CEO Voice May 2021

CEO Voice May 2021

Dear Members,

I trust you’re well and staying safe as we see that CV-19 numbers are starting to rise again.

It’s been encouraging to see reassuring statements from government regarding future procurement plans. Earlier this month, in his Budget Vote speech, Minister Mantashe announced the Department’s procurement plans for the next 8 months, as follows:

  • 2 600 megawatts from renewable energy around August 2021.
  • 513 megawatts from Storage around August 2021.
  • 1 500 megawatts from Coal around December 2021.
  • 3 000 megawatts from Gas around December 2021.
  • 1 600 megawatts from renewable energy around January 2022.

During the recent Bidders Conference, hosted by the IPPO, Mr. Bernard Magoro confirmed that BW5 (which procures 2 600 MW of renewable energy capacity), represented the start of an intensive procurement phase for the coming 12 months, during which four additional programmes would be launched. We can expect the opening of BW6 and BW7, within the next 12 months, which goes a long way in providing visibility, certainty and support for the industry’s economic development efforts.

With so many overlapping procurement programmes, the next couple of years will be a busy period for the industry.  We anticipate that the industry will begin to experience capacity constraints (human resources and skills) therefore, in anticipation thought will be given to ramping-up human resource capacity, to build a good pipeline of skills. We will be working closely with the EW SETA to try and resolve this potential challenge.

Another challenge that I foresee is that the pace of the procurement programme might also create a bottleneck for local content in the initial stages, where the demand for local content might exceed supply and not provide a sufficient period for local manufacturers to ramp up capacity. This is an issue that the Manufacturers and Local Content Working Group will address.

It was also reassuring to hear recent comments from the Deputy Chair of the Presidential Climate Change Coordination Committee, Valli Moosa, boldly stating that replacing the ageing coal power fleet with renewables will spur economic growth while reducing emissions. As I mentioned last month, it’s going to be very important for us as a sector to start highlighting the essential role of wind power on the road to net zero.

The news of Lockdown Level 2 this week, did bring some disappointment as we are full steam planning the Windaba and WindAc conferences, but we do hope that by end of winter the worst will be over. So we are still looking forward to meeting you all at Windaba as we celebrate 10 Years of Wind Power.

Ntombifuthi Ntuli
South African Wind Energy Association

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