The City has made some steps in its aim to procure power, and its goal to sign power purchase agreements (PPAs) by the first quarter of 2025.
The municipality is currently in the evaluation stages of two independent power producer (IPP) procurement programmes.
The City’s generation development manager, Shane Prins, shared these developments on Thursday during a panel discussion on “Risks and barriers in renewable energy development in Africa through Independent Power Production”.
This was part of the IPP and PPA conference on the fringe of the African Energy Indaba.
More than 4 000 people and 156 speakers participated in this year’s conference sessions and side events held at the Cape Town International Convention Centre.
“The first IPP (programme was) launched in February 2022 for embedded power generation and there we are specifically looking at renewable energy power plants. We will be concluding that evolution before the end of this month and hopefully have preferred bidder status before the end of April.
“The second programme was launched in April 2023 for dispatchable power. This is more of fossil fuel plants, gas to power, for example, or solar PV paired with battery storage.
“That tender closed in December last year and we have now evaluated tenders for bids and we are expecting to conclude this process also by next month, hoping to award preferred bidders status before the end of June this year.
“Then we would be able to go into negotiations and probably sign the PPAs by the first quarter of 2025,” said Prins.
He highlighted that for this goal to become a reality, paramount approvals were needed. This included internal governance process, IPP and lenders.
Questioned about barriers as they started the journey in 2020, Prins said: “We have found issues in the procurement process due to the way municipalities are not set up for that.
The time it also takes to go through the procurement process due to the levels of controls.
“One of the first obstacles was the required capacity in house, including to see how we interact with lenders.
Last year we got a strong transactional adviser to assist with documentations and tender,” he said.
Xolile Maphanga from Ezulwini Municipality in eSwatini said listening to Prins gave them the assurance that they were heading in the right direction in their thought process of looking into the market.
“The City rightfully mentioned the reason for it to be highly legislated.
It’s for us to be transparent in our processes and to be more accountable in our financial reporting, so that we are more credible.
“I also do agree with him that there needs to be a lot of buy-in from the councillors at the top and the need for capacity internally to understand what it is that you are trying to achieve.
“These are public funds, so we ought to be careful how we invest them. We are on the right path in terms of envisioning it and we understand that there is a lot of groundwork involved,” said Maphanga.
Cape Times