Bid Window 5 was began – I imagine in 2021 or one thing it got here to a detailed – to now?
NIVESHEN GOVENDER: Absolutely, Fifi. I believe so much has been completed, much more wants to be completed. And this may be sure that projects comply with swimsuit when it comes to signing this business settlement. I believe the events concerned within the settlement are totally conscious of the challenges and issues surrounding the challenge, and have dedicated to working to obtain success. So I believe we should always go away them to proceed with their efforts. I believe at this level we went to applaud the popular bidders which have signed, so ……9:29 the worldwide financial situations, the geopolitical results that we’re speaking about, and we nonetheless managed to attain this stage. We simply hope that others will comply with.
FIFI PETERS: I’m attempting to perceive the actual danger then for the others. Does it doubtlessly imply that, ought to they comply with by way of, they might comply with by way of with the next costing construction that may in the end imply the next price of energy for the top client?
NIVESHEN GOVENDER: Unfortunately I gained’t give you the chance to reply. It’s a really business query that solely the events concerned can [answer].
FIFI PETERS: So your members are usually not expressing the small print, the trivialities of the extent that value will increase are affecting their merchandise proper now to you. Those are confidential conversations.
NIVESHEN GOVENDER: Absolutely.
FIFI PETERS: Tshifhiwa, simply the ultimate phrase. In the primary, this energy that we’re speaking about, I do know you stated these are long-term options, we shouldn’t anticipate this energy we’re speaking about to resolve the energy disaster as we speak – however how lengthy ought to we wait? How lengthy ought to we watch for this energy, these energy offers that you just’re signing, to come onto the grid and to ultimately alleviate the ache that we’re struggling proper now because of load shedding?
TSHIFHIWA BERNARD MAGORO: The Immediate resolution – and I believe this has been talked about a number of occasions – they want an answer to the present load shedding and fixing Eskom. We are sitting with over 20 gigawatts of capability that’s not coming forth from Eskom due to breakdowns. So there’s a number of effort from the presidency addressing that collectively with Eskom. So that’s for instant aid.
But the capability that we’re procuring, what we signed up as we speak – sadly this a big infrastructure challenge – they do take time to come to fruition. Construction for wind amenities like we signed for as we speak takes about 24 months. So by finish of 2024, that’s after we predict 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 give us one other 4 200 [megawatts]. We are expediting the procurement course of in order that we will get as a lot capability as doable for the longer term. But 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 so much brighter with extra gentle, and extra secure lighting because of the actions which were taken as we speak. Thanks to Tshifhiwa Bernard Magoro, the top of the IPP Office on the Department of Energy, in addition to Niveshen Govender CEO of the SA Wind Energy Association.