Western Cape Government commits to resolving the country’s electricity crisis

23 Aug 2022

Joint media release Cabinet Meets Business: A focus on Energy

To once again demonstrate that the Western Cape Government (WCG) is solidly committed to resolving the country’s electricity crisis, we called a Cabinet Meets Business gathering with the sole purpose of focusing on energy.

It comes at a critical time as we all must double down with our combined efforts to end load shedding once and for all and bring stability to power production to grow the economy. To achieve this, we need to build strong partnerships; and that is where business leaders and role players in the energy sector are crucial. “The Provincial Government cannot do this alone. Eskom too cannot by itself address this challenge,” said Western Cape Premier Alan Winde.

The Western Cape has a well-established business environment, complete with the required skills ecosystem and the steadfast intent to address energy production challenges, not just for the province but the entire country. Through strong public-private partnerships, large-scale energy generation is possible to build our energy resilience.

This gathering was an opportunity for the Western Cape Provincial Cabinet to meet face-to-face with various stakeholders, to further cement collaboration and create more partnerships.

When load shedding escalated several weeks ago, the WCG, under the stewardship of Finance and Economic Opportunities Minister Mireille Wenger, held an energy summit and invited a wide array of experts, including Eskom, to further map our way out of the darkness. Bold solutions were put on the table. Various proposals from bringing more Independent Power Producers into the fold to looking at other exciting interventions like green hydrogen were robustly and thoroughly discussed. Today’s gathering adds even more voices to the ongoing discussion around fixing our power system.

Innovation is one of the WCG’s core values. The Premier said: “We already have a fertile innovation culture in our Government and province. We must use occasions such as this to build on this.”

The Premier added: “It is the responsibility of not just those who attended Cabinet Meets Business to come up with solutions, but every single citizen should also do what they can to help, even if it means contributing through the reduction of energy usage.”

He added this crisis requires a whole-of-society approach as it impacts the economy and all our lives.

Eskom Group Executive Andre de Ruyter agreed. He was candid in his presentation in saying: “It will not be an easy journey to end load shedding. It is not easy to solve due to decisions made in the past,” but he added: “In the crisis we currently find ourselves in lie the seeds of opportunity.”

Taking questions from attendees, some of whom enquired about the move to renewable energy, de Ruyter assured the gathering: “Energy transition is inevitable, but it must be a just transition.” He added: “Eskom is investing in reskilling the utility’s employees working in the coal management chain with accredited training to find meaningful jobs beyond coal.”

He offered another message of hope: “From this crisis, we can create massive opportunities. Imagine the jobs we can save and create if we invest in solving the crisis now?” he asked.

Minister Wenger said: “Cabinet Meets Business is borne out of a belief in the power of partnerships. Therefore, we brought together local and provincial government, the private sector and Eskom to share our plans to address this urgent issue, which is a major impediment to our country’s success.”

Cape Town Mayor Geordin Hill-Lewis said: “This year is already the worst year of load shedding on record, and we are only eight months in. The constant threat of more blackouts hangs over the heads of all South Africans. I am grateful here in Cape Town we are often able to spare residents and businesses up to two levels of load shedding.” He added: “Putting an end to our economic malaise requires urgent action on energy and the City has embarked on an ambitious plan to end load shedding over time by making Cape Town less reliant on Eskom.

“I am encouraged that we as the City of Cape Town have capable partners in the Provincial Government and other Western Cape municipalities who not only share our vision of an energy secure future for the province but who are also committed to working within their own spheres of competence to ensure the key ingredients for energy security are put in place as soon as possible.”

“It must be emphasised,” the Premier stressed, “We stand with Eskom in solving this crisis. Under the Group Chief Executive and his team, I believe the power utility is doing everything it can to resolve the country’s energy woes, and as the WCG and City, we will help wherever we can.

“There is always opportunity in crisis, and the call was put out today for businesses to invest in innovative energy generation solutions, and to look at innovation as a whole in this space – and to do so with haste. Energy generation has become an economic opportunity that businesses should look to embrace.”

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Wind energy association unpacks complexities of procurement process

Responding to the announcements made last month delaying two renewable energy procurement rounds, meant to unlock and deliver new generation capacity for the country, the South African Wind Energy Association’s (SAWEA) provides insights.

June 2022

The sector in general, view the interrupted procurement as unfortunate, citing that this delays the achievement of investment, job creation and security of electricity supply that South Africa desperately needs. However, Chair of the Working Group, Kai Howie, notes that considering the complexity of the market and scale of the procurement process, it is understandable.

“We understand that these projects are complex and that given the chaos on the global manufacturing and logistics markets, as well as inevitable process delays, it is not entirely surprising that there has been a postponement to signing the agreements with the state utility and government departments, and achieving financial close where funds can be drawn down to fund the construction of these renewable energy projects,” says Howie.

BW5 preferred bidders are now expected to reach financial close by the end of next month, or late September 2022, pushed out from end-April, which was just six months after the bidders announcement in October last year. Whilst it isn’t certain which of the preferred bidders are earmarked for commercial close and financial close for the two allocated deadlines, as the discussions between the preferred bidders and Eskom are generally confidential, Howie explains that the original timeframe was actually very tight. He also explained the complexity around setting an ideal timeframe, considering the policies and pricing requirements.

“The ideal timeframe for these projects to reach financial close needs to be short enough so that pricing from suppliers and contractors can be as close as possible to the pricing that was bid on, and long enough so that all permits, consents, and the Eskom budget quote can be obtained as well as for all agreements to be negotiated and finalised,” explains Howie.

While six to twelve months may be an ideal timeframe, this is still challenging for preferred bidders considering the current international market conditions, which means that pricing cannot be locked in for significant periods. On the other hand, regulatory processes, for example, the water-use licence process, take months to complete, even with the assistance of the Presidency’s office.

Further addressing the policy and regulatory environment, Howie and his industry colleagues are looking at how processes can be adjusted to ease the pressure on IPPs.

“Firstly, the capacity of various government departments needs to be improved to ensure that requests for permits and consents can be processed as quickly as possible. Secondly, given the uncertainty and instability in the global manufacturing and logistics markets, placing full pricing risk on bidders is not conducive to projects reaching financial close. Finally, relooking at the risk allocation to ensure that there are not onerous terms which need to be passed down to suppliers and contractors could go a long way in ensuring that the projects reach financial close in a shorter period of time as this would simplify the negotiations significantly,” reports the SAWEA Policy and Markets Working Group.

The Group report that the cumbersome policy relating to commercial closure range across a number of departments, which are battling to issue permits and consents timeously. The sector has noted that the Department of Water and Sanitation has certain capacity challenges, which are being addressed to improve turnaround times.

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SAPVIA | Mantashe announcement on IPP bidders

Solar PV industry body SAPVIA (the SA Photovoltaic Industry Association) has applauded the step-change towards reviving generation capacity procurement from the Department of Mineral Resources and Energy and supports the commitment to deliver a secure energy supply from a diverse range of energy sources as set out in the country’s energy plan.

“We are delighted to see solar PV represented in the RMIPPP preferred bidders announcement and congratulate those members who have worked tirelessly to a successful end. With technological advancement, the reduced costs, the scalability and rapid build times of solar PV projects, solar PV should remain a key technology choice in meeting the country’s capacity requirements,” said Niveshen Govender, SAPVIA COO.

“The emergency procurement round showed that crises can spur innovation and action. While there is still room to better research and understand some of the technology choices of RMIPPPP, we welcome the Minister’s immediate follow-up confirmation of the release of the Renewable Energy IPP Procurement Programme Bid Window 5.

“New possibilities will be realised with both PV and PV-hybrid projects playing a role in South Africa’s energy mix. With the commitment to procure 2000 megawatts from PV solar across Bid Window 5 and 6 this year, there is much to look forward to.”

SAPVIA welcomes and strongly supports the changes announced to the Economic Development requirements of Bid Window 5, which will ensure the participation of black women in the ownership of future projects and procurement rounds as well as a more concerted focus on skills development in the energy sector.

“Over the past decade, SAPVIA has taken the lead in driving skills development across the solar PV value chain. Our focus has been on enhancing the skills of our members to create a world-leading sector that delivers socio-economic transformation and upliftment across South Africa.

“Recently, through our Developing Developers program, in partnership with SAWEA, we are working with current and potential developers to give them access to the knowledge and skills needed to take a renewable energy project from initial planning through to commissioning. This grassroots capacity development is well aligned with the department’s move to increase requirements for black women participation.”

“Local manufacturing and content must continue to be prioritised in all future procurement rounds and SAPVIA will work with members to develop local PV value chains so that our members are ready to meet the new requirements of local content in the forthcoming Requests for Proposals.”

The embedded and distributed generation sector is increasingly important both in diversifying our energy mix and contributing to energy security. SAPVIA is encouraged by the DMRE’s moves to enable increased embedded generation and is therefore seeking clarity on the statement on increasing the distributed generation licence exemption cap, and we will continue to engage with our counterparts in government to clarify the details and legislation required for self-generation as well as the licensing and registration regime for embedded generation.

Niveshen Govender

“The Minister has responded to the calls of industry to act quickly and restart renewable generation capacity and we look forward to solar PV playing a role in delivering energy security and powering South Africa’s economic recovery.” Niveshen Govender

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IPP & PPA Conference at African Energy Indaba | Do not miss the panel at 11:30 on innovative tariff systems


  • How can innovation in market design and use of new technologies serve to balance the price that African consumers can afford with the revenue and returns needed to satisfy the shareholders of energy supply businesses?
  • Can Africa move to cost-reflective tariffs or are subsidies still necessary and, if so, how can they be managed?

MODERATOR:       Wendy Green: DRA Global


Adero Okudo: Milele Energy

Edirin Aghoghovbia: AMMP

Joshua Ogwal: Ligomarc Associates

Zahid Ahmed Hassen: ARCH Emerging Markets

Please find the rest of the programme for the 4 and 5 March here: https://greeneconomy.media/wp-content/uploads/2021/03/IPP-PPA-Draft-Programme-v4-002.pdf

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Evolution II Fund partners with Building Energy’s management in the buy-out of its African business

Building Energy’s management, in partnership with Inspired Evolution’s Evolution II Fund, has successfully closed a buy-out of Building Energy’s Africa and Middle East business to launch the newly branded Red Rocket. 

The new joint venture will see the re-capitalisation and positioning of Red Rocket to become one of Africa’s leading emerging renewable energy independent power producers (IPPs). Evolution II holds a majority shareholding in the reconfigured IPP platform, It is advised by Inspired Evolution, an Africa-focused investment advisory firm that specializes in clean energy infrastructure and resource efficiency investments.

The ground-breaking partnership brings together two seasoned professional teams with deep sector experience and proven renewable energy project development and auction conversion success to ramp up Red Rocket’s activities across Africa. The buy-out deal leverages the resources of multiple Development Finance Institutions (DFIs) and international investors together with local leading South African investment institutions active across Africa. They are secured via Inspired Evolution and Red Rocket’s existing relationships, to strengthen and forge stronger partnerships for its African expansion.

Red Rocket’s management skills set offers unique agility and differentiated bid strategies with best-in-class demonstrated renewable energy bid success and subsequent implementation of the projects.

The team combines proven renewable energy technology selection with technical project development optimisation and innovation to offer full integration through its IPP platform solutions. The hands-on active value creation from Inspired Evolution complements Red Rocket’s capabilities to deliver on its African IPP expansion plans.

Red Rocket is an integrated renewable energy IPP that develops, designs, constructs operate and owns utility-scale grid-connected renewable energy projects (wind, solar, hydro, and biomass). It also has operations in multiple countries across Africa. Founded in 2012 and headquartered in Cape Town, the company now known as Red Rocket was originally set up as Africa and the Middle East business unit of Building Energy’s global operations.

Its portfolio comprises 377 MW of projects in operation, under construction, and awarded under public and private bids.

The Group is also developing a portfolio in excess of 2 GW of additional best-in-class wind, solar, hydro and biomass projects to bid under future rounds of South Africa’s renewable energy independent power producer procurement program (REIPPPP). This also includes other procurement programs across various African countries.

Matteo Brambilla, Chief Executive Officer of the Red Rocket Group, said: “We are pleased to be partnering with Inspired Evolution. They bring sector expertise and proven project finance return performance to augment our efforts in building Red Rocket into one of Africa’s premier long-hold utility-scale IPP platforms offering the least-cost clean and reliable energy to African customers. Our auction successes under the REIPPPP in South Africa and in select countries across Africa are a testament to the innovation we continually apply to our renewable energy public and private bid strategies.”

Christopher Clarke, Managing Partner at Inspired Evolution, said: “Backing a commercially-astute professional team with demonstrated bid success to accelerate the deployment of utility-scale clean energy infrastructure in targeted countries across Africa, contributes to our mission. We share the vision with management for Red Rocket to continue to improve its competitiveness with agility and innovation to become a credible high-impact IPP platform of choice.”

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