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Wilson Bayly Holmes-Ovcon (WBHO) is back, "and we are back on a very strong footing", says CEO Wolfgang Neff. "We had an exceptional year in a difficult period." The construction group on Wednesday released its results for the financial year ended June 30. Neff said he was "very relieved" that Australia was now firmly in the rear view mirror, with the group exiting the market Down Under following a disastrous roads project. WBHO is now active in the local, rest of Africa and UK markets. The proof of WBHO's return to health could be found in its order book, which was up 43% for the year ended June 30 compared with the previous year, at R32.6-billion. "We believe the group is set well for the short to medium term," said Neff. The order book was boosted by private sector renewable energy projects, projects in the rest of Africa, as well as a surge in roads projects. The pipeline in terms of projects by independent power producers (IPPs) "is huge; it sits at R45-billion", commented Neff. "In my view there will not be enough contractors to do that work". The R45-billion refers to projects WBHO have identified as contracts it is likely to bid on, with work to start in the next 24 months, and specifically under the heading 'energy infrastructure'. The group's total pipeline is valued at R212-billion. More evidence of WBHO's return to steady footing could be found in the fact that it added 2 750 jobs in the year under review. WBHO saw revenue for the year increase by 38% to R24-billion, with operating profit before nontrading items at R1.1-billion, up from R859-million. Around 66% of revenue came from South Africa, 13% from the rest of Africa and 21% from the UK. In terms of operating profit, 70% flowed from South Africa, 20% from the rest of Africa and 10% from the UK. Russell-WBHO acted as a drag on UK profit, with WBHO's total UK business showing a 26% decline in operating profit, to R117-million. All other business units reported a healthy increase in operating profit. Looking ahead, Neff said the UK market was stabilising after a period of high inflation, while WBHO would continue to diversify into new African territories to support regional growth.
New National Treasury director-general Dr Duncan Pieterse reports that recommendations arising from a joint review by the National Treasury and the Presidency regarding the configuration of government and its programmes could be made ahead of the November 1 Medium-Term Budget Policy Statement (MTBPS). Pieterse, who took up the position on September 1 having previously been the deputy director-general for asset and liability management, told editors on Tuesday that work on the "reconfiguration of the State" has been ongoing since President Cyril Ramaphosa initially announced the review in his 2018 State of the Nation Address. While the reconfiguration has been flagged several times thereafter, there have been few visible developments, with new Ministers having been introduced to Cabinet following the most recent reshuffle in March. "That [reconfiguration] work has continued, and the outcomes of that work will be announced either at the time of the MTBPS, at the latest, or even sooner," Pieterse reported, while refusing to be drawn on the details. A recent Sunday Times report indicated that the reconfiguration could result in the cutting of several programmes to sustain the R350 a month social relief of distress grant, amid a weakening revenue collection outlook. The report also stated that it could result in the long-awaited reduction in the size of Cabinet, which is widely regarded as bloated. "What that [review] is really about is about identifying the areas in which the way the State is organised is no longer fit for purpose, and that includes both the structure of the State but also includes the various programmes," Pieterse explained. A failure to reconfigure the State and cut inefficient programmes, he added, would result in either higher taxes or increased borrowings, or both, with media reports indicating at the National Treasury is already considering an increase in the Value Added Tax rate to address part of the shortfall that is arising because of prolonged low growth and exacerbated by loadshedding and the collapse in freight rail services. Pieterse confirmed that there had been an underperformance in revenue collection relative to the forecast provided in the February Budget and also revealed that government's borrowing programme had been ramped up since August to compensate. He is, thus, having to lead a rethink at the National Treasury on what will constitute a credible fiscal framework in the context of lower-than-forecast revenue, increased borrowings and continued low growth. "We started heading in the direction [of a credible fiscal framework], I would say, over the last two or so years, and then of course this year we've had an underperformance in our revenue collection, which has meant that we have to think very differently now about what a credible fiscal framework looks like." Besides the traditional tools of adjusting debt, taxes and spending, Pieterse said the National Treasury was also looking at other measures to strengthen the fiscal framework over the medium term. He did not provide details, but these are likely to focus primarily on growth-enhancing reforms, such as those envisaged for the electricity and freight logistics sectors, which are aimed at facilitating an injection of private investment and skills. VGBE REPORT ON ESKOM COMPLETE In the electricity sector, where Eskom is being supported by a R254-billion debt relief package, Pieterse expressed optimism that a VgBE-led review of the utility's coal fleet will make concrete recommendations on how to improve skills, maintenance and procurement outcomes. The report would be shared with Finance Minister Enoch Godongwana this week and the National Treasury would then decide on how best to communicate the findings within and outside of government and Eskom. While the scope of the study did not initially include the prospect of prolonging the life of certain coal stations, Pieterse indicated that it would make high-level inputs in this regard. "...
Bell Equipment is set to launch a new business, called Bell Heavy Industries (BHI), at the Mining Indaba in February next year. BHI will be an arm of Bell Equipment Company South Africa, which is 51% black-owned, says Bell Equipment CEO Leon Goosen. Bell is a global manufacturer, distributor and exporter of a range of heavy equipment for the construction, mining, quarrying, sugar and forestry industries. BHI will operate from Bell's plant in Richards Bay, KwaZulu-Natal, which is currently seeing a shift in articulated dump truck (ADT) production to Germany, in an effort to shorten the logistics chain to the group's main suppliers, as well as its main markets, such as North America. "The critical need for simple logistics routes has been clearly demonstrated over the last few years," says Goosen. He adds that new and existing products less affected by supply-chain challenges will continue to be manufactured in the South African plant. These include products such as those envisioned by BHI. "We want to leverage what we have, and the plant in Richards Bay is a great asset. We see the formation of BHI as an enormous opportunity to grow." Goosen believes that Bell Equipment's normal work could utilise the plant for one or two shifts, while a third shift could use the same equipment (such as plasma cutters) to make products such as railway bogies or excavator buckets. Many excavators typically arrive in South Africa without buckets, while there is also a "huge replacement cycle", says Goosen. "As a country we desperately need industrialisation and this is one opportunity to work towards this goal." Bell on Tuesday recorded a 42% increase in revenue for the six months ended June 30, to R6-billion, compared with the same period last year. Operating profit was up 74%, at R536-million. Goosen says strong demand in most markets resulted in the group "performing well". "We are particularly pleased about the sales growth during the period in the North American market." Goosen notes, however, that the high global inflation and input cost increases witnessed last year continued to impact the group's margins. "In addition, the rand weakened sharply against major currencies between December, 2022 year-end, and the end of June, 2023. "Although a weaker rand is generally favourable for the group over the long term, it is challenging to respond to significant, sudden rand depreciation over a short period." Goosen adds that operating conditions have also been challenging, with ongoing supply chain issues and staff shortages at the Bell plant in Germany. This constrained growth, as well as Bell's ability to fully capitalise on market demand. While direct sales from South Africa benefitted from strong commodity demand in the six months under review, the construction and road-building sectors remained weak. Goosen says Bell's new motor grader will be launched in late 2024. Outlook Although global markets and the group's order book are currently strong, the group says it is sensitive to the increasing possibility of markets softening. Europe could see some reduction in demand for ADTs with the Russia-Ukraine conflict potentially moving country-specific post-Covid-19 stimulus packages from infrastructure spending to building military assets. Bell has mothballed its operations in Russia, and is unable to repatriate R72-million in cash stuck in the country. Goosen also notes that the completion dates for some larger infrastructure projects in Europe have been moved out, resulting in a reduced demand for earthmoving equipment. He says loadshedding, limited availability of vessel space for finished ADT products, partially owing to a rapid increase in vehicle exports from China, and the funding required for the long working capital cycle to import components and material from the northern hemisphere, continue to challenge the South African manufacturing operation. Goosen is set to depart Bell at the end of the year. The search for his successor is under ...
Special Investigating Unit (SIU) head Advocate Andy Mothibi says the fact that former Eskom CEO André de Ruyter did not receive board authorisation to commission a private intelligence investigation into criminality and sabotage at the State-owned utility raises potentially grave governance issues. Nevertheless, he stresses that the report's content "cannot be ignored" and is proving useful in guiding several ongoing investigations. In a presentation to the Standing Committee on Public Accounts (Scopa), Mothibi confirmed that George Fivaz Forensics and Risk (GFFR) had been appointed by Business Leadership South Africa (BLSA) to conduct the probe in a contract facilitated by De Ruyter, who "was acting on his own". The private investigation reportedly cost R50-million and was funded by BLSA together with as yet unnamed private funders, with the BLSA's portion valued at R17.1-million before value added tax. Mothibi said that, while De Ruyter might have been acting with good intentions, undertaking a private investigation into a State institution without the necessary authority points to possible "maladministration". "Consideration should be given to holding the former GCEO to account," he told lawmakers, while suggesting that BLSA ought to have known that it could not conduct an investigation at a State institution without the necessary authority. BLSA CEO Busi Mavuso, who was said to have been cooperating with the SIU enquiries, has previously defended the decision to part-fund the investigation on the basis of businesses' desire to support the combating of crime and corruption at Eskom, which was posing a major risk to ongoing business operations and investment. BLSA also insisted that it had no role in the appointment of GFFR, nor in vetting the lead investigator Tony Oosthuizen, who has been identified in media reports as having been an apartheid military intelligence operative. However, the SIU obtained a copy of the contract between GFFR and BLSA which was concluded on January 28, 2022, and reported that a close-out report was issued to BLSA in August 2023. No specific recommendation was immediately provided regarding what action should be taken against either De Ruyter or BLSA, with Mothibi indicating that it planned to make such a recommendation only once various further enquires had been completed. For instance, De Ruyter's employment contract still required analysis to assess whether it empowered him to undertake such an investigation without the approval of the board and the knowledge of law enforcement authorities. A scenario described as highly unlikely in light of the legislative and regulatory framework surrounding the initiation of such actions. De Ruyter left Eskom in February after an explosive television interview in which he revealed that he had been poisoned and implicated senior politicians in widespread crime, corruption and sabotage at the utility; information which appeared to be drawn directly from the GFFR report. Mothibi denied that pursuing De Ruyter amounted to the "proverbial shooting of the messenger", insisting that the GFFR investigation could set a "concerning precedent" for governance and law enforcement if not addressed. That said, he also insisted that the SIU and the law-enforcement agencies, which had since had sight of the GFFR document, were not discounting the substance of the report and were actively pursuing several leads. As with De Ruyter, neither Mothibi nor Lieutenant General Godfrey Lebeya of the Hawks, who also made a presentation to Scopa, would be drawn on the names of the senior politicians identified in the report as having links to coal cartels in Mpumalanga. Both confirmed that the GFFR contained names, but Mothibi said he could not reveal the identity without further evidence, while Lebeya said the Hawks only named implicated individuals when they were charged. USEFULNESS OF REPORT CONFIRMED Despite the unauthorised nature of the report, its "usefulness" was confirmed, ...
Engineering News editor Terence Creamer discusses Mineral Resources and Energy Minister Gwede Mantashe's plan to take an updated Integrated Resource Plan through Cabinet processes soon and the latest update from the Department of Public Enterprises on Eskom's restructuring.
New Transnet chairperson Andile Sangqu has indicated that the troubled State-owned freight logistics group, which has hitherto prided itself on being financially self-sufficient, may require an equity injection to implement a turnaround strategy that is currently under development. The group reported a net loss of R5.7-billion for the 2022/23 financial year on the back of a fall in rail and port volumes and a rise in finance costs to R12-billion from R10.5-billion and an increase in borrowings to R130-billion. In the previous financial year, Transnet reported a R5-billion profit, largely as a result of a R10-billion fair value adjustment, most of which related to its property portfolio. Speaking at the group's results presentation, Sangqu said the immediate focus was on a 'back to basics' recovery of the group's operational performance, which continued to decline in the period under review. However, he indicated that the yet-to-be-finalised turnaround plan would include financial restructuring to address the group's high level of debt, which was translating into monthly repayments of R1-billion, and could require an equity injection. Sangqu did not provide any estimate for such an injection and described the financial restructuring component as being at an early stage. Nevertheless, he indicated that the group might need to approach the National Treasury, through Transnet's shareholder Minister Pravin Gordhan, to assess the prospects of financial support to assist the turnaround. Gordhan, who also participated in the results presentation, responded immediately by underlining government's current fiscal constraints. The Public Enterprises Minister indicated that the fiscal position could deteriorate further as a result of persistently low growth and a revenue-collection outlook that had been weakened by a decline in commodity prices and the fall in commodity exports as a result of Transnet's underperformance. Transnet's financial position should be improved, he argued, primarily through an operational turnaround, as well as cost cutting and a "crowding in" of private finance through partnerships rather than privatisation. Gordhan called for urgent and corrective action, particularly within Transnet Freight Rail (TFR), which recorded a 13.6% fall in volumes to 149.5-million tons from an already low 173.1-million tons in the previous year. In 2017/18, rail volumes were above 220-million tons. TFR's export coal volumes fell to 49.7-million tons (58.3-million tons), iron-ore to 51.1-million tons (54.6-million tons) and general freight to only 49.7-million tons (60.2-million tons), which translated to a revenue decline at the unit of 7.9% to R34.8-billlion and a 40.5% slump in earnings before interest, taxes, depreciation, and amortisation to R6.7-billion. CEO Portia Derby described the year as having been "harrowing" and attributed TFR's poor performance to a 25% reduction in available locomotives relative to the position five years ago, as well as ongoing cable theft. LOCOMOTIVES OUT OF SERVICE The decline in locomotive availability was an even more acute 32% on the export coal corridor, owing to an ongoing dispute with CRRC of China whose locomotives operate on the corridor. Derby reported that there were 315 locomotives out of service at the end of March and that the figure had increase to 377 since then, resulting in an available fleet of only about 1 400 locomotives. She reported that plans had been concluded with most of the original-equipment manufacturers to begin returning the locomotives to service, and expressed optimism that progress would also be made with CRRC, despite its ongoing disputes with both the South African Revenue Service (SARS) and the South African Reserve Bank (SARB). Gordhan, who travelled to China in May in an effort to negotiate a breakthrough, said "constructive discussions" with CRRC to secure the spares required to return idle locomotive to service, as well as to ensure the delivery of a further...
Telecommunications giant Vodacom and South African State-owned power utility Eskom on Wednesday signed a first-of-its-kind virtual wheeling agreement that moves the JSE-listed firm closer to its goal of sourcing 100% of its electricity demand from renewable energy sources by 2025 while adding capacity to the strained national grid. The agreement, co-developed by the parties to help accelerate efforts to solve the country's energy crisis, enables Vodacom to secure independent power producers (IPPs) under the same terms and conditions which underpin its agreement with Eskom. "Our virtual wheeling solution will enable South Africa's private sector to participate in resolving the energy crisis which continues to impact the country's economy," says Vodacom Group CEO Shameel Joosub. The unique agreement followed the conclusion of a successful pilot phase and rigorous testing last year. The newly co-developed virtual wheeling solution is now accessible to the public and private sector on a larger scale, providing a blueprint for other participants, with the potential to be fast-tracked, depending on the available licensed capacity of IPPs. "With the agreement now signed, Vodacom will be able to add more capacity to the grid without impacting Eskom's balance sheet, while helping to reduce its greenhouse gas emissions," Joosub comments. Vodacom South Africa's unique operating situation and the complexities associated with having over 15 000 distributed low-voltage sites across South Africa linked to 168 municipalities previously prevented the company from accessing large scale renewable energy from IPPs. "Traditional wheeling typically involves a one-to-one relationship between an IPP and a buyer using the national grid to convey their energy. While the concept of traditional wheeling is fairly common practice globally, it has certain limitations for companies with complex operating environments. "Converting our existing fossil-fuel based electricity supplies directly with on-site renewables is limited by technical constraints that are difficult to scale. We explored a traditional wheeling option, but this had numerous limitations, which we believed could be overcome by reimagining the problem and using technology to solve the issue," he explains, highlighting that the virtual wheeling solution addresses these challenges. Vodacom South Africa has spent more than R4-billion on backup power solutions, and R300-million in the past financial year alone, on operational costs such as diesel for generators, a significant financial burden. Vodacom approached Eskom with the ambitions to remove complexity; to use technology to solve legacy limitations; to access renewable energy with a sound business case; and encouraging private participation to help solve the energy crisis. "Think of it like purchasing renewable energy certificates," adds Vodacom South Africa CEO Sitho Mdlalose. "Most importantly, it also has the added benefit of positively impacting the supply deficit currently being experienced and nurturing the growth of renewable energy production in South Africa. He estimates that the initial phase will move about 30% of Vodacom South Africa's power demand onto renewable sources, with Vodacom exploring and developing additional solutions to make up the difference. "The future of virtual wheeling is looking bright, with a number of parties from across industries already showing commercial interest in the solution enabled by Vodacom subsidiary Mezzanine."
The Department of Public Enterprises (DPE) has confirmed that transitional arrangements are being put in place to ensure that the National Transmission Company of South Africa (NTCSA) will be able to play the role of a transmission system and market operator ahead of legislative changes catering for that role. NTCSA is currently being established as a wholly owned subsidiary of Eskom Holdings, and acting DPE director-general Jacky Molisane told lawmakers in a briefing that the appointment of an independent board for the entity was under way, with a list of directors having been received by the department. Acting deputy director-general Donald Nkadimeng added that NTCSA would receive a transmission licence from the National Energy Regulator of South Africa (Nersa), but that transitional arrangements would enable it to play the role of system operator and buyer ahead of the enactment of the Electricity Regulation Amendment (ERA) Bill. Following delays, the ERA Bill was eventually formally introduced to Parliament on August 23, and it is understood that the Portfolio Committee on Mineral Resources and Energy will consider a programme for its passage soon. The proposed legislation has been held up as a priority by both government and organised business, with its enactment seen as crucial for creating the framework for a sustainable electricity supply industry, which has been afflicted by loadshedding for some 15 years. There are nevertheless concerns that there is too little time left ahead of the 2024 elections for both houses of Parliament to consider and approve the legislation. The designation of the NTCSA as a buyer of energy from independent power producers (IPPs) was at an advanced stage, lawmakers were told, with an application for its designation as a buyer having been approved by the Department of Mineral Resources and Energy (DMRE) and being considered by Nersa. Nkadimeng acknowledged that the operationalisation of the NTCSA was lagging the timeframe envisaged when the department first published a roadmap for Eskom's restructuring in 2019, but said progress was dependent on several processes, some of which were outside of the utility's control. The transfer of assets, people and systems started in September 2023, while operational and financial separation had been implemented. Eskom's official plan was for NTCSA to commence trading by November 2023, but the timeline was dependent on the approval of the trading licence from Nersa and obtaining lender consent. Nersa had, to date, approved only a licence for NTCSA to operate the transmission system, but full operationalisation depended on it also securing trading and import/export licences, which had not yet been approved. Following a consultation phase, lenders were expected to provide their consent by the end of August, but Nkadimeng indicated that the deadline was unlikely to be met. In a recent briefing, Eskom indicated that the NTCSA was expected to start trading by the first quarter of its next financial year, which began on April 1. The utility also indicated that the entity would provide non-discriminatory grid access to generators and manage the energy market. Work was also under way to prepare the way with the National Treasury to enable NTCSA to raise capital for its expansion projects. Under a R254-billion debt-relief package, there is currently a moratorium in place on Eskom raising any new debt. Despite the delays, the DPE stressed that significant progress had been made and indicated that the NTCSA's operationalisation was one of four current departmental priorities. The other priorities were identified as being the finalisation of a National State-owned Company Bill and a holding company for State-owned companies, concluding a new roadmap for Transnet and securing a strategic equity partner for South African Airways. Besides the licences and lender consent, the key next steps for the legal separation of NTCSA were listed as: The appointment of the perman...
Amid renewed calls for a functional online mining cadastre to help turn around South Africa's declining exploration performance, the Department of Mineral Resources and Energy (DMRE) reports that a preferred bidder has been identified and the proposed solution is currently being audited by the State Information Technology Agency (SITA). Addressing the inaugural African Critical Minerals Summit in Sandton, Minerals Council president Nolitha Fakude underlined the importance of the cadastre in supporting the exploration required for South Africa to play a role in the supply of those minerals that were increasingly in demand for both the energy transition and a range of high-tech applications. Noting that South Africa's share of global exploration spend had fallen from about 5% in 2002 to less than a percent, Fakude called for the underlying causes of the decline to be addressed. It highlighted the importance of a "functional, transparent, off-the-shelf" cadastral solution that was loaded with geological maps and could be deployed in such a way as to reduce human intervention and possible corruption, she added. "South Africa is lagging the world in the digital management of its mineral resources, and it is urgent that we have a proven system as soon as possible." Speaking on the side-lines of the summit, director-general Jacob Mbele confirmed that the department had selected a preferred bidder and that the SITA audit could be completed by late September or by early October. While no capital investment value was provided, the SITA audit implies that it is material, as such audits are triggered only for larger information technology investments by government departments. Mbele said the roll-out of the cadastre would follow the signing of the contract but said the nature and timing of the roll-out was still to be finalised. In his address to the summit, Mantashe reported that South Africa was at an advanced stage of developing a critical minerals strategy, which would seek to help the country industrialise and support its just energy transition to a low-carbon future. Nevertheless, he argued that South Africa and Africa needed to develop their own definition of critical minerals rather than relying on definitions that had been developed elsewhere and even suggested that coal should be included on Africa's list of critical minerals given its importance to energy security. Mantashe also urged Africa to develop a united critical minerals strategy "to ensure that it does not repeat the mistakes of the past, as it was done with the pit-to-port approach to mining traditional minerals". "We hope and believe this platform will take us a step closer to a continental agreement and recommit to the African Mining Vision of a 'transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development'."
Mineral Resources and Energy Minister Gwede Mantashe is aiming to seek Cabinet approval to publish an updated Integrated Resource Plan (IRP) for public consultation during an upcoming Cabinet meeting in September. Speaking on the sidelines of a critical minerals summit in Sandton, Mantashe indicated that he would be presenting the document, which he dubbed 'IRP 2023', at a Cabinet committee meeting during the first week of September with the aim of making a presentation to Cabinet itself at the subsequent meeting of the executive. Cabinet, which next meets on August 30, typically convenes on Wednesdays on a fortnightly cycle. Given the importance he is attaching to the update, the Minister confirmed that he had decided to remain in South Africa for the Cabinet committee meeting rather than to travel to Australia for the Africa Down Under conference, which is scheduled to take place from September 6 to 8. "[The IRP presentation] has deprived me from going to Australia, to Africa Down Under, because I thought it was a very important item [and] I must go myself to the Cabinet committee," Mantashe told reporters. He also confirmed that he was "obliged" to take the updated IRP through a public consultation phase once he had received approval from Cabinet to do so. However, he was adamant that the update should be finalised this year, a timeline reinforced by his continual reference to the document as IRP 2023. The document would be broken into two phases, with the first phase outlining electricity generation additions to 2030 and the second phase covering the period beyond 2030. Given Mantashe's vocal support for gas, nuclear and what he calls clean-coal technology there is an expectation that the three technologies could receive greater prominence in the draft update than was the case with the current IRP 2019, which was Gazetted in late 2019. The extension of the timeframe beyond 2030 is also likely to be supportive of a new nuclear allocation, considering the protracted lead times involved in approving, financing and building new reactors. The document is likely to be heavily contested, particularly given ongoing research indicating that South Africa's least-cost future electricity supply will arise from a combination of solar, wind and complimentary dispatchable technologies, such as batteries, pumped hydro and some gas or diesel, together with grid-balancing solutions.
The recent minibus taxi strike in Cape Town cost the Western Cape economy an estimated R5-billion, while it also caused at least R18-million in damages in the City of Cape Town, this according to the provincial government. The strike by the South African National Taxi Council started on August 3, and ended on August 10. Five people were killed during the strike, and 120 arrested for looting and damage to property. The strike revolved, among other issues, around a wave of taxi impoundments by City of Cape Town, such as for vehicles ferrying commuters without operating permits. But what is an operating permit and why do taxis need one? How many people make use of taxis in the city? Also, what does Cape Town see as the future for its public transport system? City of Cape Town Urban Mobility MMC Rob Quintas answers questions on this and other issues. Engineering News Online: What is a minibus taxi operating licence, and why does a minibus taxis need one? MMC Rob Quintas: The National Land Transport Act (NLTA) requires all public transport service providers to be in possession of a valid operating licence. The NLTA applies to all public transport service providers across South Africa. Thus, if you transport commuters for any type of remuneration, you are required to have a valid operating licence. Is a minibus taxi operating without an operating licence an illegal taxi? Yes, any public transport vehicle operating without an operating licence does so illegally. If minibus taxi owners do not have operating licences, what is their remedy? Will the minibus taxi vehicle remain impounded indefinitely? The vehicle will be released from the pound once the fine, as well as the impoundment release fee, have been paid. How many minibus taxis are operating in Cape Town without operating licences, as an estimate? The City of Cape Town does not issue operating licences and is not the custodian of the operating licence information. The Provincial Regulatory Entity receives and considers operating licence applications, and, if the operating licence is granted, issues the operating licence to the operator. What percentage of commuters travel by taxi in Cape Town? And the other modes? The city's recently approved Comprehensive Integrated Transport Plan provides the following information about the state of transport in Cape Town: Two per cent of commuters use passenger rail (this represents a decline of more than 95% from 2012 to 2022); 22% of commuters use minibus-taxi services; 9% of commuters use Golden Arrow Bus Services (GABS), MyCiTi and Sibanye; and 58% of commuters use private transport. Around 10% of people walk. What does the city see as the future of the minibus taxi industry in Cape Town within the larger public transport system? The minibus-taxi industry is a critical stakeholder and service provider. That said, all of the public transport services and modes (bus, rail, minibus taxi, metered taxi) should operate in support of each other in the interest of bringing down the cost and time of commuting. Thus, there is a role and place for the minibus-taxi industry, both the MyCiTi bus service and GABS, rail and metered-taxi services. Cape Town is experiencing increased congestion, created by growing job opportunities within the Western Cape, as well as semigration to suburbs and informal settlements. This means new people are continuously arriving with vehicles of their own, or seeking access to public transport. What is the way forward in terms of public transport? Is there any mode that can get people out of their cars? Gauteng has the Gautrain, for example. The passenger rail service in Cape Town is being managed by the Passenger Rail Agency of South Africa (PRASA), thus, national government. Unfortunately, passenger rail in Cape Town has imploded under PRASA's watch, which means the city has seen a huge increase in the number of people now making use of road-based transport, be it in private vehicles, minibus taxis or buses. As such,...
A new 'Freight Logistics Roadmap' is currently undergoing an internal government consultative process for publication before the end of the year, the latest Operation Vulindlela progress update confirms. "The roadmap will incorporate proposals to resolve the immediate operational challenges while developing interventions to fundamentally restructure the logistics sector to support inclusive economic growth," the update states. The roadmap is being developed by government and Transnet and a final draft is expected to be concluded in the third quarter of 2023. Implementation of the roadmap will be overseen by the National Logistics Crisis Committee (NLCC), established by President Cyril Ramaphosa earlier this year to address problems afflicting the sector, including a steep deterioration in rail services and ongoing port inefficiencies. Operation Vulindlela is overseeing several proposed reforms in the sector, including ones aimed at improving the efficiency of the country's ports and facilitating third-party access to the freight rail network. The update acknowledges that reforms in the sector are still facing significant implementation challenges, which require interventions to overcome. However, it does highlight the completion of the selection of an international terminal operator partner for the Durban Pier 2 container terminal, which it argues will crowd in private investment and skills, as well as the establishment of a multistakeholder task team to address congestion at the Durban Port. The report also indicates that the suite of reforms will be expanded in line with the finalisation of the roadmap and the creation of the NLCC, which was formally instituted in July and comprises representatives from the Presidency, Transnet, the National Treasury and the departments of Transport, Public Enterprises, and Trade, Industry and Competition. A joint strategic operations committee is also being established between the NLCC and the private sector, with organised business having identified the logistics crisis as one of three areas in which it will provide direct support to government. Similar joint action is also under way in the areas of electricity and crime and corruption. The NLCC's objectives have been set as improving the operational performance of freight rail and ports, restructuring Transnet to ensure its future sustainability, and implementing reforms to modernise the freight transport system and restore its efficiency and competitiveness. The NLCC includes eight workstreams focusing on the following matters: Workstream 1, which is pursuing improvements to the operational performance of the multimodal and bulk freight rail network and port system; Workstream 2, which is focussing on improving road transport operations and border transit; Workstream 3, which is pursuing plans to restore passenger rail services, with a devolution strategy targeted for finalisation by March 2024; Workstream 4, which is assessing the structural reform of the freight logistics system; Workstream 5, which is focusing on procurement; Workstream 6, which is assessing financing; Workstream 7, which is focusing on security; and Workstream 8, which is prioritising communications. The urgency of sectoral reform is also reinforced in the update, which describes Transnet's decline as posing a material risk to the country's economic prospects, with rail's underperformance having resulted in losses equivalent to 5.3% of gross domestic product in 2021 "South Africa continues to lose rail market share, with Transnet Freight Rail (TFR) volumes falling short of targeted volumes - where our rail system moves less than 40% of rail-friendly freight tonne-kilometres," the updates states, adding that port performance is poor by international benchmarks. "Actions to improve efficiencies, encourage private participation and enable increased competition and investment are required to arrest the sector's decline." During the coming quarter, Operation Vulindlela...
State-owned utility Eskom has confirmed that it is prioritising 47 grid-related projects within its larger R210-billion Transmission Development Plan that it believes could collectively add 37 GW of connection capacity over the coming few years. It is also close to finalising the approach it will be taking to the issue of curtailment as it moves to immediately unlock scarce grid capacity in high-potential renewables regions ahead of its grid investment roll-out. Speaking to editors on behalf of the transmission division this week, Eskom's Prince Moyo reported that the National Energy Crisis Committee (Necom) was actively monitoring progress on the priority projects, most of which involved transformer-related investments. Necom had also established a specific workstream to address grid-related constraints to the integration of new generation capacity. Eskom would also publish an updated Generation Connection Capacity Assessment (GCCA) ahead of the next renewables bid window to provide investors with visibility of the grid capacity and connection points, as well as to avoid the grid-related problems that arose during Bid Window Six. During the procurement round not one of the wind projects that bid for a 3 200-MW allocation progressed to financial close, owing to a claim that the grid capacity on which the projects were based had been absorbed by private projects. The release of the GCCA could be accompanied by Eskom's new curtailment framework that, if introduced, would allow for additional generation capacity to be built at points on the grid that had previously been shown as fully committed. Moyo reported that Eskom had studied the approach taken to curtailment in various other jurisdictions - including Europe, where it is standard operation procedure - and was currently finalising its approach. The framework, including how the costs would be allocated, would also require the approval of the National Energy Regulator of South Africa (Nersa) and an outline by the Independent Power Producer Office, which procures generation on behalf of government, as to how it would be implemented. Curtailment involves the reduction of the output from renewables plants in response to system-security needs or constraints and is widely employed globally to release immediate grid capacity. Engineering News understands that a preliminary analysis has indicated that if Eskom accepts curtailment of no more than 10%, the capacity of a grid-constrained province such as the Western Cape to host additional renewables generators could be almost doubled, and that as much as 4 GW of additional capacity could be connected immediately. Moyo indicated that Eskom was likely to initially limit curtailment to "single-digit percentages". Separately, an assessment was under way regarding whether those independent power producers with approved grid connection budget quotes were able to proceed with their projects, or whether the budget quotes should be revoked and reallocated to new projects with superior prospects. Moyo said the benefits of such an approach would be to ensure that grid capacity was not being "artificially used up by those who applied first but are not utilising their allocation". Despite a legal challenge, Eskom was also continuing to implement its Interim Grid Capacity Allocation Rules, which are based on a "first-ready, first-served" principle rather than the "first-come, first-served" approach that prevailed previously. The rules, which could be refined further, will be submitted to Nersa for approval and codification. Work was also under way to find a solution to the fact that bidders to the public procurement programmes were unable to secure budget quotes prior to being named as preferred bidders, leaving the grid connections on which their projects were premised vulnerable to developers of private projects. This solution is also expected to be announced ahead of the next renewables bid window.
The Port of Maputo is reaping the results of an $800-million investment that has taken the port from handling five-million tons overall in 2007, to a record 27-million tons last year, says Grindrod CEO Xolani Mbambo. "In the recent five-year period we have invested $200-million." Mbambo's comments come as the Maputo port again reported a volume increase of 30% in the six months to end-June, this while South Africa's rail and port corridors failed to meet demand. Commenting on Grindrod's financial results for the half-year period, Mbambo emphasised that it took patience as a private sector investor, and trust from the Mozambican government in the private sector, for private-sector participation projects such as that at the Port of Maputo to yield results. Ports, terminals and logistics operator Grindrod is a shareholder in the Maputo Port Development Company, along with global logistics specialist DP World, the State-owned rail operator, CFM, and other local partners. Mbambo noted that there was growing appetite in Africa to invite private players to participate in traditionally State-owned logistics assets, and particular so in East Africa. He cited the example of the recently awarded Lobito corridor concession (not to Grindrod), running from the Democratic Republic of the Congo to Angola. "The opportunities are there, in general." Mbambo regarded East Africa, which was currently recording good economic growth, as an "exciting region" for the group. Mbambo acknowledged that Grindrod, along with a European partner, had been included in the top-ten list for the recent 25-year Durban Container Terminal concession, which was ultimately awarded to International Container Terminal Services Inc (ICTSI) in July. However, he said that Grindrod's European partner "could no longer stomach the risk they perceived" associated with the South African project, despite Grindrod's insistence that it was familiar with the environment and the associated challenges. Grindrod on Friday reported a 32% increase in revenue from core operations for the six months under review, compared with the same period last year, to R3.8-billion. Revenue from noncore operations, which were proving more challenging to dispose of than anticipated, stood at R7.2-billion. Trading profit from core operations was up 16%, to R1.1-billion. Grindrod had the necessary "war chest to chase opportunities", noted Mbambo, expressing the hope that those opportunities would come "as quickly as possible", before Grindrod was accused of not putting its balance sheet to good use. He said the company had a R1.9-billion project pipeline, running from 2023 to 2025 and ranging over a number of commodities, including expanding its magnetite-handling capacity. Grindrod also aimed to diversify from one of its main revenue earners - coal - to more environment-friendly commodities, such as lithium and graphite. "We are working on a medium-term project to unlock graphite," said Mbambo.
The temporary stacks being introduced at the Kusile coal power station, where three previously operational units have been out of service for ten months, have been built and interim CEO Calib Cassim has expressed optimism that the units could be returned to service earlier than previously indicated. All three units, which have a combined capacity of 2 100 MW, became inoperable after the Unit 1 flue duct collapsed on October 23 due to a build-up of slurry. The collapse also compromised the unit 2 and 3 flue ducts, which share a common chimney with the Unit 1 flue. In the face of intense loadshedding, Eskom secured environmental authorisation earlier this year to build three temporary flues that bypass Kusile's flue gas desulphurisation plant until March 31, 2025. A decision that is being challenged in the courts. The solution was proposed by Eskom in an effort to reintroduce the units earlier than would have been the case under a scenario where permanent repairs were implemented. The temporary repair is expected to cost between R200-million and R250-million and will enable the three units to produce electricity while the permanent repairs are undertaken, albeit at a lower rating of 520 MW apiece rather than their 720 MW nameplates. The cost of the permanent repair has not yet been finalised. It was communicated previously that the first unit was likely to return towards the end of November, followed by the second unit in mid-December and the third on Christmas eve. However, Cassim told editors on Thursday that the Kusile temporary stacks had been built and that it was, thus, possible that two of the units could begin producing by mid-November. He indicated Unit 3 would be reintroduced first and was likely to be followed in quick succession by Unit 1, with the reintroduction of Unit 2 to take longer, owing to the configuration of the temporary solution. In addition, Unit 5 could be synchronised to the grid in late November, which would add additional production from the power station, which currently only had Unit 4 operating. Although Unit 5 would operate only intermittently as tests were carried out ahead of full commercial operation. Updates were also provided on the other major long-term outages and refurbishments that, together with Kusile, collectively involved 8 652 MW, including: A repair to Medupi Unit 4, which Eskom expects to bring into operation in July 2024, using a second-hand stator; The return of Koeberg Unit 1 on November 3, following a major outage slip during an extended outage to prepare the unit for a further 20 years of operation. Unit 1 is due to be returned ahead of a Unit 2 outage, which will start on November 7; The replacement of Kriel cooling tower 4 by March 2024; The completion of Majuba Unit 3's re-bagging by March 2024; and The cooling tower replacement at Tutuka by October 2024. Chairperson Mpho Makwana said the initiatives formed part of the 'Generation Operational Recovery Plan' approved by the board earlier in the year following stakeholder consultations and which aimed to recover Eskom's energy availability factor (EAF) to 70% by March 31, 2025. "While there is a gradual improvement in some areas of Generation, our recovery efforts have not fully yielded the desired outcomes, owing to the extensive work that needs to be done against a vulnerable and unreliable power system," Makwana said, while describing the EAF goal as a stretch target. Eskom failed to meet the 60% EAF target set for the end of March 2023, reporting an EAF of 56%.
Engineering News editor Terence Creamer speaks about the latest developments at Sasol's Secunda operation, including the R36-billion impairment Sasol has taken, what this means for the Secunda operation, the air quality emissions challenge Sasol is facing and what the developments at Sasol say about South Africa and the country's approach to the energy transition.
JSE-listed energy group Sasol reports that it produced its first green hydrogen in Sasolburg in June, during the commissioning phase of a project to repurpose an operational electrolyser to use renewable electricity to split water into hydrogen and oxygen. Sasol has set aside R350-million for the pilot Free State project, which is expected to produce up to 5 t of green hydrogen daily. CEO Fleetwood Grobler reports that the first green hydrogen was produced using electricity from a 3 MW solar photovoltaic facility built in Sasolburg. However, consistent production is anticipated only in early 2024 once the 69 MW Msenge Emoyeni Wind Farm, in the Eastern Cape, begins supplying the facility. "Once operational, the Msenge wind farm together with the Sasolburg solar farm will provide sufficient renewable power to commercialise green hydrogen in South Africa. "This is a huge step forward in the energy transition, not just for Sasol but also for South Africa," Grobler said during a presentation of the group's 2023 results. The green hydrogen produced in Sasolburg will be used in mobility applications and Grobler told Engineering News in an interview that formal partnership announcements would be made later in the year. "There is a demand for green hydrogen to decarbonise the mining industry, and in other mobility applications." Separately, Sasol's hydrogen-based sustainable aviation fuel (SAF) HySHiFT joint venture in Secunda, Mpumalanga, which is being pursued in partnership with Linde, ENERGTRAG and Hydregen, has been short-listed to bid for an offtake agreement under Germany's H2Global platform. Through H2Global, long-term purchase agreements are extended to projects outside of Germany that offer competitively priced green-hydrogen derivatives, such as ammonia, methanol and SAF. The products are then sold, under short-term contracts, to European consumers, with public funding used to compensate for any difference in pricing. Sasol energy business VP Priscillah Mabelane indicated that the bid should be submitted before the end of the calendar year. Mabelane also reported that a master plan had been finalised and handed over for a mega-hydrogen project in the Northern Cape and Sasol was closely monitoring progress on the development of the new port in Boegoebaai, which is seen as key to further progress.
Energy and chemicals group Sasol says it is continuing to assess several technology and feedstock solutions to bolster post-2030 liquid fuels and chemicals volumes at its Secunda refinery, in Mpumalanga, while still meeting its commitment to reduce greenhouse-gas emissions by 30% by the end of the decade. None of these alternatives have advanced to maturity, however, and the JSE group has, therefore, revised the refinery's post-2030 yearly production guidance to only 6.7-million tons from the 7.5-million-ton-plus output achieved previously. As a consequence, it has also impaired the liquid-fuels-linked assets at the integrated complex by a whopping R36-billion. Sasol's earnings before interest and tax fell by 65% to R21.5-billion year-on-year in 2023, partly because of the impairment of assets. It has, however, restated 2050 as being the useful life of the refinery, albeit with the prospect of negative cashflows arising from the fuel business after 2030, partially offset by the value that will continue to arise from the chemicals business. The group was initially aiming to sustain volumes by progressively switching from coal to gas as a transition feedstock, but it has to date failed to secure significant additional gas and has also shelved an idea for using imported liquefied natural gas on the basis that such a solution was uneconomic. Sasol reported progress on its $530-million gas drilling campaign in southern Mozambique, where five additional wells have been brought online to help extend a supply plateau to 2028 and ongoing exploration to extend production beyond 2030 yielded some positive results. However, these are regarded as contingent resources that could not yet be included in its business assumptions. Likewise, Sasol was keeping close tabs on Kinetiko Energy's exploration activities in Mpumalanga and was engaging with the company on its discoveries to understand the technical aspects of the resource, as well as to assess the economics. WORST-CASE VS DIRE SCENARIOS In an interview with Engineering News, president and CEO Fleetwood Grobler described both the impairment and the revised volume guidance as a "worst-case scenario", reporting that Sasol was making steady progress on gas, biomass, carbon capture and utilisation and energy efficiency options that could limit the falloff in volumes. These solutions would be required in addition to projects that were already under way targeting energy efficiency, reducing yearly coal usage from 40-million tons to 30-million tons, the turning down of boilers and integrating 1 200 MW of renewable energy. Grobler acknowledged, however, that the impairment and volume revisions assumed that the JSE group would prevail in its appeal of the National Air Quality Officer's decision to decline its application to have its Secunda boilers regulated using a load-based emission limit for sulphur dioxide (SO2). The appeal was lodged with Forestry, Fisheries and the Environment Minister Barbara Creecy on July 31, after Sasol's proposed alternative to the concentration-based emissions limit prescribed by the South African authorities was rejected on July 11. Should the appeal fail, Grobler said the consequences would be "dire", as it would result in the "phased shutdown" of Secunda. He expressed confidence that Sasol's load-based solution would prevail, arguing that it not only lowered SO2 emissions, but also particulate matter and nitrogen oxide emissions, while sustaining economic activity at the complex. "We are very clear of the stakes. If we cannot get the appeal and the remedies thereafter, then the impact is dire."
The Department of Industrial Engineering at Stellenbosch University (SU) has joined forces with Rham Equipment to convert a Toyota Hiace Ses'fikele minibus taxi into a battery electric vehicle (EV). The university's team, consisting largely of postgraduate students, is headed by professor Thinus Booysen, who holds the research chair in the Internet of Things. Toyota South Africa Motors is aware of the project, but is not a participant. The South African National Energy Development Institute (Sanedi) provided funding for the project, and the Transport Services division at SU donated the minibus. The Ses'fikile is by far the most popular minibus taxi in South Africa. It is assembled at Toyota's plant in Durban. Booysen says the prototype taxi is currently being verified as roadworthy, which will be followed by performance testing to see how well the vehicle matches the department's various simulations. This process will, however, make use of weights, and not real passengers. "More than 70% of public transport trips in South Africa are by minibus, which is why we are hoping to encourage the retrofitting of some of the 250 000 minibuses in the country with electric propulsion," says Booysen. "These will be cheaper than new EVs, with retrofitting also much more environmentally friendly than producing brand-new EVs." Booysen says the conversion costs about R750 000 in hardware, and took 500 hours to complete. He believes, however, that the price tag can be reduced to R470 000 if working at a scale of 1 000 vehicles at a time. The converted taxi can still accommodate 15 passengers, plus the driver, despite the added weight of the lithium-iron-phosphate (LFP) battery. LFP batteries are viewed as more thermally stable. The range on the electric vehicle is between 100 km and 120 km, and the maximum speed 120 km/h. The minibus' electric motor offers 90 kW of power, with battery capacity at 53.76 kWh. One of Booysen's team members, Stephan Lacock, who is completing his master's degree in electronic engineering at SU, funded by bus operator Golden Arrow, helped design the retrofitted minibus, along with Rham Equipment. He explains that the team removed the minibus' internal combustion engine and its associated components, such as the petrol tank, manual transmission and radiator. Throughout the development process, the retrofit had to comply with national road safety regulations, particularly the requirement not to make any permanent changes to the minibus chassis (base frame), such as drilling or welding, as well as the specific weight requirements. "Rham Equipment and our research team have successfully created a reproducible kit that includes the main components of the electric powertrain or system that propels the vehicle forward," says Lacock. "These include an electric motor, inverter, charger, electronic control unit and a single-speed reduction gearbox. Also, the powertrain is connected to a custom-designed battery pack that meets the specific operational needs of a minibus." Lacock says one of the standout features of the retrofitted minibus is its regeneration system which harnesses the energy generated during deceleration and downhill driving, thereby enhancing the vehicle's energy efficiency and overall range. "Thanks to the inclusion of a 20 kW charger, the minibus can be efficiently charged in just under three hours," he adds. What's Next? Booysen hopes to use the vehicle to prove a number of simulation models within the next two months. Following this, the next 18 to 24 months could be spent creating a locally made electric motor, inverter and vehicle control unit. These components, he believes, can be produced locally with relative ease. Battery cells could prove trickier, and costly. Ultimately, the goal is to create a local assembly line for commercial vehicles. Booysen and his team also stand ready to move on to the retrofit of a Golden Arrow bus, which should be completed in October. Booysen believes that it is time ...
Chinese President Xi Jinping says China stands ready to import more quality products from South Africa, while also encouraging Chinese enterprises to invest in the country, which he described as a "strategic" bilateral and multilateral partner. China is South Africa's single biggest trading partner and South Africa is China's largest African trading partner, with bilateral trade of $57-billion recorded in 2022. However, President Cyril Ramaphosa's administration has made the reduction of the trade deficit between South Africa and China a key priority, along with improving access to the Chinese market. "Our bilateral trade has grown exponentially, from less than R1-billion in 1998 to over R614-billion in 2022. "As South Africa, we would like to see the significant trade deficit narrowed and this visit is an opportunity for us to look at ways to do so," Ramaphosa said following a meeting with Xi at the Union Buildings and after bestowing the Chinese leader with national orders. Xi, who is on his fourth State visit to South Africa, said Chinese and South African relations had become more significant strategically since the establishment of diplomatic relations 25 years ago and were currently also of "global significance". Speaking through a translator, Xi said he had held productive talks with Ramaphosa on the "development of bilateral relations in the new era and international and regional issues of common concern". "Both President Ramaphosa and I believe that our two countries should be strategic partners, enjoying a high degree of mutual trust," he added, reporting that the two countries would support each other on "issues concerning our core interests". Ramaphosa indicated that, besides ongoing bilateral initiatives, South Africa and China would pursue multilateral cooperation at Brics, a bloc of Brazil, Russia, India, China and South Africa that would hold its fifteenth yearly summit in Johannesburg this week. That cooperation would extend further, Ramaphosa indicated, to the Forum on China-Africa Cooperation, the G77 plus China, and the G20. "President Xi and I look forward to the upcoming Brics Summit and have agreed that Brics must play an expanded role in global affairs," Ramaphosa said, while also indicating that Xi had welcomed the peace mission to Russia and Ukraine initiated by African leaders. Potential for development cooperation was also highlighted, with Xi and Ramaphosa set to co-chair a China-Africa Leaders' Roundtable on the sidelines of the State visit, which would focus on development, industrialisation and integration of African economies. "We need to be development partners," Xi declared.
South Africa's Industrial Development Corporation (IDC) and the Bank of China (BoC) have signed a framework agreement that could unlock a R10-billion funding package over the next five years to support regional projects in energy, infrastructure, manufacturing, agriculture, and mining. Signed ahead of the Brics summit in Johannesburg, BoC CEO Dr Longjian Chen said the agreement highlighted the bank's resolution to partner with South Africa in sustainability, just energy transformation and other funding initiatives. Chen also chairs the South Africa and China Economic and Trade Association. The agreement's other objective is to formalise the relationship between the IDC and BoC and strengthen their cooperation on funding initiatives, especially Chinese foreign direct investment into South Africa. IDC CEO TP Nchocho said the lack of access to capital remained one of the biggest challenges affecting entrepreneurs across the continent. "This framework agreement therefore will bring to fruition capital mobilisation and technology cooperation, among other benefits, which should ultimately lead to integration of regional economic and industrial development across the continent," Nchocho said. Meanwhile, a memorandum of understanding (MoU) was also signed between the Department of Trade, Industry and Competition and the China Africa Development Fund (CADF), which has an equity investment fund managed by the China Development Bank. Signed in Midrand by Trade, Industry and Competition Minister Ebrahim Patel and CADF chairperson Song Lei, the MoU reportedly aimed to stimulate increased industrial investments from China into South Africa The fund has invested more than $5-billion in Africa to date and is already active in South Africa's electronics, capital equipment, steel and resources sectors. The MoU makes specific reference to co-funding green economy projects, including those related to electric vehicles, green hydrogen and critical-minerals processing. "These MoUs set the stage for transformative collaborations that will significantly contribute to South Africa's industrial growth, technological advancement, and economic prosperity," Patel said.
A new study from Juniper Research has found that the lack of public infrastructure is severely limiting electric vehicle (EV) adoption in urban environments. In particular, as flat and apartment owners typically cannot have home chargers fitted, the lack of public infrastructure is acting as an active stumbling block to EV adoption within cities. While global EV charging points in service will grow from 14.2-million in 2023, to 45-million in 2027, the research identified a significant gap between public and home charger adoption, with more than twice as many home chargers as public chargers being in service by 2027. Partnerships to accelerate roll-outs in key areas, as well as improving the shared data on charging point distribution could, however, address the gap. The study found that the existing initiatives from governments are not sufficient to accelerate EV adoption, with new innovation and business models within the EV charging sector needed. "It is clear that regulator initiatives, such as requiring charging points to be added to new buildings, are insufficient by themselves to roll out charging infrastructure on a wide enough scale to drive environmental benefits," says research co-author Nick Maynard. "EV charging networks must work together with both city authorities and each other to identify how best to plug gaps in charging infrastructure, or EV adoption will continue to be limited." The fragmentation in charging networks also still limits EV adoption globally. The number of different charging rates, payment systems and access requirements is harming consumer enthusiasm, which is limiting growth of the overall space. EV charging networks must simplify networks and develop interoperability to make the ownership experience simpler, with regulator action needed to harmonise systems, says the Juniper Research study.
Electricity Minister Dr Kgosientsho Ramokgopa has acknowledged that South African cities and towns face the real prospect of ongoing power interruptions even if the balance between supply and demand is restored, owing to significant investment backlogs in the distribution sector. Quoting from research conducted when he was overseeing Infrastructure South Africa, Ramokgopa estimated the backlog to be above R30-billion, given that underinvestment in maintenance and refurbishments had been found to be growing at an average yearly rate of about R2.5-billion from 2011 to 2022. Municipal finances, he said, had not improved since that research, which meant the problem was likely larger today than when the study was concluded. "The message I'm trying to convey is that when we get to a situation where we have resolved loadshedding, it doesn't follow that communities are going to have electricity, as a result of the failing of these [distribution] assets," the Minister warned during a weekly update on the implementation of the Energy Action Plan. Besides Eskom Distribution, which is in the process of being unbundled into a separate entity, there are 238 municipal distributors, some of which are currently struggling to service communities, owing to a combination of financial and skills constraints. In addition, overdue debt owed to Eskom from municipalities now stands at R63.2-billion, having grown by R4.7-billion since April. A total of 44 municipalities, including many of the Top 20 debtors which collectively owe R48.9-billion, have been identified as having low electricity distribution competence and only 11 of the 28 municipalities that had active payment plans as of July were honouring these plans. It was also confirmed that only 13 municipalities had applied for the debt relief package announced by Finance Minister Enoch Godongwana in February and that only seven had, to date, been approved to participate in the scheme. Eskom Distribution group executive Monde Bala said that a key condition for receiving relief under the scheme was for the defaulting municipality to keep its current account up to date for a period of 12 months. Such a reconciliation could take place only once a municipality had participated for more than a year. The National Energy Crisis Committee (Necom) had established a workstream to discuss ways to finance the investment and maintenance backlogs, including by possibly securing funds from the $8.5-billion Just Energy Transition Partnership. Engagements were also under way involving the Department of Cooperative Governance and Traditional Affairs, the National Treasury, the South African Local Government Association and Eskom to discuss how the sector could be made more sustainable in future. A previous attempt to establish seven wall-to-wall regional electricity distributors was found to be in breach of the Constitution, which gives municipalities the authority to reticulate electricity. However, the tabling of the Electricity Regulation Amendment (ERA) Bill, which could have far-reaching implications for the structure and functioning of the distribution sector, had been postponed. This, owing to a mishandling of changes made to the draft, which led to Parliament sending the Bill back to the Office of the Chief State Law Advisor for re-certification. Ramokgopa refused to be drawn on the delay saying only that, from government's perspective, the passage of the ERA under the current Parliament was regarded as urgent and that Deputy President Paul Mashatile, as leader of government business, would interface with Parliament on the matter. In the meantime, Necom was working on proposals for some immediate changes to regulations with implications for the sector, on which the National Energy Regulator of South Africa (Nersa) would facilitate public consultations before making decisions. A proposed net billing framework, allowing firms and households to be remunerated for electricity they feed into the grid, was und...
Energy Ministers and officials from the Brics bloc met in Sandton on Friday to discuss potential areas of collaboration for improving access to secure and affordable energy, while transitioning to cleaner energy systems. The meeting was chaired by South Africa's Mineral Resources and Energy Minister, Gwede Mantashe, who reiterated his stance that the transition should address both the lowering of emissions and ongoing energy poverty. He also repeated that South Africa, where a long-running imbalance between supply and demand has resulted in daily power cuts, would continue to pursue all technologies, including coal and nuclear, to improve its own security of supply. However, there were also initiatives under way to accelerate the deployment of renewable energy, which currently contributed less than 10% of the country's electrical energy. Other participants to the meeting emphasised the importance of integrating social justice into the energy transitions under way in each country, as well as the importance of transmission-related investment to support the connection of renewable generation. In a statement released following the meeting, the Department of Mineral Resources and Energy (DMRE) reported that the Ministers agreed that an "inclusive, diverse and holistic" approach to the energy mix was required to achieve sustainable energy supply while averting potential future disruptions in the sector. Deliberations reportedly focused on programmes to promote energy cooperation with a view to "enhancing energy security, advancing universal access to energy, minerals for energy transitions and research and technological cooperation". The Brics countries also agreed that "balanced and economically sound" energy policies, based on national circumstances, should be employed to support energy security. On minerals for energy transitions, the Ministers undertook to exchange best practices and standards in the development and beneficiation of minerals in the country of origin. The DMRE reports that the delegates also committed to exploring various technologies and new materials that were central to global energy transitions and carbon reduction.
South Africa's automotive manufacturing sector is widely regarded as a success story; however, it must now bolster local demand and adapt its policies and initiatives amid a weak domestic growth outlook and the global, albeit uneven, shift towards new energy vehicles (NEVs). Speaking during a recent Creamer Media webinar, Toyota Wessels Institute for Manufacturing Studies manufacturing ambassador Professor Justin Barnes indicated that South Africa faces real headwinds in relation to the transition to NEVs. South Africa and Africa's automotive markets are still dominated by internal combustion engine (ICE) vehicles, while the shift towards NEVs - which constitute a wide array of technologies - is occurring rapidly in the European Union and other developed markets. NEV development is, therefore, moving along in other markets in which South Africa competes, but not its domestic market, as NEVs are still not price competitive with ICE vehicles without considerable subsidies, Barnes explained. The country, thus, faced the conundrum of needing to meet export demand for NEVs while being unable to supply the domestic market, owing to affordability constraints. The Automotive Production and Development Programme (APDP) in its current form is a particularly good incentive scheme for the production of NEVs and, therefore, the real challenge lies in the marketplace, Barnes argued. The country's automotive industry is export orientated, with the APDP incentivising firms through a rebate mechanism that is tied to a reduction in import duties. If the domestic market does not perform well, there is less of an incentive to export, he pointed out. "Without the rebate model, we are not a globally competitive export producer. The key issue, therefore, is how do we stimulate demand for NEVs in South Africa, or how do we displace exports of present vehicles into the developed world markets that will still be consuming ICE vehicles?" Barnes questioned. National Association of Automotive Component and Allied Manufacturers executive director Renai Moothilal reiterated Barnes' sentiments about bolstering local demand and mentioned scope for provincial support structures to explore market-stimulation initiatives. "We need to start thinking creatively - how do you support the roll-out of charging stations and the like. I think there's sufficient impetus in supply-side support. What is missing in the South African context is [a clear plan for] reshaping the market. It is important from the way the incentive package works, and not just from a 'can we sell vehicles' perspective," he outlined. To meet the market demand for ICEs and NEVs, Barnes suggested that South Africa's automotive industry's opportunity lies in Africa and in creating regional value chains. Only ten-million adults in South Africa can afford a new vehicle, and projections show that this is not set to increase, owing to the challenging economic climate. However, there are opportunities on the continent, with several countries having developed a middle class and, therefore, South Africa should position itself as a hub for the region, he highlighted. Barnes called for strategising an African automotive pact that will provide the biggest opportunity for growth in traditional vehicle production, but that will also support potential production in relation to NEVs. "We will actually be facing major demand growth in . . . the traditional ICE . . . and NEV space, and a combination could be a huge advantage for us going forward," he highlighted. Coega Development Corporation senior business development manager Thandile Jack also reiterated Africa's presenting a market opportunity for the country and added that the Middle East presents a new market in terms of NEVs. Barnes explained that the country's automotive manufacturing sector has a very strong foundation that has been established over generations, which ensures that it will be producing vehicles well into the future. "The question is whethe...
Engineering News editor Terence Creamer discusses the importance of the Electricity Regulation Amendment (ERA) Bill; why the Bill has not yet been tabled in Parliament despite Cabinet having approved its tabling in March; and the implications of this delay.
Eskom reports that it has made material advances in developing what it calls a 'virtual wheeling product' that will allow one or more generators to transact with multiple offtakers, including those supplied by municipal distributors. However, the utility insists that a national wheeling framework is still urgently required so as to standardise the calculation of wheeling charges across all of South Africa's distributors, with such charges currently varying significantly from distributor to distributor. Eskom senior adviser for electricity pricing Onicah Rantwane also reports that, while the virtual wheeling proof of concept is well advanced, further development work is being undertaken to refine the solution ahead of implementation, for which there is no firm date. She also notes that the product is heavily reliant on the deployment of meters that are able to provide time-of-use readings, as well as the associated information communication technology systems needed to collect and process that data. In addition, it would be helpful if cost-of-supply studies could be completed across the distribution sector so as to ensure use-of-system charges are calculated using a more standard formula to make them both fair and affordable. Speaking during a webinar hosted by EE Business Intelligence, Rantwane reported that the virtual wheeling model had been designed to integrate with existing Eskom and municipal billing systems, as well as for revenue neutrality. It also differs markedly from the prevailing wheeling system, which is mostly confined to bilateral agreements between an individual generator and offtaker, by catering for multiple generators and offtakers, with accounts settled by way of a consolidated "refund" rather than through individual credits. Under the model, information will be aggregated by the buyer - which could be a corporate, a trader, or an aggregator - and a single refund for the wheeled portion of the electricity consumed by the various individual customers will be paid to the buyer. The model is anticipated to be attractive to companies such as retailers with multiple stores in various locations that have power purchase agreements with several renewables generators that are wheeling electricity through the grid. The buyer, which could be the company itself or a trader, will aggregate the generator and customer data through a buyer platform, which will interface with an Eskom aggregation platform to reconcile the data so that the refund can be calculate and settled. The settlement is based on Eskom's avoided purchase cost. The buyer will then allocate the wheeled energy credit to the individual customers, which means refunds will be paid on an aggregated basis rather than against individual bills. "The basis for the refund is that the individual customer will be paying the full bill, including the energy purchase from Eskom and the wheeled energy. "Eskom has, therefore, overcharged the individual accounts and therefore a refund is due," Rantwane explained. The concept does not depend on amendments to the electricity supply agreements, including with municipalities, as not credits are provided to the municipality and municipal revenue is also unaffected. However, the creditworthiness of municipalities, many of which owe Eskom outstanding debts, could limit deployment in certain areas. "Eskom will have to receive payment before we can refund the buyer or the trader. [If] we haven't received the payment from municipalities for that month, we will not effect the wheeling refund," Rantwane confirmed.
It is currently taking an average of 25 months for government to complete import duty investigations and to provide the necessary Ministerial approvals for the South African Revenue Service to implement duty increases or reductions, a new report shows. Compiled by XA Global Trade Advisors, the analysis also highlights a marked slowdown in turnaround times over the past ten years, with the longest outstanding case in 2013 having been 17 months, which is eight months shorter than the current average turnaround time. Import duty investigations are officially meant to be concluded within six months. CEO Donald MacKay believes the delays are also the chief cause for a steep decline in the number of applications to the International Trade Administration Commission of South Africa (Itac) for duty increases or reductions. The report shows that only four new applications were made by private firms in the six-months to June 30, a ten-year low. "At times of economic distress, we should see the use of trade policy instruments rising, yet we find the very opposite happening," Mackay argues. Macsteel CEO Mike Benfield confirms the report's assertion that business is opting out from using the trade remedy, indicating that the circumstances that prevailed at the time of the application typically no longer applied by the time a decision is eventually made. For instance, Macsteel's application for a 10% duty on black bar was overtaken by other market circumstances, such as intensifying loadshedding, which had become even more threatening to the future of its bright-bar facility than import competition. The effectiveness of the proposed protection, Benfield adds, is often undermined further by the proposed reciprocal-agreement stipulations attached to the proposed duty. The report, which is the third produced by XA, calls for a rethink of such reciprocal agreements, arguing that they are being unevenly applied, add significant cost without a commensurate benefit, slow down the process, and are causing businesses to opt out of the process. It also asserts that the delays are costly, calculating them at R2.6-billion in duties having been paid where there is no local producer and R4-billion in duties not collected in duties where protection has been requested. These costs have been determined by calculating the difference between the current duty and the requested duty and multiplying this rate difference by the value imported from month seven of an investigation up until June 30, 2023. The report indicates that Itac is not the only reason for the slowing turnaround times, with the evidence pointing to rising dwell times with the two responsible Ministers, Trade, Industry and Competition Minister Ebrahim Patel and Finance Minister Enoch Godongwana. MacKay confirms that the report's findings have been shared with Itac and the government departments and that an initiative is under way in a bid to have lawmakers discuss its contents at the level of a portfolio committee meeting. The information has also been shared with Business Unity South Africa and there are indications that the formation plans to prioritise discussions with government on the delays in an effort to secure a solution. XA has also outlined a possible import investigation masterplan, which it believes could help remedy the problem. "We are left with a trade policy system which has almost completely ceased working. This has to be addressed," MacKay avers.
Naamsa | The Automotive Business Council reports that new-vehicle sales increased by 8.6% year-on-year in the second quarter of the year, while new energy vehicle (NEV) sales grew by 100.7% year-on-year. The industry, however, sold 8.1% fewer new vehicles quarter-on-quarter, which likely reflects the strain on consumers' budgets following a further interest rate increase and ongoing affordability considerations. The strong performance of the new-vehicle market during the second quarter of this year, compared with the same quarter of last year, reflects the lower base effect owing to the impact of the severe flooding in Kwazulu-Natal on vehicle production and supply chain disruptions at the time, the entity states. The passenger car segment, in particular, remained under pressure in view of higher interest rates and inflationary pressures, while the improved performance in the heavy commercial vehicle segments is mirroring the increasing reliance on road transport due to ongoing structural rail network challenges. Positively, NEV sales by 18 industry brands grew from 738 units sold in the second quarter of last year to 1 481 units sold in the second quarter of this year. Following a significant year-on-year increase of 421% from 896 units in 2021 to 4 674 units in 2022, comprising 0.88% of total new-vehicle sales, NEV sales for the first half of this year increased by a further 47.1% to 3 146 units, compared with the 2 139 units sold in the first half of 2022. Battery electric vehicle sales in the first half of this year, at 502 units, were already at the level of the 502 units sold for the full 2022. Naamsa says a timely NEV policy framework to support investment decisions for NEV manufacturing and to safeguard export volumes into the European market, is imperative for the domestic automotive industry's inevitable transition to NEVs. Moreover, the industry body reports that the second quarter saw the automotive industry gaining 105 jobs, with aggregate industry employment having increased from 33 392 at the end of March to 33 497 at the end of June. The average monthly vehicle manufacturing industry employment number for 2022 was 33 321, compared with 30 697 in 2021. Naamsa says there was a recovery in vehicle production to pre-pandemic levels in 2022, with various new generation models launched by manufacturers. The industry body elaborates that average industry capacity utilisation continues to recover to pre-pandemic production levels, but the ongoing global semi-conductor shortage, as well as loadshedding in South Africa, have impacted on the operations of original-equipment manufacturers differently. These two factors typically increase costs in the domestic supply chain, while raw materials remain subject to exchange rate movements and the global price index. The global semi-conductor shortage resulted in about 4.2-million fewer vehicles produced in 2022, following a loss of about seven-million units globally in 2021. Although global vehicle production increased by 6% to 85-million vehicles in 2022, up from the 80.2-million units produced in 2021, it was still 7.7% below the pre-pandemic level of 92.1-million vehicles produced in 2019. South African vehicle production increased by 11.4% to 555 889 units in 2022, compared with the 499 087 units produced in 2021, which exceeded the global vehicle production growth figure of 6%. The South African market still leads in the continent's vehicle production, accounting for 54.4% of Africa's total vehicle production, followed by Morocco, which accounts for 45.5% of the total. Aggregate capital expenditure (capex) by major light vehicle manufacturers in 2022 amounted to R7.1-billion, mostly owing to new-generation model investments, compared with the R8.8-billion spent in 2021. Naamsa adds that much of the capex invested by the industry are linked to the Automotive Production Development Programme that South Africa has in place to promote higher levels of production and the dev...
Transnet Port Terminals (TPT) CEO Jabu Mdaki is optimistic that the joint venture (JV) with International Container Terminal Services Incorporated (ICTSI) will be implemented from the start of the State-owned company's new financial year in April and become a "catalyst for change" across the Transnet-owned division. The Philippines terminal operator was named in April as the preferred bidder to partner with TPT at the Durban Container Terminal (DCT) Pier 2, and processes are currently under way to advance the transaction towards financial close. Mdaki tells Engineering News that the partnership is being pursued in a bid to bolster the operating performance of South Africa's biggest container terminal, which handles 72% of the Port of Durban's throughput and 46% of the country's overall port traffic. ICTSI, which has 34 terminal operations in 20 countries, including four in Africa, will buy a 50% (minus one share) interest in the terminal for an as-yet-undisclosed fee and will, together with TPT, participate in the 'Newco' being established to operate DCT Pier 2 for the coming 25 years. The new company will operate independently with its own board and executive committee for the period, after which the terminal will revert to TPT. The partnership could be extended to 30 years in the event that berth deepening of the North Quay at Pier 2, on which a proposed expansion of the terminal's capacity is dependent, is delayed. Transnet National Ports Authority is responsible for deepening the berth from 12.8 m currently to 16.5 m so as to enable the terminal to accommodate three 350 m vessels at Berth 205, which would carry average consignments of up to 12 000 twenty-foot equivalent units (TEUs) in a single call. "Our expectation is that, come April 1, 2024, the JV will be operating," Mdaki reports, adding that significant progress is being made to secure all the approvals needed to complete the transaction, including from the Department of Public Enterprises and the National Treasury. ICTSI is conducting a due diligence exercise in parallel. Several TPT managers, including Mdaki, will be travelling to the Philippines during August to gain insight into ICTSI's operations and its operating philosophy. Transnet and government, which is promoting private sector participation in South Africa's ports and railways as part of reforms being pursued under Operation Vulindlela, believe ICTSI's experience, technology and capital will assist TPT in raising DCT Pier 2's capacity to 2.8-million TEUs over the coming five years. Currently the terminal is handling about 1.9-million TEUs; a tempo that the partners aim to raise through targeted investments designed at delivering a ship working hour improvement from 50 to between 80 and 120, while also increasing gross crane moves per hour from the current 18 to 28. No capital investment figure has been disclosed, but Mdaki confirms that investments will be made by the new entity, which could even raise capital independently of its owners, to increase the terminal's capacity. Mdaki reports that a key objective will be to increase crane density at the terminal with only a minor reconfiguration. "The critical equipment at the terminal are the ship-to-shore cranes. Pier 2 currently has 14 cranes, but the JV could add about six more." Investments are also likely to be made into straddle carriers and rubber-tyred gantry (RTG) cranes, with a decision yet to be made as to whether it might be more efficient to convert most of the operation primarily to RTG cranes. Mdaki insists there will be no retrenchments and that all 1 988 of DCT Pier 2's employees will retain the same terms and conditions as their TPT peers. He reports that intensive consultations have been ongoing with staff and unions since August 2021, with a joint task team having been formed with the South African Transport and Allied Workers Union and the United National Transport Union at the level of their general-secretaries and full-time shop st...
Independent international engineering and consulting firm ILF Consulting Engineers (ILF) has entered into a partnership agreement with Hyphen Hydrogen Energy, which is preparing to build a $10-billion green hydrogen project in southern Namibia. The project is being developed in the Tsau // Khaeb National Park, near Lüderitz, and could produce 350 000 t/y of green hydrogen once at full scale. ILF has developed its green-hydrogen credentials on projects in Canada, Finland and Austria, and will provide Hyphen with project management services, technical expertise, as well as procurement and contract advice. It will also provide implementation expertise on the project's socioeconomic development goals, including the creation of 15 000 construction jobs, 3 000 permanent jobs and 30% local procurement. Hyphen CEO Marco Raffinetti says ILF's hydrogen experience will support it in meeting project timelines and Namibia's development objectives. Hyphen is a joint venture between Nicholas Holdings Limited and ENERTRAG, but the Namibian government confirmed in June that it would take up a 24% equity stake in the project. Hyphen is targeting yearly production of one-million tonnes of green ammonia by 2027, with plans to increase yearly production to two-million tonnes by 2029, mostly for export. Director of Hydrogen at ILF, Dr Michel Kneller, described the Namibian development as a "lighthouse project" that was poised to contribute to the energy transition under way globally.
Energy Council of South Africa CEO James Mackay believes an expedited promulgation of the Electricity Regulation Amendment (ERA) Bill together with the unbundling of Eskom will send a clear signal to stakeholders and investors that the "political will" exists to place the country's poorly performing electricity sector on a sustainable pathway. He tells Engineering News that South Africa's current market structure, which is dominated by a single vertically integrated utility, is out of line with the markets in operation in other developed and developing economies and is, thus, an impediment to much-needed generation, transmission and distribution investment. "We are probably one of the most backward economies globally around reform," Mackay asserts, noting that other middle-income economies, as well as all the Brics bloc countries, have already unbundled their markets to support their energy transitions. He describes the enactment of the ERA legislation as both an important market signal as well as a signal of the country's commitment to reform. "We've got great technical plans and good technical ideas of what needs to be done, but they are sitting there pending a real political signal. "I think that the ERA encapsulates that, but if there isn't political will to push the ERA through, then a lot of the plans will simply gather dust," Mackay, who is deeply involved with the National Energy Crisis Committee (Necom), tells Engineering News. For that reason, business used its latest regular meeting with President Cyril Ramaphosa and several other government Ministers at the Union Buildings on August 1 to make an appeal for the ERA to be approved by lawmakers during the current Parliamentary term. It was agreed at the meeting that the Bill should be expedited within the sixth Parliament as one of the "critical next steps" required to restore confidence. In a joint statement, it was argued that the ERA Bill was crucial to ending loadshedding, expediting energy development, expanding transmission infrastructure, establishing a competitive electricity market, and attracting investment in the energy sector. Mackay acknowledges that having the legislation approved ahead of the 2024 elections will prove challenging, particularly given that no formal programme for its passage through Parliament has been agreed following the Bill's tabling on July 20. However, he is convinced that there is still time to make material progress, pointing to the speed at which the Eskom debt relief package was processed by lawmakers earlier this year. "Until the ERA is actually through Parliament, everyone is going to be unsure if there's the political will to reform our energy system," he adds. Likewise, Mackay views Eskom's unbundling as crucial for expanding the grid, as well as to provide local and international investors with the assurance that the playing field between Eskom and independent power producers is truly level. He welcomed the National Energy Regulator of South Africa's recent decision to grant the National Transmission Company South Africa (NTCSA) a transmission facilities licence and expressed optimism that the associated trading and import/export licences with be similarly transferred from Eskom to the NTCSA in the not-too-distant future. The unbundling of Eskom took a further step forward this month, when Public Enterprises Minister Pravin Gordhan sent a letter to the board providing his consent for the transfer of Eskom's distribution assets from Eskom Holdings to a newly established distribution company. However, independent boards have yet to be appointed at any of the entities, including the NTCSA, whose unbundling has been prioritised. Once the unbundling is in place, Mackay believes it will be possible for new codes to be released for public comment, which will outline how new market arrangements, such as wheeling and trading, will be implemented. These far-reaching market reforms, Mackay explains, are designed to ensure that the ...
Nissan South Africa (SA) will end production of the NP200 half-ton bakkie in March next year, says Nissan SA country director Kabelo Rabotho. This follows 16 years of production at Nissan's Rosslyn plant, in Pretoria. March will then also signal the end of the popular half-ton bakkie as a product in South Africa, despite Volkswagen, Renault and Toyota hinting at possible new model introductions in this segment. South Africans for many years had various half-tonners to choose from, including the Ford Bantam, Fiat Strada and Chevrolet Ute. There is little doubt that Nissan SA will feel the loss of the more affordable NP200 compared with the one-ton products, with the NP200 recording three-digit sales every month. "No immediate replacement model is planned, although Nissan is currently evaluating other alternatives in line with the ambitions of its Africa mid-term plan," says Rabotho. He adds that "Nissan remains fully committed to South Africa and the wider continent as the last frontier of the automotive industry". Rabotho says the Rosslyn manufacturing plant remains Nissan's light commercial vehicle hub for Africa, with the locally produced Navara pickup a core model that "will enable Nissan's ambition across the continent".
Engineering News editor Terence Creamer discusses the latest developments with regard to the Koeberg nuclear power station, a big battery storage programme and the unbundling of Eskom.
Public Enterprises Minister Pravin Gordhan has given an assurance that there is no plan to privatise any of the three Eskom entities of generation, transmission and distribution currently being unbundled in line with a policy initially outlined in the so-called 'Eskom Roadmap' of 2019. In a statement clarifying a letter sent to the Eskom board regarding the restructuring of the distribution company, but which included the words "approval for sale", sparking speculation that the business was being privatised, Gordhan insisted that the entity would remain fully State owned. "The reform of Eskom requires the restructuring of Eskom. "This means establishing three separate companies housing Generation, Transmission and Distribution businesses - 100 percent owned by the State. "In order to implement the above, corresponding assets need to be transferred from Eskom Holdings to each of the new companies," Gordhan outlined. He explained that implementing the reform involved transferring the assets into the newly established distribution company, which required the consent of both Ministers of Finance and Public Enterprises in line with Section 54 (2), (c) and (d) of the Public Finance Management Act. "The letter to the board contains the consent of the Minister of Public Enterprises for the transfer of assets from the Holding company to the newly established Distribution company." The Minister argued that Eskom's current structure was no longer suitable to meet the country's energy needs, given global developments precipitated by both new technologies and the need to respond to the threat of climate change. "The restructuring process is a crucial part of ensuring energy security in the future for all South Africans. "The Department of Public Enterprises and government are fully committed to the implementation of the roadmap and in retaining 100% control of these entities," Gordhan said, describing some of the commentary as misinformation aimed at undermining public confidence in the process.
The Presidency is exploring several avenues for increasing the grant component in the financing of South Africa's Just Energy Transition Investment Plan (JET-IP), following broad-based stakeholder criticism about the limited nature of such funding in the initial $8.5-billion pledge made by various developed countries. The head of the Presidency's JET-IP project management unit (PMU), Joanne Yawitch, reports that discussions are under way with multilateral funding institutions, philanthropic organisations and developed economy governments about additional grant allocations for JET-IP projects and that the details are currently being finalised. South Africa unveiled the contents of the JET-IP late last year and indicated that the $8.5-billion Just Energy Transition Partnership concluded with the European Union, France, Germany, the UK and the US in 2021 was viewed as providing only catalytic funding for a far larger $99-billion, or R1.5-trillion, five-year investment programme. The electricity component of the plan envisages investment of R648-billion over the period for generation, storage and network infrastructure, with the balance required to support the emergence of new energy vehicle manufacturing (R128-billion) and the development of a green-hydrogen industry (R319-billion). "One of the big criticisms from across the board was around the level of grants in the package. "So, we have worked in the first half of this year with quite a wide range of philanthropies, countries and multilateral agencies to try and up the level of grants in the package . [and] I think that we starting to get somewhere in relation to the grant package," Yawitch said during a Presidential Climate Commission (PPC) consultation on the creation of a just transition financing mechanism. The grant funding would be required for the so-called 'just' investments associated with South Africa's energy transition, particularly projects that could not be implemented on the basis of concessional loans and where fiscal injections would also be insufficient. Yawitch made particular reference to skills development, municipal upliftment and small business development initiatives that had been included in the JET-IP, but which were described by civil society stakeholders as inadequate when they were consulted on the plan earlier in the year. The PMU planned to address these deficiencies in an implementation plan, which is scheduled to be presented to Cabinet for approval in October following a series of "subject-related" consultation workshops. She said the implementation plan would provide a "detailed investment roadmap" for the deployment of the funding but stressed that ongoing refinements would be required. The PMU was also currently giving attention to the funding mechanisms for repowering and repurposing initiatives at Eskom's retiring coal power stations. This, in light of the fact that the National Treasury had placed a moratorium on the utility raising any new debt as one of several conditions linked to a R254-billion debt-relief plan. The initial JET-IP assumed that Eskom would be able to take up concessional loans for the repowering and repurposing of the stations, but the moratorium meant that alternatives now had to be explored. This was taking place in parallel with an assessment of the condition of the coal fleet and whether the decommissioning schedule should be delayed in light of South Africa's acute electricity supply shortfall. In the meantime, the PCC was intensifying its own consultations on a so-called just transition financing mechanism and had published an initial consultation paper on a proposed approach for matching just transition funders with suitable projects. The paper suggests that the Development Bank of Southern Africa be appointed to manage the mechanism but a final recommendation to government in this regard is yet to be made.
A total of 17 bids have been received in response to the Department of Mineral Resources and Energy's (DMRE's) inaugural public procurement for battery energy storage system (BESS) projects. The BESS request for proposals was launched on March 7 with an initial bid submission deadline of July 5, which was subsequently postponed to August 2 as a result of delays to the issuance of cost estimate letters for grid connections. The DMRE is seeking to procure BESS projects with a combined capacity of 513 MW and a minimum of four hours of storage, or at least 2 052 MWh. The batteries are set to be installed in close proximity to five substation sites in the Northern Cape, which have been specified by Eskom. The DMRE has published a list of the 17 projects, along with the names of the project companies, which include: Sol Invictus 6 BESS, bid by Sol Invictus 6 (Pty) Ltd; Hyperion 2 BESS, bid by Cyraguard (Pty) Ltd; New Hope 2 BESS, bid by Lacerta Energy (Pty) Ltd; Impala BESS, bid by Impala Solar Plant (RF) (Pty) Ltd; Zuurwater BESS, bid by Aggeneis PV2 (Pty) Ltd; Mogobe BESS, bid by AEP Mogobe (Pty) Ltd; Kenhardt BESS, submitted by a consortium to be incorporated; ACWA BESS 1, bid by ACWA BESS 1; Oasis Mookobi, bid by EDF Development South Africa (Pty) Ltd; Oasis Aggeneis, bid by EDF Development South Africa (Pty) Ltd; Oasis Nieuwehoop, bid by EDF Development South Africa (Pty) Ltd; Sonbesie BESS, bid by Sonbesie Power Plant (RF) (Pty) Ltd; Boitshoko BESS; bid by Boitshoko Solar Power Plant (RF) (Pty) Ltd; Red Sands BESS, bid by AGV Projects (Pty) Ltd; Tulip, bid by Veld PV South (Pty) Ltd; Protea, bid by Protea Solar Power Plant (RF) (Pty) Ltd; and Neo BESS, bid by the Neo BESS Bidder Consortium. The DMRE did not provide further details regarding the identities of the consortium members behind each bid, neither did they indicate whether the bids were evenly spread across the five selected sites. The substation sites selected by Eskom have been named previously as being Aggeneis, Ferrum, Garona, Mookodi, and Nieuwehoop. The department also did not comment on the tariffs bid, saying only that the information could be provided only once the evaluation of the bids was completed. "It is envisaged that preferred bidders will be announced within the next two months," the DMRE told Engineering News in response to questions.
South Africa’s electricity reforms are again being prioritised amid uneven progress. Engineering News editor Terence Creamer unpacks the developments.
To unlock the estimated R235-billion in investment required to strengthen and expand the grid in a way that positions it to connect the 53 GW of new generation capacity that will be required by the early 2030s, a new consultation paper has been published making the case for South Africa to consider alternative funding models, including off-balance sheet financing. Titled 'Better Finance, Better Grid', the paper's lead authors are Professor Mark Swilling and Erica Johnson, of the Centre for Sustainability Transitions (CST) at Stellenbosch University, and it has been published jointly by CST, the Centre for Renewable and Sustainable Energy Studies and the Blended Finance Taskforce, with support from the Open Society Foundation. Published amid serious transmission infrastructure constraints, particularly in provinces in the south-western regions of the country with potent wind and solar resources, the report also follows on from a call by Electricity Minister Dr Kgosientsho Ramokgopa for grid investment to receive greater investment priority. Ramokgopa has indicated that the balance sheets of both Eskom and the national fiscus are unlikely to be sufficient to cover the country's future grid investment needs and has reported that a "healthy" debate is currently under way about possible alternative funding models that seek to mobilise private capital and skills while ensuring that the grid itself remains State-owned. Eskom's current Transmission Development Plan states that more than 14 000 km of new power lines need to be constructed in the next ten years. To meet the target, the utility says 1 500 km of new lines will have to be built yearly to 2032, up from a current yearly tempo of only 300 km. In addition, some 122 600 MVA of new transformation capacity will have to be introduced, representing 77% of Eskom's current installed base of just over 160 000 MVA. The utility has indicated that it will be relying more heavily on the engineer, procure and construct, or EPC, contracting model as it seeks to accelerate the pace at which transmission infrastructure is built and has indicated that any other delivery and funding model would require a policy intervention. The consultation paper states that increasing the grid build rate will be essential to enable further increases in generation capacity after 2030, even though about 17 GW of transmission grid capacity, including 5 GW in areas with the best renewables resources, could be unlocked in the short term through targeted optimisation initiatives. Achieving such optimisation would involve wind/solar colocation, oversizing the renewables generators relative to the available grid capacity, investing in battery storage and possibly some form of voluntary curtailment, which would increase revenue uncertainty for generators. The report also concludes that Eskom's current debt burden places constraints on the ability to attract sufficient capital for the transmission grid build out. Unpacking the report's findings at an event hosted jointly by the Development Bank of Southern Africa and Rand Merchant Bank, CST's Nina Callaghan argued that this financial constraint would persist even after the National Transmission Company of South Africa (NTCSA) was unbundled. Eskom's debt stands at about R390-billion and the NTCSA's portion of that debt will be reflected in an intra-company loan with Eskom Holdings once the separation becomes effective. The separation process itself took a step forward at the end of July when the Energy Regulator granted the NTCSA a 25-year transmission facilities licence, with adjudication of the trading and import/export licences, which are required for NTCSA's operationalisation, to follow. Full operationalisation is also dependent, however, on Eskom securing lender consent and the appointment of an independent NTCSA board. Given these financial constraints, the report argues that financing the transmission infrastructure off-balance sheet could help increase acces...
The Presidency and organised business have called for the passage of the Electricity Regulation Amendment (ERA) Bill to be expedited within the sixth Parliament, following a meeting on August 1 to discuss the progress being made under a previously announced partnership to jointly tackle the country's energy, transport, and crime and corruption crises. The Bill was eventually tabled in the National Assembly on July 20 following its approval by Cabinet on March 29 and no timetable has yet been set for its passage, with some expressing doubt that there is sufficient time for lawmakers to consider the Bill before the 2024 elections. However, in a joint statement, the Presidency and organised business identified the passage of the Bill as one of several "critical next steps" required to restore confidence. In a joint statement, it was argued that the ERA Bill was crucial to ending loadshedding, expediting energy development, expanding transmission infrastructure, establishing a competitive electricity market, and attracting investment in the energy sector. Speaking during a business report back session following the meeting with government, Energy Council of South Africa CEO James Mackay said that the appeal was for Parliament to treat the ERA as "emergency" legislation, as the Bill was "fundamental to unlocking a lot of the reform confidence and direction that will enable a lot bigger investment". However, Democratic Alliance shadow energy minister Kevin Mileham raised doubts about whether there was sufficient time for the Bill to be processed by both the National Assembly (NA) and the National Council of Provinces (NCOP) before the 2024 elections, which could take place as early as May. While expressing support for the passage of the Bill, which he described as urgent and overdue, Mileham told Engineering News that the NA would need to complete both its public participation and its own deliberations before Parliament breaks in either late November or early December. This, to give the NCOP sufficient time, from the reopening of Parliament in February till the general elections, to undertake its own separate processes. He noted that the public participation process alone for the Upstream Petroleum Resources Development, which involved hearings in all nine provinces, took close to eight months and there was still intensive work required during August before the NA could provide its approval, which was required before the NCOP could undertake its own process. He also noted that the ERA Bill was not yet on the programme of the Portfolio Committee of Mineral Resources and Energy. "Therefore, I don't see the ERA being passed by the current Parliament," Mileham told Engineering News. The other electricity-related priorities outlined included: Completing the establishment of the National Transmission Company of South Africa (NTCSA), a move that is viewed as necessary to create a level playing field for electricity generators and to enable increased investment in transmission infrastructure; and Fully operationalising the 'One Stop Shop' to fast-track renewable energy projects. This includes ensuring that adequate capacity and systems are in place to facilitate authorisations for energy projects and reduce lead times to construction. Although the Energy Regulator, the highest decision-making body of the National Energy Regulator of South Africa, approved a 25-year transmission facilities licence for the NTCSA on July 27, it refrained from approving the two other licences required for the operationalisation of the new independent grid company. Eskom has formally welcomed the decision to approve the licence for the operation of the transmission system, but noted that the NTCSA had also applied for a trading licence and an import/export licence. "The granting of the requisite operating licences to NTCSA is one of the key dependencies required to enable the operationalisation of the NTCSA," Eskom said in a statement. The other two dependenc...
Energy and chemicals group Sasol has moved to formally appeal a decision of the National Air Quality Officer (NAQO) to decline its application to have its Secunda boilers regulated using a load-based emission limit for sulphur dioxide (SO2) rather than the prevailing concentration-based emissions limit used for setting Minimum Emission Standards (MES). The plants are currently operating on the basis of a ten-year postponement, until March 31, 2025, from meeting new plant standards for SO2 emissions, which was granted on February 23, 2015. The appeal has been lodged with Forestry, Fisheries and the Environment Minister Barbara Creecy following NAQO's rejection in early July of Sasol's "alternative" approach, which the JSE-listed company claims to have made in line with Clause 12A of the MES. The application was rejected on several grounds, including the fact that the Secunda Operations are located within the Highveld Priority Area, wherein the national ambient air quality standards for SO2 and particulate matter (PM) emissions are frequently exceeded. Through the appeal process, Sasol states that the Minister is empowered to consider its 12A application afresh. In practical terms, the company is requesting that it be allowed to reduce its SO2 emissions by reducing the total number of boilers in use at Secunda and thus the load, rather than by reducing the concentration of SO2 produced by each boiler. The group argues in its appeal that this approach will result in an improvement of ambient air quality within the local airshed over-and-above MES compliance, while ensuring that its operations continue. The Secunda complex is located in the Mpumalanga province where the majority of Eskom's coal-fired power stations are also located, which has resulted in the air in the area being highly polluted. Sasol also claims that its proposed 'integrated emission reduction solution' will achieve double the reductions on SO2 emissions than would be the case under the concentration-based limit, while also reducing PM and nitrogen oxides, or NOx, emissions. The plant's greenhouse-gas emissions, Sasol adds, would also be reduced by 30% by 2030, as the proposal involves "turning down" the steam boilers used to produce coal-based electricity and replacing it with renewable electricity or displacing it through energy efficiency. Sasol notes that it has procured more than half its 1 200-MW renewable-energy target and that the first renewable electricity is expected to become available in 2025. The remaining operating boilers will continue to produce the steam required for the production of synthetic fuels and chemicals. The solution is contingent, however, on the SO2 emissions from the boilers at the steam plants of its Secunda Operations being regulated using a load-based emission limit instead of the concentration limit currently being prescribed in the MES from April 1, 2025 onwards. In a statement confirming the appeal, Sasol sought to illustrate the difference between the two approaches to limiting SO2 by using the analogy of sugar and caffeine consumption in cups of coffee, whereby the number of cups represented the boilers, the sugar represented SO2 and caffeine represented PM and NOx. Under the load-based approach the total number of cups of coffee consumed is reduced, lowering both the sugar (SO2) and the caffeine (PM and NOx) intake, whereas under the concentration-based approach only the number of spoons of sugar is reduced and the caffeine intake remains unchanged. Sasol argues that its proposal does not seek an exemption from regulation, with Sasol energy operations and technology VP Simon Baloyi stating that it is taking full responsibility for reducing its environmental footprint. "However, this requires time, effort and capital," he adds.
The head of Eskom's transmission division says he was not surprised by the decision of the Energy Regulator to approve only one of the three licence applications made by the National Transmission Company South Africa (NTC), which is being unbundled from Eskom. However, the Presidency has expressed concern that the decision to process the licence applications separately could delay the operationalisation of the independent grid company, which it views as a priority reform for the embattled sector. The Energy Regulator, Nersa's highest decision-making body, approved a 25-year transmission licence for NTC during its meeting on July 27, and indicated that the trading licence and an import/export licence, which had also been applied for in a bundled application, would be processed separately. Nersa is yet to publish its reasons for decision and has not yet provided a firm timeframe for the processing of the other two licences, but heralded the decision to grant the transmission licence to NTC as a major "milestone". "The NTC's independence is an important signal to all stakeholders, including investors, that they will have non-discriminatory access to the transmission system," Nersa said in a statement. Eskom group executive for transmission Segomoco Scheppers described Nersa's decision to process the licences independently as an administrative one, which he did not view as presenting a major impediment to the operationalisation of the NTC. Eskom has indicated previously that it is aiming to operationalise the NTC before the end of 2023 and has indicated that the three licences, along with lender consent and the appointment of a board remained the main outstanding preconditions for the independent functioning of the new grid company, which will initially remain a wholly owned subsidiary of Eskom Holdings. The board appointment has been said to be imminent, while lender consent was expected to follow on from the transfer of the three licences from Eskom to NTC. Speaking alongside Scheppers at a regular weekly Energy Action Plan briefing, the Presidency's Saul Musker underlined the importance of the NTC's unbundling, which would be followed by the vertical separation of the generation and distribution entities. He described having a "meaningfully independent" grid company as critical for levelling the playing field between Eskom and independent power producers (IPPs), as well as to ensure that transmission infrastructure investment was prioritised. "Given the scale of the investment that is required in the transmission network over the next decade, having a transmission company that is able to focus on that roll-out is really crucial." It is anticipated that some R210-billion will have to be invested into some 14 000-km of power lines and more than 122 600 MVA of transformation capacity by 2032. Musker stressed that Nersa had not rejected the other two licence applications, but said the Presidency was nevertheless troubled that the applications had not yet been approved. "We are very concerned about that, because the NTC needs all three licences in order to operate and to fulfil its intended functions. "[Given] the enormous importance of fully operationalising the NTC, our hope is that we would be able to resolve this sooner rather than later and have the remaining two licences in place alongside the other two conditions [lender consent and an independent board], so that there shouldn't be too much of a delay in establishing the entity," Musker added. Meanwhile, Electricity Minister Dr Kgosientsho Ramokgopa also dedicated a large portion of the briefing to the importance of transmission investment to overcoming South Africa's current loadshedding crisis. He also indicated that it was becoming increasingly apparent that the Eskom and fiscal balance sheets were insufficient to ensure grid investment at the "speed and scale" required to address capacity backlogs, particularly in the renewables-rich provinces of the Western, Eastern a...
South Africa's Energy Regulator, the highest decision-making body of the National Energy Regulator of South Africa (Nersa), has approved a 25-year transmission licence for the National Transmission Company South Africa (NTC), which is being unbundled from Eskom. Only a transmission facilities licence was granted during the meeting on July 27, and the regulator indicated that the trading licence and an import/export licence, which had also been applied for by NTC in a bundled application, would be processed separately. Nevertheless, Nersa chairperson Thembani Bukula, who presided over the virtual meeting, stressed that the approval represented a "milestone" for the electricity sector. "This is a milestone decision in the sense that we have always had one Eskom with everything [generation, transmission and distribution] and the fact that we are setting up a transmission company is a milestone on its own," Bukula said. The Energy Regulator approved the licence together with draft licence conditions, which would be shared with the NTC for comment. Fulltime electricity regulator Nhlanhla Gumede, who presented the licence for approval by the Energy Regulator, noted that the licence application had been subjected to a public participation process, including a public hearing, which was held in April. The licence application was in line with the Department of Public Enterprises' 2019 'Roadmap for Eskom in a Reformed Electricity Supply Industry', which envisaged the unbundling of the vertically integrated monopoly into three separate businesses of generation, transmission and distribution. The transmission division had already been functionally separated and was awaiting the appointment of its own independent board. But given the complexities of unbundling the debt-laden State-owned enterprise, the NTC would initially continue to fall under Eskom Holdings, as would be the case with the other two businesses. Besides the licence approvals, Eskom would have to secure lender consent for the separation of the NTC ahead of its operationalisation. The debt attributed to NTC would continue to reside with Eskom Holdings but be reflected in the form of an equivalent inter-company loan. The utility is still aiming for the NTC to come into operation before the end of 2023, but there are some concerns that the deadline may be missed given the number of approvals that are still required. The separation of the NTC from Eskom's generation and distribution divisions has been prioritised in light of the importance of such an entity in levelling the playing field between Eskom generation and independent power producers. Likewise, its establishment is seen as crucial in ensuring that sufficient capital is invested into the grid, which has become a constraint to the connection of new generators. The current Transmission Development Plan indicates that more than 14 000 km of new lines will be needed by 2032, along with 122 600 MVA-worth of transformation capacity. The investment value of the roll-out is currently estimated at R210-billion.
It’s been another turbulent week on the electricity front, with ongoing high levels of loadshedding, the launch of a law suit against Eskom’s grid queuing rules and false and confusing statements about the decommissioning of Komati. Engineering News editor Terence Creamer discusses the week’s developments.
ArcelorMittal South Africa, which slumped to a R448-million loadshedding-induced loss in the interim period to June 30, expects renewable energy and regional infrastructure projects to stimulate a recovery in sales for the remainder of the year but probably without a commensurate price recovery. The JSE-listed company shocked the market on July 20, when it revealed in a trading statement that its earnings were poised to contract dramatically from the comparable period of 2022 when it reported a R3-billion profit, which resulted in its shares falling 40% to R2, before recovering slightly. The poor performance was attributed to intense loadshedding during the period, which CEO Kobus Verster said had disrupted the market and its own operations, with Eskom instructing the group to curtail its demand 41 times during the period, up from only four such episodes for the whole of 2022. More damagingly, however, the group admitted to having underestimated the effect that the intense power cuts would have on curtailing downstream demand, as fabricators pulled back on production shifts leading to a build-up of steel stocks and a fall in demand - all of which took place in an already soft international steel-price environment. Speaking during the release of the group's interim results, Verster forecast a recovery in sales for the remainder of the year, making specific reference to demand emerging from both the renewables sector as well as several steel-intensive infrastructure projects in the rest of Southern Africa. He also revealed that ArcelorMittal South Africa was making preparations to leverage future anticipated renewables growth over the coming ten years, including by using its own 200 MW solar project at Vanderbijlpark to showcase the use of steel in such facilities. The R3-billion project, which will be jointly owned by the South African company and its international parent, is the first of several renewables projects on ArcelorMittal South Africa's radar. This, as it seeks to reduce carbon emissions and shore up clean electricity supply ahead of the introduction of a 1.7-million-ton-a-year electric arc furnace at Vanderbijlpark, which also forms part of its decarbonisation roadmap. Interim CFO Gavin Griffiths reported that the South African group was planning to introduce its parent company's patented high-strength, high corrosion-resistant Magnelis solution, a metallic coating that enables steel to withstand hostile environments such as those to which solar-plant components are exposed. "We have an opportunity to really convert our own solar project into a banner project for steel in South Africa," Griffiths reported. He added that it was also looking to develop downstream partnerships with fabricators able to convert Magnelis into components used in solar farms, such as upper structures, poles and cable trays. The company was already supplying plate into the domestic wind market having worked with various original-equipment manufacturers to ensure that its plate grades were specified. Besides the immediate and emerging renewables opportunities, ArcelorMittal South Africa expected second-half demand to be buoyed by seasonal factors (the third quarter of the calendar year is historically the strongest for steel sales) and a stabilisation of production, which would ensure that product was available in the event of a recovery. "That's the volume story, if not hope, and then obviously price is the uncertain part," Verster said. He also reported that, following much soul searching, it had also concluded that there was a future business case for its troubled Newcastle mill, within a revamped long-products strategy. "We have earmarked areas where we have superior quality and product and we are going to grow these markets. "And, we think that we can secure, in the next three years, a baseload of a million tons of steel, which would be adequate to cover Newcastle's minimum production."
Diversified chemicals group AECI delivered record growth in revenue; earnings before interest, taxes, depreciation and amortisation (Ebitda); and headline earnings per share (HEPS) for the six months ended June 30. The group's revenue increased by 19% year-on-year to R18.4-billion, while Ebitda increased by 18% year-on-year to R1.83-billion. HEPS increased by 5% year-on-year to 603c and earnings a share by 5% to 600c. AECI declared a dividend of 100c a share. "I am pleased with the resilience of the business, which has seen it deliver solid results in the interim period. Performance has been driven by strong volume recovery and market expansion at AECI Mining, as well as AECI Water. "Positive growth was also experienced at AECI Agri Health, where a robust first-quarter performance drove performance," AECI Group CE and executive director Holger Riemensperger said on July 26. He noted that the group's strong performance was achieved against the backdrop of a challenging trading environment. Overall, the operating business segments of the group delivered good growth, but the chemicals business was impacted by the South African macro-environment. Riemensperger told Engineering News & Mining Weekly that the group's mining business - the largest of the group's business segments - was also its best-performing business. "In mining particularly, the growth we are generating comes from outside of South Africa. Our most important and fastest-growing businesses are Australia and Australasia, as well as Central Africa. "Increasing our share of outside South Africa business in our portfolio . . . is one of our important strategic goals," he added. He further pointed out that the AECI Water business continued to gain new customers, many of which were in the mining sector. Owing to this, AECI Mining and AECI Water work closely together to provide a more holistic service to mines, he emphasised. Riemensperger noted that AECI's industrial business in the water segment was also growing. "We have seen lower growth or no growth in the public water business, but we see that picking up now. This is also related to weather conditions. It's a question of rainfall, as more rainfall means that more water treatment is required, so that is the driver. This is not market-related, but rather a weather condition." While the group is making progress in improving its balance sheet strength and the turnaround of the underperforming AECI Schirm Germany business, its focus is on ensuring the delivery of value across the group. To this end, a strategy review is under way. Riemensperger explained to Engineering News & Mining Weekly that the strategy it had in place was developed in 2018, prior to significant global events, such as the Covid-19 pandemic, the global energy crisis and the start of the energy transition, as well as geopolitical events such as Russia's invasion of Ukraine. All of these factors needed to be taken into account for a strategy review, he stressed. "We are still in the relatively earlier stages. What we will do, however, is really look into the portfolio of the businesses we are in. We will look more into what is core and where can we grow, and where our businesses maybe have less opportunities to grow. "These elements we will have at the forefront, but operational excellence will also play an important role. "The group is also reviewing options with respect to its broad-based black economic economic empowerment ownership goals," he said. Riemensperger told Engineering News & Mining Weekly that AECI implemented its employees share trust (EST) in 2012, which vested without value and was wound up. The beneficiaries did benefit from receiving net dividends of R35-million over the prescribed period. "In the spirit of that EST, and also to maintain goodwill, we decided to make an ex-gratia payment totalling R106-million to the beneficiaries. "What we are doing at the moment is working on a new EST scheme as one of the options which we want to ...
South Africa's State-owned Transnet National Ports Authority (TNPA) has shortlisted three consortia to participate in an upcoming bidding process to design, fund and construct a greenfield deep-water port at Boegoebaai in the Northern Cape, as well as rail infrastructure linking the port to mines in the province. Located some 20 km south of Alexander Bay, which is close to the Namibian border, sun-drenched Boegoebaai has also been earmarked as a possible site for the development of a green-hydrogen hub. The Boegoebaai Port & Rail Consortium, the Boegoebaai Development Consortium and the Project Elephant Consortium were named as the three consortia selected following a request for qualification process that was initiated in August last year and which attracted eight respondents. TNPA did not immediately disclose the identities of the companies participating in the qualifying consortia, but revealed that the eight respondents included both local and international companies with engineering, construction, funding and logistics experience. Boegoebaai programme director Magenthran Ruthenavelu indicated that the port and rail infrastructure would provide another export channel for mining commodities such as manganese and a possible outlet for the export of green-hydrogen derivatives such as green ammonia. The Boegoebaai Green Hydrogen Development has been included as a Strategic Integrated Project (SIP) for accelerated development under the country's Infrastructure Development Act, while Sasol is leading a feasibility study to explore the potential of the site as an export hub for green ammonia A request for proposals would now be issued to the qualifying respondents but no timeframe has as yet been provided for bid submission, financial close and construction.
The World Bank's private sector financier, the International Finance Corporation (IFC), has indicated a willingness to fund public-private partnerships (PPPs) aimed at expanding and strengthening South Africa's transmission infrastructure. IFC VP for Africa Sérgio Pimenta tells Engineering News that the private sector already plays a significant role in deploying electricity grids in most developed countries and some emerging markets and that South Africa is well-placed to pilot such PPPs in light of the urgent need to expand the domestic grid, particularly in provinces with potent wind and solar resources. "When you look at how electricity networks or systems have been evolving across the world, generation has been the first area where the private sector has comes in, but in developed markets, transmission is also delivered by private sector companies. "I think South Africa has the conditions to actually pilot this type of initiative in Africa and, if well-structured, such projects would attract private sector financing, including from the IFC," Pimenta said during a visit to South Africa this week. Electricity Minister Dr Kgosientsho Ramokgopa has already warned that South Africa can ill-afford to "kick the can down the road" in the area of grid investment as it did in the early 2000s with generation, which has resulted in daily power cuts. Ramokgopa has also indicated that he sees a potential role for PPPs in delivering much-needed grid infrastructure, probably on a build-operate-and-transfer basis, with State-owned Eskom remaining the sole custodian of the network. The development of transmission infrastructure has also been included for specific support under the $8.5-billion Just Energy Transition Partnership, or JETP, which the World Bank Group is backing. Pimenta says that if there is a requirement for private-sector funding under the JETP, the IFC could play a role, noting that this could take various forms, with support for South Africa's decarbonisation and energy transition having been identified as a top priority. The IFC is also closely monitoring the progress of the reforms being undertaken by the South African government across the rest of the energy sector, as well as in the area of freight logistics. While acknowledging that such reforms are always difficult to implement, Pimenta believes ongoing progress will help materially increase the opportunity for the IFC to fund private companies pursuing fixed investments in South Africa. "If we see an opening in the transmission sector, for instance, that will unlock hundreds of millions, if not billions, of dollars that we could deploy," he says. The IFC expects the pipeline of port and rail financing prospects to grow significantly as Transnet implements concessions and pursues long-term lease agreements. The development financier has invested $4.9-billion in South Africa since 2018, elevating the country to that of a major component in its $13.3-billion Africa portfolio, which spans the financial, manufacturing, agribusiness, services, property and infrastructure sectors. "South Africa is our largest portfolio on the continent and it's our fifth-largest portfolio in the world," Pimenta notes. The IFC will also continue to support mining projects in South Africa, particularly those aligned to producing the critical minerals required for the global energy transition. It will also prioritise support for the development of regional value chains to process those minerals ahead of export. "South Africa is very well positioned to lead this kind of effort, not just with the minerals that are mined in South Africa, but also those that are produced in some other countries in the region."
Around 83% of people stopping at a service station for fuel also shop at the forecourt retail offering, says Trade Intelligence business development and advisory lead Andrea Ellens. Only 4% of customers fill up with fuel only, with 13% there for forecourt shopping only, such as the Spar Express or the Woolworths Foodstop. The retail research company says this highlights the importance of the retail offering at service stations, and the need to move beyond fuel, especially in light of the changes expected in mobility, such as the use of electric vehicles. Forecourt retailing is a R40-billion-a-year industry in South Africa, which gives it a 15% slice of the overall commerce retail market, and 5% of the total fast-moving consumer goods retail market in South Africa. Fuel station visits in South Africa are, on average, 12 minutes long, notes Ellens. The average South Africa visits a forecourt ten times a month. Looking at forecourt store visitors specifically, 52% are female and 48% male; 68% have children in the household; 77% access the Internet daily; and, interestingly enough, only 79% have a car in the household. A number of shoppers are either passengers in cars; they walk; or they use public transport, says Ellens. The number one reason people select a specific forecourt is because of its convenient location (47%); followed by the fact that it is quick and convenient to shop there (44%); excellent customer service (39%); the specific fuel rewards linked to the service station (31%), and the fast-food on offer (27%). The most popular activities at a service station are buying snacks and drinks; drawing cash; using the bathroom and buying fast food. Ellens says there is a trend globally to elevate the shopper experience at service stations into something more upmarket, such as the Engen Café 365 and The Pantry, in Johannesburg. Not only are service stations facing a move to electric mobility, but also increasing competition for their specific shopper segment, as big-name retailers are expanding into new areas with smaller store concepts that rival those seen at forecourts. E-commerce is also another element offering increasing competition. Ellens says the future of convenience retail includes a need to move beyond speed; offering an expanded retail experience; offering a curated product line-up; and focusing on the fresh, original and new.
The South African government has expressed concern that its plans for the addition of new renewables capacity could be disrupted should a legal challenge launched against Eskom's recently announced grid allocation rules prevail and has also indicated that it would favour a settlement instead. G7 Renewable Energies, together with two of its wind farm companies, has launched a two-part application to, firstly, interdict the implementation of Eskom's Interim Grid Capacity Allocation (IGCA) rules, which came into force on June 27, as well as to have the rules reviewed and set aside based on their alleged illegality under the Promotion of Administrative Justice Act. Eskom revised its grid rules following Bid Window Six (BW6) of the public renewables programme, when none of the 23 wind projects vying for a 3 200 MW allocation were able to advance to preferred-bidder status after it emerged that budget quotes for the same grid capacity on which the projects were bid had, instead, been allocated to companies pursuing bilateral contracts with private offtakers. The IGCA framework unveiled on June 27 replaced the previous 'first come, first served' approach with a 'first ready, first served' model, which Eskom said was necessary to ensure that only shovel-ready projects were granted grid capacity in a context of severe grid scarcity in certain regions. The initial industry response was cool, with all the associations describing the new rules as "onerous". Nevertheless, it was indicated that engagements would continue and that further adjustments might be made in future to accommodate the concerns raised by independent power producers. On July 17, however, G7 Renewable Energies launched an application in the Gauteng High Court to interdict the implementation of the IGCA and to have them declared illegal. Speaking during a regular briefing to provide an update on the progress government was making to implement the Energy Action Plan, the Presidency's Rudi Dicks confirmed that government was aware of the legal challenge and stated that "if the interdict is granted, it does create a problem for us". "So, what we need to do, of course, is try and see whether we can find a resolution outside of court," Dicks added. He also noted that, while Eskom and government were aware that concerns had been raised about the rules, there had already been efforts taken to address these issues. "In actual fact, on the 13th of July, we had convened a meeting with industry - with the wind and the photovoltaic associations and Business for South Africa, who are participating in National Energy Crisis Committee (NECOM) structures - to discuss the concerns." He said that the conversations had been "fruitful and constructive" and that Eskom had indicated that it would take the issues raised into consideration so that the rules could be adapted. Electricity Minister Dr Kgosientsho Ramokgopa said that, while he could not intervene in a court process, he was keen to ensure that there was "some degree of harmony" around the grid rules. "I'm convinced that everyone is committed to ensuring that we're able to resolve the energy challenge in the country, and also ensuring that we're able to introduce new sources of generation, especially from renewable energy sources. "So, of course, there's a court process and we will not interfere with that . . . but we'll do everything possible to ensure that we engage with the parties, including G7 themselves, to see how best we can find a resolution that, first, addresses the best interests of the country, but without undermining the financial interest of the players in the renewable energy space," Ramokgopa said. Should such efforts fail, however, there is concern that BW7, which is meant to be launched in September for 5 000 MW, could be delayed. South African Independent Power Producer Association chairperson Brian Day, who had also expressed unease with the rules when they were published, told Engineering News that the court ...
BMW Group South Africa will introduce the electric CE 02 motorbike to the South African market in the second quarter of next year. The CE 02 is neither e-scooter nor e-motorcycle. The German car and bike maker calls it an 'eParkourer for cities and urban areas'. Parkour refers to the athletic discipline of urban gymnastics that make use of elements typically found in cities, such as staircases. BMW says the CE 02 has been created with the city and the urban environment in mind. "Nimble, practical, robust and reduced to the essentials in terms of design. "Large wheels meet the demand for robustness and, at the same time, ensure riding fun on many terrains." The 11 kW CE 02 has a top speed of 95 km/h, and offers a range of more than 90 km before requiring recharging. The bike weighs 132 kg and the seat-height is a low 750 mm. The BMW CE 02 comes with Flow and Surf riding modes as standard. Flow offers the ideal set-up for cruising in urban traffic, while Surf provides a more dynamic riding experience beyond city traffic. The Flash driving mode is optional, and speaks for itself. The CE 02 comes standard with an external charger with a charging power of 0.9 kW, which enables recharging at standard household sockets. A 1.5 kW quick charger offers a quicker turnaround time, but is an optional accessory. In front of the rider, a display informs the rider about riding speed and battery charge status. A USB-C charging socket allows the rider to supply power to a smartphone.
Engineering News editor Terence Creamer discusses the growing concern about another potential outage slip at the Koeberg nuclear power station, as well as what it could mean for loadshedding and the long-term operation of the plant.
Calls are growing for government to overhaul its free basic energy (FBE) scheme amid indications that fewer than a quarter of qualifying indigent households are benefiting from the 50-kWh-a-month currently on offer and with the scale of the grant being described as insufficient to reduce poverty and inequality. Public Affairs Research Institute senior researcher Dr Tracy Ledger argues that, given evidence showing electricity's developmental returns to be as large or larger than any of South Africa's other social welfare interventions, universal access should be elevated to the same level as access to education. "I think we need to start thinking about electricity in the same way that we think about education. "We understand that even though the benefits of education accrue to the individual, overall, the whole of society and the whole of the economy benefits . . . it would be extremely short-sighted of any government to say, 'oh, well, if you're too poor to pay for an education, you can't have one'," Ledger argued during a Presidential Climate Commission dialogue on energy poverty. She also reiterated the call she and co-author Mahlatse Rampedi made in their book Hungry for Electricity for the monthly FBE allocation to be increased to 350 kWh, which they argue to be the minimum threshold at which electricity begins yielding meaningful socioeconomic benefits. "The main reason why grid-connected households cannot access that amount of electricity currently is because of the cost," she explained, indicating that it currently cost a low-income household with a pre-payment metre about R800 to buy R350 kWh. "To put that in context, 55% of South African households have a monthly income of less than R6 000 a month, which means R800 rand a month is nearly 15% of their monthly income." Many poor households are, thus, currently having to choose between electricity and food, which is increasing levels of food insecurity and malnutrition. Compounding matters is the fact that only 25% of indigent households are receiving their FBE allowance, owing to the fact that many municipalities are failing to maintain indigency registers and are using funds specifically provided for FBE under the equitable share elsewhere. The National Treasury's Malijeng Ngqaleni acknowledged the monthly 50 kWh to be inadequate but said increasing the allocation under the current arrangement would not alleviate energy poverty, as its analysis shows that many municipalities are currently diverting the funds away from the intended recipients. A total of R57.6-billion has been set aside for FBE for the current three-year expenditure period to 2025/26, but the National Treasury was concerned that there could be "significant fiscal leakage". Ledger agreed that implementation had to be materially improved before increasing the size of the benefit and also proposed major, albeit controversial, changes to the way the scheme is implemented in future. Eskom, she noted, should be supplying about five-million indigent households, but was supplying only about 800 000 currently, as the utility is reliant on the indigent list being supplied to it by the municipalities. "I think there's a good case to be made for diverting that part of the equitable share that should end up in Eskom anyway, directly to Eskom, and let Eskom register those indigent households." Eskom's Onicah Rantwane reported that the utility was indeed engaging with government on the possibility of ring-fencing the costs allocated for customers in Eskom-supplied areas and having those amounts paid to Eskom directly. However, she argued that there was also an urgent need to restructure the retail tariff to reflect unbundled costs, as changes under way in the electricity sector meant that pro-poor policies, such as the inclining block tariff (IBT), would begin penalising poor consumers over time. "Customers investing in alternative energy sources and energy efficiency are usually relatively affluent. Under the IBT,...
Toyota South Africa Motors (TSAM) has confirmed that it is targeting the introduction of a mild-hybrid Hilux bakkie to the South African market next year. TSAM adds that the hybrid version of South Africa's best-selling vehicle will be produced at its Prospecton plant, in Durban, alongside the rest of the Hilux range. The hybrid Hilux will add to the Corolla Cross hybrid, also assembled at the Durban plant. The new addition will take the domestic automotive industry's hybrid production to five models by the end of 2024 - the Hilux and Corolla Cross mild hybrids, the Mercedes-Benz C-Class plug-in hybrid (PHEV), and the forthcoming Mercedes-Benz C63 AMG PHEV and the BMW X3 PHEV. Toyota in June conducted a demonstration run of the Hilux mild hybrid electric vehicle (MHEV) concept model at Kasarani, Kenya, during the seventh round of the World Rally Championship (WRC). The concept vehicle was driven by four-time WRC champion and former Toyota world-title winner Juha Kankkunen from Finland, with co-driver Jimmi Gathu, local Kenyan media personality and actor. "I'm 100% sure that this type of car will fit in Africa very well because there are still long-distance drives and it's very difficult to charge electric cars," said Kankkunen following the drive. "You can save fuel, which means less carbon dioxide. Africa is a good market for this kind of car...That is the future." Toyota earlier this year announced that it will take a multi-pathway approach to carbon neutrality, presenting various options that are fit-for-purpose to each region, under the policy of 'leaving no one behind'. In light of the often unstable electricity supply in Africa, the Japanese car maker believes that MHEVs are the continent's most viable entry point into the electric vehicle market, as they do not require charging infrastructure, while also making use of existing refuelling infrastructure.
Eskom's system operator GM, Isabel Fick, does not foresee the Western Cape power grid being materially destabilised if both of Koeberg's two nuclear reactors are out of service simultaneously later this year, owing to yet another Unit 1 outage slip. She noted during a webinar that the two Koeberg units had been out of service simultaneously for 48 hours on April 15, without triggering major grid instability in the province, which is also supported by a 765 kV transmission network that transports electricity from the north-east of the country. "There is quite a bit of stability in the Western Cape even without the Koeberg units and mainly due to the 765 kV backbone network that goes into that area. "So, we don't foresee a major issue as a result. You would need an extra contingency, as in the 765 kV line going down, before you will see a major issue there." That said, Fick confirmed that, from a system perspective, she would currently "love any nuclear" she could get but that adding new nuclear would be a decision for the policymaker rather than Eskom. Her assurances regarding the loss of Koeberg generation followed confirmation by Electricity Minister Dr Kgosientsho Ramokgopa that there was a possibility that Unit 1, on an extended outage linked to a 20-year life extension plan that has been under way since December, might not be returned to service before Unit 2 was taken down for a similar outage, which would also include the replacement of its three steam generators. The Unit 1 outage, which has been delayed several times, finally began on December 10 and was initially scheduled to continue for about 180 days and return to service in June. By March, however, Eskom confirmed that the initially communicated return to service date was no longer achievable, but indicated that it would be reintroduced before Unit 2 was shut in September for a similar outage. It is understood that Unit 1 may now be returned only in October, by when the Unit 2 outage will be under way leaving the loadshedding-prone South African grid without generation from either of the 920-MW-a-piece units. "I've asked for a more detailed report, and the more we get an indication of what the issues are, the more we are getting very, very, very worried. It is something that requires urgent attention," Ramokgopa said on June 17 ahead of a meeting with the Koeberg leadership. Meanwhile, the Council for Scientific and Industrial Research (CSIR) Energy Centre's Monique le Roux confirmed that modelling had been conducted to assess whether the Western Cape grid could operate stably in the absence of Koeberg. "I can confirm that the system is able to runs stably as it is now . without Koeberg. "Obviously, Koeberg does provide a lot of stability to the Western Cape grid and that stability could be affected by a higher penetration of variable renewable energy in future, but there are mitigation strategies that can be put in place," Le Roux said. She reported that the CSIR was working with Eskom to understand the possible system risks of transitioning from conventional plants, such as coal and nuclear, to variable generators, such wind and solar photovoltaic. The research has confirmed that the displacement of conventional generators with renewable generators will lead to the erosion of system inertial energy, which slows the rate at which system frequency changes in the event of a grid disturbance. The model has been stressed tested using various mitigation measures that would have to be introduced to address inertia erosion as conventional synchronous generations are progressively replaced with inverter-based renewables. Possible solutions identified include the conversion of retiring generator units to synchronous condensers, as is being proposed at the decommissioned Komati site, as well as introducing fast-frequency response through battery storage systems. However, Le Roux reported that various other options were also being assessed for increasing instantaneous re...
The Maltento insect farm started as a small, test-scale operation in a home bathroom in Craighall Park, Johannesburg. Almost seven years later, founder and CEO Dean Smorenburg has seen the operation evolve into a fully-fledged business based in Epping, Cape Town. Smorenburg says his decision to pivot from management consulting to insect farming stems from his interest in sustainability. Insect farming, and to be more specific, fly farming, is no longer new or novel, with this biotech sector rapidly gaining traction globally. Smorenburg's take on the industry is to not call Maltento a waste management company, as some fly farmers tend to do. This means he doesn't want to use the legions of black soldier flies (BSFs) at Maltento to feed on unwanted waste, such as abattoir leftovers. Instead, his goal is to create a consistently high-quality product, which means Maltento's livestock must have a consistently high-quality diet. "We have a PhD looking after the diet of the insects to make sure we produce good-quality products throughout," says Smorenburg. This philosophy sees Maltento's livestock flourish on a diet which includes spent grains from breweries, as well as ground-up rusks. Larvae are typically harvested at day 11 or 12. The Epping facility - which started out at 1 600 m2 and has since expanded to 5 500 m2 - produces whole dried fly larvae for the backyard chicken and wild-bird markets, mainly in the US. It also produces a product called Digest or Palate+ from dehydrated larvae, which is a high-protein flavourant or palatant used to coat dry pet kibble to enhance the overall feed experience. "In taste tests, dogs choose our product over other products," says Smorenburg. "Of course, we also have to make sure that their human owners like the smell." Digest is sold mainly in South Africa, but trials are ongoing in the US and Europe to expand Maltento's market. A second focus for the company is the aquaculture market, with trials currently on the go in various African markets, as well as the US. Here the Digest product is added to fish feed, especially on trout farms. "With a 3% inclusion of our product we have seen the fish gain weight, while there is also a drop in the mortality rate," says Smorenburg. "Aquaculture is definitely a big opportunity for us going forward." Another opportunity on the horizon is the production of chitosan, although this may take longer to develop. Chitosan is a sugar that comes from the outer skeleton of shellfish, including crab, lobster and shrimp - as well as fly larvae. It's used in a number of industries, from the pharmaceutical sector to cosmetic production. Here, Maltento will target the cosmetics industry first, says Smorenburg. "Our long-term view is to unlock the BSF's value in its totality." In order to accommodate Maltento's plans, the Epping facility will have to expand yet again, this time to around to 7 000 m2. The urban farm has two arms - the production of sellable product, as well as the breeding of new livestock. Maltento currently rolls out 75 t of product a month, and aims to double that to 150 t a month next year. "We are currently in the early commercialisation phase," notes Smorenburg. "Ultimately, we want to have multiple plants, near large feed sources, which will reduce our carbon footprint and our input costs." This could mean an expansion to Gauteng, for example, as well as the rest of Africa. Maltento employs 65 people.
The government-default component of the government guarantees extended to the independent power producers (IPPs) that will be selected to build new solar and wind projects under the upcoming seventh bid window (BW7) of South Africa's programme for the procurement of renewable energy will be reduced from 100% to 80%. IPP Office head Bernard Magoro tells Engineering News that the reduction follows a National Treasury review of the Government Support Framework Agreement, as well as consultations with the market over the past year. He also stresses that the liquidity protection aspect remains intact; a component put in place at the start of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) to guarantee payments to IPPs should Eskom, the single buyer of electricity arising from the scheme, be unable to honour its obligations. Given Eskom's precarious financial position, the guarantee framework has proved important for attracting bidders to the REIPPPP. However, it has also increased the level of contingent liabilities held by the National Treasury, which indicated in the 2022 Budget Review that it would assess a reduction or elimination of the guarantee, even though IPP contingent liabilities represented a low risk to the fiscus. Magoro reports that the change is likely to be the main new adjustment to the procurement architecture when BW7 is launched in September but argues that it should not come as a surprise to prospective bidders and should, thus, also not lessen market appetite. That said, there is no time to issue a request for information to test the market ahead of the launch of the round, as well as to assess whether the pipeline of shovel-ready projects is sufficient. The Department of Mineral Resources and Energy has indicated that the next two REIPPPP procurement rounds will have allocations of 5 000 MW apiece, with BW8 expected to be launched in March next year. GRID SCARCITY Magoro tells Engineering News that the risks around grid access are likely to remain a far larger issue for potential bidders than the reduction of the guarantee but also insists that significant progress has been made over the past few months to seek a solution to some of the grid problems that materialised during BW6. During that round, none of the 23 wind projects that competed for a 3 200 MW wind allocation advanced to the preferred-bidder stage, partly owing to the grid capacity in the Western, Eastern and Northern Cape provinces on which the projects depended having been absorbed by developers of private projects. At this stage, it remains unclear how many of those private projects have concluded power purchase agreements, but market intelligence suggests it may be below 500 MW and it does not appear that any have entered construction. At the time, Eskom had no grid queuing rules and REIPPPP bidders were disallowed, under the rules of the programme, from obtaining firm grid connection budget quotes until they were named as preferred bidders. No such restrictions applied to developers of projects seeking to take advantage of a change to the regulations allowing distributed projects of any size to proceed without a licence, including those that planned to wheel electricity through the grid. Eskom has since announced a shift from a 'first come, first served' model to a 'first ready, first served' approach and Magoro reports that the IPP Office has been having weekly meetings with Eskom since BW6 to ensure that there is no repeat of that disappointment during subsequent rounds. Nevertheless, grid scarcity is likely to be a key feature for some time yet and Eskom's upcoming Generation Connection Capacity Assessment (GCCA) will be closely analysed, as it will indicate where grid capacity remains available for both the public procurement programme and private projects, where the pipeline has expanded to about 10 000 MW. Magoro indicates that it is unlikely that the BW7 and BW8 request for proposals (RFP) documentat...
State-owned Transnet has selected International Container Terminal Services Incorporated (ICTSI), of the Philippines, as the preferred bidder for the 25-year joint venture with Transnet Port Terminals (TPT) to develop and upgrade its flagship Durban Container Terminal (DCT) Pier 2. DCT Pier 2 is Transnet's biggest container terminal, handling 72% of the Port of Durban's throughput and 46% of South Africa's port traffic. ICTSI, which beat six other shortlisted Pier 2 bidders, is regarded as the world's largest independent terminal operator, with 34 terminal operations in 20 countries, including four in Africa, across six continents. Transnet, which initiated a private sector participation process for DCT Pier 2 and the Ngqura Container Terminal (NCT) in 2021 amid ongoing operational difficulties, believes the partnership with ICTSI will help improve the terminal's performance and reposition DCT for growth. Private sector participation at the two terminals has been identified as a key reform under government's Operation Vulindlela for raising port efficiencies at the terminals, which are both operating well below their nameplate capacities. DCT Pier 2 has a current container capacity of two-million twenty-foot equivalent units (TEUs) and there is an intention, through the partnership, to increase its capacity to 2.8-million TEUs, including through the berth deepening of the North Quay at Pier 2. Transnet National Ports Authority (TNPA) has announced that it intends increasing the current container capacity in the Port of Durban from 3.3-million TEUs to an eventual envisaged capacity of 11.4-million TEUs. Transnet CEO Portia Derby described the partnership as a catalyst for repositioning the Port of Durban as a container hub port and for boosting the operational performance of TPT's ports. "The partnership in Pier 2 is a major step forward for our programme to bring in global expertise to improve efficiencies at our terminals, and bodes well for our ongoing plans to crowd in the private sector in areas identified for growth," Derby said in a statement. The announcement of the transaction follows approvals from government in terms of the Public Finance Management Act and includes a condition that all DCT Pier 2 employees be seconded to the new entity, in which Transnet will hold a majority ownership of 50% plus one share. "There will be no retrenchments, and employees will retain the same terms and conditions before and after the introduction of the private sector partner," Transnet said in a statement. The new company is also required to achieve a minimum Level 4 broad-based black economic empowerment status. Transnet also confirmed that the 25-year term will be extended to a maximum of 30 years in the event that berth deepening of the North Quay at Pier 2 is delayed, and the terminal operating licence and lease will be subcontracted to the new company. Non-current assets will be transferred into the new company, together with customer and supplier contracts. Transnet said it would now proceed to work with ICTSI to implement the transaction, adding that a way forward on the NCT process would be outlined in due course.
Electricity Minister Dr Kgosientsho Ramokgopa has expressed deep concern that another delay to the return to service of Koeberg Unit 1 could result in both of the nuclear power station's units being out of service simultaneously later this year. The unit is currently undergoing a long-duration outage that includes the replacement of its three steam generators, which is one of the preconditions for extending the plant's life for 20 years. Speaking during his weekly update on the implementation of the Energy Action Plan, which followed a recent period of intense Stage 6 loadshedding, the Minister revealed that he was growing increasingly concerned that there could be an outage "overlap", which would result in a period where there would be no production from Koeberg. "That would represent a net loss of 920 MW from where we are currently [with Unit 1 being out of service]. That's a huge dent on our generating capacity." Ramokgopa indicated he had planned to meet with the leadership of Koeberg last week for a report on the outage, but he had been unable to do so and that the meeting would take place this week instead. The Unit 1 outage began on December 10 and was initially scheduled to continue for about 180 days and returned to service in June. In March, however, the State-owned utility confirmed that the early June return to service date was "no longer achievable", but that it would be reintroduced before Unit 2 was shut in September for a similar outage. This, after a previous attempt to replace the Unit 2 steam generators was postponed when it emerged that Eskom's storage facilities had not been completed in time. It is understood that Unit 1 may now only be returned in October, but this has not yet been confirmed by Eskom despite several Engineering News enquiries in recent days. Eskom indicated to Engineering News last week that it was planning to issue a formal statement on developments at Koeberg, but no statement had yet been released by the time Ramokgopa held his briefing. Eskom did confirm, however, that all three Unit 1 steam generators had been successfully replaced and welding in these generators had commenced. "We would also like to assure the public that it is our commitment to ensure that we prioritise safe working standards on this project," the utility added in a written response to questions posed. No answers were provided regarding the effect of the outage slips on Eskom's efforts to secure a Long-Term Operation (LTO) licence. Unit 1's 40-year licence expires on July 21, 2024, and it is currently uncertain whether Eskom has received confirmation of a separate licence validity date for Unit 2, to reflect the fact that the unit came into operation a year-and-a-half after Unit 1 in November 1985. Securing the licence change request for Unit 2 has been identified as a key priority and risk for the operation of Koeberg for a further 20 years.
Mercedes-Benz South Africa (MBSA) has unveiled the second of its local dealerships to have adopted the German car maker's new 'luxury' retail brand appearance, launched globally in 2018, and in South Africa in 2019. This first dealership to carry the identity was in Sandton. However, the domestic roll-out of the new identity was halted by Covid-19, but has now again gained momentum. The Mercedes-Benz Constantiaberg dealership in Cape Town is owned by Super Group, which has invested R40-million in the facility. The central theme for the new-look dealerships is the feeling of luxury in every consumer interaction and/or every touch point. It also merges the physical and online channels to create more convenience, such as through the digitalisation of the entire customer journey when engaging with the dealership. In addition, the Constantiaberg facility fully caters for the shift towards electric mobility, both in equipment specifications and staff training. "With the ever-changing consumer landscape, future-proofing our operations to meet the needs of our customers is crucial," says MBSA co-CEO and Mercedes-Benz Cars executive director Mark Raine. "As a luxury brand, modernising our retail operations is about focusing on our customers' growing needs, with the goal to create a fascinating brand experience at every touch point. "This dealership serves as a testament to our vision for the future of luxury where convenience, personalised services and unforgettable experience converge." Construction work of Mercedes-Benz Constantiaberg dealership started in September last year and was completed in June. The facility occupies an area of around 7 400 m², and forms part of the Blue Route Mall property. The building structure has been designed to accommodate the future installation of solar energy. "Our relocation from Claremont to Tokai is a strategic move to further strengthen existing relationships and build new ones," says Super Group Dealerships CEO Graeme Watson. He says the next step for the group in its relationship with MBSA is to roll out a premium outlet at the V&A Waterfront in the fourth quarter of this year.
Terence Creamer speaks on: Loadshedding worsens, govt mulls concessions at coal-fired power stations
Eskom's generation business is currently weighing various concession models as the utility assesses ways to improve the performance of its breakdown-prone coal-fired power stations in a context of ongoing financial constraints, as well as restrictions on the raising of new debt. Eskom Generation engineering GM Thomas Conradie confirmed during an EE Business Intelligence webinar on Thursday that the options ranged from the concessioning of entire plants to private operators, to the concessioning of ringfenced functions within power stations. He revealed that Eskom had, for some time, been weighing a concession model for the Hendrina power station, in Mpumalanga. He indicated, however, that the utility was increasingly leaning towards a model whereby ringfenced plant areas were either concessioned, or long-term partnerships were concluded with private entities for the operation and maintenance of specific plant components or technologies within power stations. In February, the National Treasury announced that, as part of a R254-billion debt relief package extended to Eskom, a consortium led by vgbe energy had been appointed to assess the condition of the utility's coal fleet and to make recommendations on whether some of the power stations should be concessioned to private operators. The assessment is expected to be concluded in July. However, special adviser to the Minister of Electricity Silas Zimu expressed scepticism about the value of concessions at Eskom, and indicated a preference for allowing the private sector to participate in the repowering of those stations that are scheduled for decommissioning rather than taking over the operations and maintenance of assets that would remain generating for many more years. "All these power stations that have been built where Eskom has been a contract manager, original equipment manufacturers (OEMs) have been suppliers and engineering, procurement and construction [service providers] and, in some instances, they would have operated and maintained the plants for some time until the handover. "So private participation has always been there [and] maybe that's the model we have to go back to," Zimu said during the webinar. Babcock Ntuthuko Engineering CEO Thava Govender argued that there could be both benefits and potential drawbacks in pursuing a concession solution, but stressed that Eskom definitely needed support from OEMs to improve the performance of a fleet that had become unreliable as a result of insufficient maintenance. "Eskom needs all the help they can get, and I think we do need to get all the executives of the OEMs together with Eskom, because as a collective I'm sure we can address this crisis of loadshedding and its cascading effect on the economy," Govender said. Likewise, ACTOM John Thompson engineering manager Ewert Snyman noted that while his company was already operating and maintaining boilers for other clients, such systems remained core to Eskom, which had developed skills and expertise over many years of operation. "I think the focus should be on improving performance by including more of the boiler auxiliary equipment in contracts with OEMs so that the key performance indicators can be linked to the performance of the plant. "Because you cannot ask an OEM to guarantee the performance of the boiler if the company is only maintaining the pressure parts and some of the ancillaries are not included in the contract," Snyman argued. Siemens Energy Southern Africa MD Thabo Molekoa added that there was also a growing opportunity for Eskom to improve plant performance by drawing on the expertise that OEMs had in integrating modern diagnostic and engineering services. "We are talking about a 24/7 operation that needs agility in response to day-to-day and hour-to-hour problems. "The minute you start becoming a lot more agile, you then are able to mobilise the right skill sets and expertise and you are able to respond quicker while adhering to quality and best practice...
Petrochemicals and energy company Sasol has advised that it will appeal the National Air Quality Officer's decision to decline its June 2022 application in terms of Clause 12A of the minimum emission standards (MES). The application related to the regulation of the sulphur dioxide (SO2) emissions from the boilers at Sasol's Secunda Operations' steam plants on alternative emission load basis from April 1, 2025, onwards. Sasol's emission sources are regulated in accordance with atmospheric emission licences, which are based on the MES of November 2013, which are published as a section of the National Environmental Management: Air Quality Act (Nemaqa). Sasol confirms it will appeal the decision to the Minister of Forestry, Fisheries and the Environment, to allow the Minister to consider the application afresh. Clause 12A of the MES permits existing plants to be regulated on an alternative emission load, as opposed to the current concentrated-based limit specified in the MES, which is according to the mass of pollutant per cubic metre of air emitted. Sasol has been implementing various projects at its Secunda, Sasolburg and Natref operations since 2015 in efforts to reduce emissions to comply with the MES. The company has spent more than R7-billion over the last five years, in particular, on emission reduction projects. Sasol explains that it has achieved MES compliance of 98% of its emission sources at these sites; however, the remaining 2% of sources are part of the company's ongoing journey to enable MES compliance by April 1, 2025. The only remaining challenge relates to achieving the concentration-based limit for SO2 emissions from the boilers at the Secunda Operations' steam plants. Sasol has determined that an integrated emission reduction roadmap, which intends to deliver emissions reductions in terms of both greenhouse-gas emissions, SO2 and other pollutants, is the optimal approach and best aligned with the objectives of Nemaqa and the purpose of the MES. This involves the turning down of boilers, reducing coal use and ramping up Sasol's imports of renewable energy to 1 200 MW by 2030. Sasol has already seen a reduction in emissions through the implementation of energy efficiency projects and is progressing the deployment of more than half of the committed renewable energy target from 2025 onwards. The company outlines in its Climate Change Report 2022 that among its efforts will also be to undertake boiler turndown, in efforts to reduce some of its emissions at Secunda. Sasol remains committed to ambient air quality improvement, it says, including reaching net-zero emissions by 2050. OPPOSING VIEW Nonprofit organisation Just Share in December last year said Sasol's Secunda facility, as well as the Natref refinery - a joint venture between Sasol and TotalEnergies - are among the most pollutive operations in Mpumalanga and the country. The area in which the operations are located, the Highveld Priority Area, is one of the worst air pollution hotspots globally. Nema designated the area as such, owing to its dangerous levels of air pollution. The High Court in March 2022 recognised that the poor air quality in the areas was a breach of residents' constitutional right to an environment that is not harmful to their health, and suggested that the Minister have regard to various considerations, including the need to address the postponement and suspension of compliance with MES in the priority area. The court also recommended that the atmospheric emission licences of all facilities have not obtained once-off suspension of compliance and cannot meet new plant MES by April 2025 are withdrawn and decommissioning and rehabilitation of those facilitates then needs to be enforced. Just Share believes Sasol, despite its participation in the process of setting the MES, has fought vigorously to avoid having to comply with these laws, including through an initial application to be completely exempt from the MES and subsequent complian...
US International Development Finance Corporation (DFC) CEO Scott Nathan has reiterated the American government's interest in helping to finance the Lobito rail corridor, linking the copper and cobalt mining regions of the Democratic Republic of Congo (DRC) and Zambia to Angola's Lobito port. Nathan, who is heading the US Delegation to the US-Africa Business Summit in Botswana this week, made specific reference to the corridor during a virtual media briefing hosted on the sidelines of the summit. Responding to a question related to what progress had been made since the signing, in December, of a memorandum of understanding (MoU) signalling America's support for the joint development by DRC and Zambia of a battery metals supply chain, Nathan made a direct link between the MoU and the Lobito corridor. "One notable project announced by President [Joe] Biden at the most recent G7 meeting in Japan is DFC's interest in supporting the development of a railway in the Lobito corridor, which will connect the Copperbelt in DRC and Zambia, through Angola, to global markets." It was confirmed in May that the DFC was conducting a due diligence for a potential financing package of $250-million for the open-access Lobito Atlantic Railway Corridor, which would be its first investment in rail on the continent. On July 4, a 30-year concession for the Lobito Corridor - comprising a 1 300-km Angola leg to the DRC border and a further 400-km link to the copper-rich Kolwezi region of the DRC - to the private Lobito Atlantic Railway, was announced. The company is a joint venture comprising Trafigura, Mota-Engil and Vecturis. Overall, the consortium plans to invest $455-million in Angola and up to $100-million in the DRC and is studying an additional investment to extend the line further into Zambia. Nathan argued that such infrastructure was crucial for the development of critical minerals that "are incredibly important for the development of the 21st Century economy and for the energy transition". He also expressed support for value addition within the DRC and Zambia, adding that no country should monopolise the processing of these materials. "It's important to diversify supply chains globally, and adding local value is key to that." His statement came a day after the publication of the International Energy Agency's inaugural 'Critical Minerals Market Review', which confirms that there has been a significant rise in exploration and mine development investment for critical minerals, including cobalt and copper. However, the report warned that there had been little progress in diversifying both mine supply and processing, with China dominating the processing of cobalt, lithium, graphite and rare earths.
Atlantis Foundries (AF) has signed a long-term power purchase agreement (PPA) with integrated energy solutions company Energy Partners (EP). According to the agreement, EP will engineer, finance, construct and operate the ground-mounted solar-energy system at AF’s production plant, comprising more than 20 000 solar panels and boasting a total rated capacity of 13.5 MWp. It will be the Western Cape’s largest embedded generation solar project. EP CEO Manie de Waal says the PPA, set to kick off on May 1 next year, will provide AF with “a reliable electricity source at a substantially reduced cost over the next 20 years”. It will also align AF with growing environmental awareness in the automotive industry. “Opting for renewable energy is a significant step, and the system that we designed for AF is expected to save more than 22 000 t of carbon dioxide emissions annually - likely the highest reduction achieved in the South African automobile industry,” says De Waal. “In financial terms, the system will generate electricity worth more than R35-million per year at current average Eskom tariffs.” The system, which has been engineered to align with AF’s electrical consumption profile, is estimated to replace up to 20% of its yearly electricity consumption. It will be integrated into AF’s electrical network, which is connected to the City of Cape Town grid. Excess energy generated by the plant will be fed into the city’s network through the feed-in programme, contributing to Cape Town’s overall renewable energy capacity. “With this renewable energy generation project, we are setting new standards in the South African automotive industry and alleviating pressure on our constrained national grid,” says AF CEO Pieter du Plessis. “It is a result of extensive cooperation between the AF and EP teams, in conjunction with the Western Cape government and City of Cape Town.” The project sets the stage for future embedded generation systems exceeding 1 MW within Cape Town and the rest of the Western Cape. Atlantis Foundries produces automotive castings for the commercial vehicle industry.
Armed gangs this weekend created havoc on the N3 and N4 highways by settings several trucks alight. The first attack occurred on Saturday night on the N3 highway at Van Reenen’s Pass, when armed attackers forced six trucks to a halt, setting them alight. Five trucks were then set alight on Sunday night on the N4 at Emgwenya, in Mpumalanga. Armed attackers again forced the drivers out of the vehicles before setting them alight. Both the N3 and N4 are busy freight corridors operated by toll concessionaires. The South African Police Service says that these types of incidents have, in the past, been associated with attacks on foreign truck drivers. Now, however, it appears as if competition among truck operators may also be a factor. The Road Freight Association (RFA) says it regards the attacks as a “coordinated attack on the road-freight sector”. The road freight sector - trucks - carries 80% of the goods that are moved in and around South Africa. RFA CEO Gavin Kelly says these “ruthless” attacks on the road-freight supply chain will have far-reaching effects. While immediate short-term losses will run into millions of rands - including the costs of the vehicles, cargo and personal effects, repairing the road damage and deploying first responders, with additional costs in terms of freight delays and shipping penalties - the long-term impact will be seen in increased security costs, insurance premiums and toll fees, as well as a reduction in freight movement through South Africa and, ultimately, the closure of freight companies, which will lead to substantial job losses in the logistics sector. “Who is behind this attack, and why?” asks Kelly. “There was no looting of vehicles, and, thankfully, none of the drivers or staff on the vehicles were injured or killed. “The targeted precision of the attack is worrying. This was well planned and efficiently implemented. “At this point, no group has acknowledged that they are responsible.”
Eskom reports that concessional funding of $497-million secured for the repowering and repurposing of the Komati coal power station, in Mpumalanga, is expected to become effective at the end of July. The final unit of Komati, which entered into commercial operation in 1961, was shut on October 31 last year and the site has since emerged as the flagship location for Eskom’s Just Energy Transition (JET) strategy. A funding agreement for Komati’s repowering and repurposing was signed in February and includes a blend of finance that includes a $439.5-million loan from the World Bank, a $47.5-million loan from the Canada Clean Energy and Forest Climate Facility and a $10-million grant from the Energy Sector Management Assistance Program. During a Presidential Climate Commission stakeholder meeting at the Komati site on July 7, Public Enterprises Minister Pravin Gordhan argued that Komati was where the “tyre hit the road” when it came to implementing the JET strategy. Gordhan added that it would also provide lessons for its implementation at other stations approaching retirement, including Camden, Hendrina and Grootvlei. However, he indicated that their retirement dates might have to be delayed in light of South Africa’s ongoing loadshedding crisis. Eskom reported that the funding would be used to implement an initial 100 MW solar photovoltaic project, a 150 MW battery energy storage deployment and a 70 MW wind project to repower the site. In addition, funds will be employed to support various repurposing projects, such as agrivoltaics and aquaponics schemes, the development of a microgrid assembly line and various training programmes, including technical training for solar and wind installers to be delivered in partnership with the South African Renewable Energy Technology Centre. The utility has received a Section 34 Ministerial notice approving the development of the solar and battery projects and the National Energy Regulator of South Africa has also provided its concurrence. An owner’s engineer will be appointed in August to support the development and execution of the repowering projects and Eskom expects to approach the market for the construction of the solar and battery projects in the second quarter of 2024. Engineering, procurement and construction contractors are expected to be appointed later in the year and construction completed in 2026. Site-specific wind resource testing is also currently under way and Eskom expects to launch an initial 50 MW wind tender in the third quarter of 2024 for commercial operation in 2027. Engineering and design is also under way for the construction of three synchronous condensers on the site to offer grid stabilisation services and to help with voltage control. A contractor for the project is also currently scheduled to be appointed later this year and the project implemented in 2025 and 2026. By 2030, Eskom expects the Komati site to have renewables generation capacity of 370 MW and to have developed a pipeline of further repowering and repurposing opportunities. By that same date, Eskom expects to have generated 660 net direct full-time jobs in and around Komati, as well as 8 700 temporary jobs. In addition, it is planning for the facility to be training 200 people yearly, while also producing containerised microgrids for use in far-flung areas of South Africa and the rest of Africa. Eskom told stakeholders that a key lesson to have emerged already related to the need to initiate JET projects well before coal decommissioning so as to limit the disruption that such shutdowns caused to local economies and communities.
Engineering News editor Terence Creamer talks about the link between metals and minerals and the energy transition; concerns about security of supply; and the emerging opportunities for South Africa and Africa.
A new report published by the International Institute for Sustainable Development (IISD) highlights that grid storage has yet to gain “direction or momentum” in South Africa, despite a growing recognition of the role that both utility scale battery energy storage systems (BESS) and other storage technologies can play in providing electricity services besides that of complementing renewables. Titled ‘Watts in Store’, the report distinguishes between grid or front-of-the-meter storage and consumer storage, with behind-the-meter energy storage having expanded significantly as firms and households have sought to protect themselves from intensifying loadshedding. Industry estimates quoted in the report indicate that, by 2022, yearly residential storage deployments alone had jumped to about 2 GWh. By contrast, the deployment of grid storage, including BESS and new pumped hydro schemes, has been slow and is even lagging the roll-out tempo envisaged in the Integrated Resource Plan of 2019. “While BESS is included as required new capacity in national energy plans, South Africa does not have a national energy storage strategy or roadmap, nor does it appear that one is being developed,” IISD’s Richard Halsey states. He notes that the Tubatse pumped hydro scheme has been on hold for over a decade, while the first 513 MW of energy storage in the IRP 2019 was meant to come online in 2022, but the tender was only published in March 2023. The Department of Mineral Resources and Energy also announced recently that the bid submission date for the tender had been postponed from July 7 to August 2 to accommodate delays relating to securing grid connection letters from Eskom. The first phase of Eskom’s BESS roll-out had also been extended by six months past the June 2023 deadline, while several of the renewables-battery projects associated with the much-delayed risk mitigation procurement programme of 2020 had not yet reached financial close. “Grid storage is certainly not a silver bullet for the electricity crisis nor a stand-alone solution for loadshedding. “However, as it can assist on multiple fronts, it is surprising that grid storage has received relatively little attention in mainstream discussions on combatting the electricity crisis in South Africa,” the report states. Halsey says the report, which is to be followed by a second document that will focus on how best to deploy grid storage, also helps to show the “multiple ways energy storage can benefit the power system in South Africa”. “Narratives that focus only on the role of energy storage to address the variability of renewable energy undermine the overall value energy storage can add to the power system. “Furthermore, because South Africa still has a low penetration of renewable energy, such narratives could lead to the interpretation that energy storage is not a priority now.” City Power’s Paul Vermeulen amplifies this point, arguing that the business case for the roll-out of BESS at a municipal level is already strong and will continue to improve as costs fall in future. He notes that at several of City Power’s 40 intake points in Johannesburg, the stations are operating close to their notified maximum demand limits, the breaching of which involves severe penalties from Eskom. By installing an energy storage system at some of these sites, City Power could avoid any penalty costs from Eskom and also reduce peak energy purchases from the utility. “So, the business case is not focused on one item anymore,” Vermeulen explains. He adds that the business case will be further amplified by the fact that all municipalities are being transitioned to time-of-use tariffs and batteries could, thus, be used to help shift loads and take advantage of arbitrage opportunities. City Power would be keen to pursue BESS, but faces serious capital constraints currently, partly because much of its capital budget is being directed towards restoring and modernising legacy systems that have not been well ...
A new and updated edition of the loadshedding code of practice, which includes up to 16 stages of loadshedding, has been finalised by an expert group and delivered to the National Energy Regulator of South Africa (Nersa) for approval. The current NRS 048-9 edition, known as Edition 2, has protocols governing up to eight stages of loadshedding, which would involve rotational cuts of up to 16 hours in a 32-hour cycle. Edition 3 has increased the number of stages to 16, with the highest stage involving 24 hours of loadshedding in a 32-hour cycle. To date, Eskom has not breached Stage 6, which has been implemented on several occasions over the past two years as the utility has struggled to balance supply and demand largely because its undermaintained coal fleet has become unreliable and unpredictable. The new NRS 048-9 edition has been drafted and adopted by the National Rationalised Specifications Association of South Africa, or the NRS Association, a voluntary forum that includes representatives from Eskom, the country’s eight metros, municipalities, the South African Bureau of Standards and Nersa. The document itself has not been shared with the public but is expected to be released by Nersa when it conducts a public consultation process on the proposed new code of practice. NRS Association chairperson Vally Padayachee insists that the new edition should not be viewed as an indication that Stage 16 loadshedding is inevitable. Rather, the updated protocols are designed to improve the state of readiness among the 750 or so individuals responsible for grid stability across the national and municipal system to take the action needed to prevent a national blackout. Padayachee reports that the main rationale for increasing the number of stages is to mitigate the potential for human error that could arise from the fact that once Stage 8 is breached under the current protocols, system operators rely on “contingency measures” rather than a clearly defined code of practice. “Even though Eskom’s performance this winter has been better than expected, there is still potential for loadshedding of up to Stage 8 or beyond should demand climb significantly due to cold weather,” he says, noting the coldest periods historically are during the third week of July and the first week of August. Ahead of winter, Eskom warned that Stage 8 loadshedding was a possibility. However, lower-than-expected demand and an improved performance from some coal stations have enabled the utility to reduce the intensity of loadshedding in recent weeks. Electricity Minister Dr Kgosientsho Ramokgopa has highlighted, in particular, an improving breakdown trend across the coal fleet, which has fallen to within touching distance of the 15 000 MW target set by Eskom as one where both loadshedding and the use of diesel could be reduced to more tolerable levels. Demand, however, has been noticeably lower than initially forecast, with daily peaks of about 30 000 MW, instead of the 34 000 MW-plus peaks forecast ahead of winter. That said, Padayachee believes the new loadshedding code of practice will further bolster resilience as it outlines “mechanically” what system operators, who have been operating under extreme conditions, need to do to ensure that there is no total grid collapse.
JSE-listed engineering and construction group Murray & Roberts (M&R) has failed in its initial bid to regain control of RUC Cementation Mining Contractors (RUC), which was lost to the group when its Australian holding company entered administration in December, together with Clough. M&R told shareholders on Tuesday that it had received notice from the administrators on July 3 that certain conditions precedent related to a Deed of Company Arrangement (DOCA) proposal term sheet prepared as part of an effort to regain control of RUC had not been satisfied and had, thus, been terminated. Group investor and media executive Ed Jardim told Engineering News that M&R would continue to explore a way forward to regain control of RUC. “We just won’t be in an exclusive process through the DOCA anymore.” Jardim confirmed that a receiver had been appointed to run RUC in the interim and RUC could either be sold or the creditors might decide to take over the running of the business. M&R also recently established Cementation APAC as a possible alternative vehicle to provide engineering and contracting services to mining clients in the Asia Pacific region, but had viewed regaining control of RUC as its preferred option. Cementation APAC is based in Perth and is overseen by the group’s mining platform CEO, Mike da Costa. “The Cementation brand is well known in the global mining space and the group will continue to target Australian mining opportunities in joint venture with our businesses in North America, Cementation Americas, and Murray & Roberts Cementation in sub-Saharan Africa,” Jardim said. RUC previously contributed about one-third to M&R’s mining platform and its loss meant that the group’s mining platform currently comprised two regional businesses in Africa and the Americas. The remaining mining platform had combined orders worth R14-billion at the end of December. With the loss of Clough, the mining platform formed the core of the downscaled M&R, which had also retained a unit in sub-Saharan Africa, which is focusing on power, industrial and water projects. M&R’s shares fell 6% to 93 cents a share immediately after the RUC statement was issued.
Electricity Minister Dr Kgosientsho Ramokgopa argues that South Africa should give urgent attention to the strengthening and expansion of the transmission grid to avoid any further extension of the prevailing loadshedding crisis, which he says has its genesis largely in the failure of government to respond timeously to the need to add new generation capacity. “We can’t kick the can down the road in a similar manner as we did with generation,” Ramokgopa said of transmission grid investment during his weekly briefing on the implementation of the Energy Action Plan. He argued that there were positive signs that the generation supply/demand imbalance was beginning to stabilise, with coal fleet breakdowns having moved to within touching distance of the key 15 000 MW level during the past week, and with demand peaks having remained well below, at about 30 000 MW, the 34 000 MW peak initially assumed when Eskom released its winter plan. However, the lack of grid infrastructure, particularly in the wind- and solar-rich south-western provinces of the country, was now posing a serious risk to future security of supply, as it meant that renewables plants were struggling to connect to the grid. The absence of such capacity came to the fore during the sixth bid window of the country’s public renewables procurement programme when none of the 23 onshore wind projects that bid for a 3 200 MW allocation were selected as preferred bids, owing to claims of grid over-subscription in the Western, Eastern and Northern Cape provinces. “[In the area of generation], we kicked the can down the road as policymakers and we're sitting with this [current] problem . . . so, we shouldn't make the same mistake on transmission and think that we can resolve transmission sometime in the future. “Transmission must be resolved today.” He stressed, too, that the prevailing lack of investment in the grid was not a consequence of inadequate planning, with Eskom having drafted a credible Transmission Development Plan, but was rather a financing challenge. The latest TDP points to the need for the construction of 14 218 km of new high-voltage transmission lines by 2032, as well as the deployment of 170 transformers, with a capacity of 105 865 MVA, along with 40 capacitors and 52 reactors. Highlighting that Eskom was restricted by the National Treasury’s R254-billion debt relief package from taking on new borrowing, Ramokgopa said “more innovative ways” were required to overcome the funding issue. A report was being finalised on the matter and would outline ways government intended tapping private sector liquidity without creating conditions whereby the State relinquished ownership of the grid, or whereby the system operator relinquished responsibility for grid management. The report, he said, was far advanced in its drafting and would be shared once it had been through the necessary approval processes. “It’s going to be revolutionary,” Ramokgopa assured, having previously given an indication that various build, operate and transfer models were being assessed. The Minister also confirmed that he would be meeting with private wind and solar developers in the coming weeks to understand their concerns with Eskom’s recently unveiled Interim Grid Capacity Allocation Rules. The rules, which replace the ‘first come, first served’ framework that has hitherto prevailed with a ‘first ready, first served’ approach, give priority to so-called shovel-ready projects in an effort to avoid any hogging of scarce grid resources. However, the rules have been described as onerous by various bodies representing wind and solar stakeholders. “I will be taking time within the next two weeks to sit with some of the players there to hear what the issues are,” the Minister said.
Domestic new-vehicle sales in June increased by 14%, to 46 810 units, compared with the same month last year. The new-passenger-car market reached 29 795 units last month – a gain of 0.8% over June last year. The rental industry accounted for 13.4% of car sales last month. Sales of new bakkies, vans and minibus taxis – light commercial vehicles – jumped by 57.1%, to 13 945 units. June medium-truck sales grew by 8.2%, reaching 743 units, while heavy-truck and bus sales expanded by 19.6%, to 2 327 units. In contrast to these positive numbers, June export sales, at 27 296 units, dropped by 12.6% compared with the same month last year. This is an especially poor performance as June 2022 exports were heavily affected by flooding in KwaZulu-Natal. For the first half of the year the South African new-vehicle market was up 12 284 units, or 4.8%, on the corresponding period last year, while vehicle exports were 4.7% ahead of the first half of 2022.
Electric vehicle (EV) adoption is set to soar in the coming years, with more than 100-million passenger EVs expected on the roads by 2026, and more than 700-million by 2040. This is a significant increase from the 27-million units recorded at the beginning of this year. This is according to research company BloombergNEF’s (BNEF’s) latest yearly long-term Electric Vehicle Outlook (EVO) report. Electrification is now spreading quickly to all sectors of road transport, from rickshaws to heavy trucks, and is also picking up in emerging economies like India, Thailand and Indonesia. As momentum grows, new economic opportunities are taking shape, notes the report. The document also notes that EV sales are set to rise sharply. In the Economic Transition Scenario – BNEF’s base-case scenario which assumes no new policies are implemented – passenger EV sales will rise from 10.5-million units in 2022, to 22-million in 2025 (26% of sales), 42-million in 2030 (44% of sales) and 75-million in 2040 (75% of sales). Some countries will move much faster, including the Nordics, China, Germany, South Korea, France and the UK. By 2030, there will be 244-million EVs on the road, rising to 731-million by 2040 (46% of the fleet). The cumulative value of EV sales across all segments will hit $8.8-trillion by 2030 and $57-trillion by 2050 in BNEF’s base-case Economic Transition Scenario. “EVs and batteries are now a central part of many countries’ industrial policy and competition to attract investment will increase in the coming years,” says the EVO. “Direct electrification via batteries is the most efficient, cost-effective and commercially available route to fully decarbonising road transport,” says BloombergNEF EV head Aleksandra O’Donovan. “Still, a stronger push is needed on areas like heavy trucking, charging infrastructure and raw material supply.” ICE Sales in Decline The EVO report also found that oil demand from road transport was very near its peak. The rise of EVs will lead to a peak in overall road fuel demand in 2027. Demand in the US and Europe has already peaked, while demand in China is set to peak next year. Sales of internal combustion engine (ICE) vehicles reached its apex in 2017 and are now in long-term decline.
Engineering News editor Terence Creamer discusses government's that it is considering the possibility of public-private partnerships (PPPs) to expand grid capacity; Eskom's new grid access rules; and the market's response to the new rules.
BMW will invest R4.2-billion over the next five years in its Rosslyn plant in South Africa to build the new-generation X3 sports-activity vehicle, including a plug-in hybrid electric vehicle (PHEV). South Africa will be the exclusive global supplier of the X3 PHEV, with internal combustion engine production to only be added to the fold later in the product’s lifecycle. Production of the PHEV will start in the second half of next year, with the first prototype vehicles already rolling off the assembly line in Pretoria. The PHEV will also be on sale in South Africa. The Rosslyn plant this year celebrates its fiftieth anniversary. It was the European premium car maker’s first wholly owned plant outside Germany. BMW management board member for production and BMW Group South Africa (BMW SA) chairperson Dr Milan Nedeljković says the next step for the South African plant will be battery electric vehicles (BEVs). “By preparing for PHEVs we are setting the path for electrification.” Nedeljković says PHEV production will require some structural preparation within the plant, as well as skills training. He adds that flexibility is key to BMW’s global success, especially the ability to assemble different derivatives on a single assembly line, as is currently the case with Rosslyn producing the current X3, as well as the initial prototypes of the fourth-generation X3. “We are committed to transformation and our associates’ skills development with the implementation of a plant-wide training programme for the new model,” says Rosslyn plant director Dr Niklas Fichtmüller. “More than 300 BMW Plant Rosslyn associates will receive specialised training to support the production of the next-generation BMW X3 PHEV.” Around 20 000 people are directly and indirectly employed at BMW SA’s facilities and within its supply chain. More than 1.6-million vehicles have been manufactured at the Rosslyn plant, to date, and exported to more than 40 countries worldwide, including 14 African countries. The production portfolio in Rosslyn has included the BMW 1800 SA and BMW 2000 SA, as well as BMW 5 Series and BMW 7 Series vehicles. Rosslyn had been an important pillar for the production of the BMW 3 Series from 1983 until 2018, when the BMW X3, the best-selling BMW vehicle in South Africa, started rolling off the assembly line. PHEV production at Rosslyn will make the X3 the second PHEV model to be produced locally among South Africa’s seven vehicle manufacturers, with one mild hybrid also in production. No BEVs are produced in South Africa. Unicef BMW has also announced a donation of R30-million to support a United Nations Children’s Fund (Unicef) programme. The BMW Group and Unicef will embark on a joint effort targeted at thousands of South African primary and secondary school learners to extend and deepen their knowledge in science, technology, engineering, arts and mathematics.
Eskom’s newly released Interim Grid Capacity Allocation Rules (IGCAR), formulated in response to surging demand for grid access in a context of acute grid scarcity, have received a cool reception from industry, with some of the conditions included in the new framework being viewed as “onerous”. GM for operations enablement Velaphi Ntuli says the IGCAR, which have been developed and canvassed over the past six months, have been designed to ensure that shovel-ready generation projects are given priority. The rules, thus, replace the ‘first come, first served’ framework that has hitherto prevailed with a ‘first ready, first served’ approach. He reports that the rules are also designed to level the playing field between projects participating in public procurement processes and those being pursued in line with a recent reform allowing private distributed generation projects, including those that wheel electricity through the grid, to proceed without a licence. The absence of a grid queuing system came to the fore during the sixth bid window of the country’s public renewables procurement programme when none of the 23 onshore wind projects that bid for a 3 200 MW allocation were selected as preferred bids, owing to claims of grid over-subscription in the Western, Eastern and Northern Cape provinces. Ntuli reports that Eskom is working with the Independent Power Producers Office to finalise the status of projects that have been procured under various public programmes and are, thus, continuing to take up a grid allocation, but which have failed to reach financial close. Engineering manager Seetsele Seetswana says the new rules retain the principle of non-discriminatory and open access, but reports that Eskom has reserved the right to set aside allocations for future public procurement programmes to avoid a repeat of the failure of bid window six. To facilitate a shift to the ‘first ready, first served’ principle, Eskom outlined the criteria it would apply to assess the ‘state of readiness’ of a project, including: the securing of all environmental and water-use authorisations; power purchase agreement heads of terms signed between the independent power producer (IPP) and the end-user; confirmation of the appointment of Eskom-approved design consultants for self-build connections; measured data for solar for a period of a year and for two years for wind; and the payment of a Grid Capacity Allocation Guarantee issued by an Eskom-approved financial institution. Only once these conditions have been met will Eskom issue a budget quote (BQ) for grid connection, while still reserving the right to revoke such a quote should there be a failure on the part of the IPP to meet any of the milestones outlined in the BQ. Following a pause of seven months, Eskom will also begin processing BQs again under the new rules, starting with the backlog of applications that has accumulated. Eskom’s Nonhlanhla Miya reports that the processing of the 40 outstanding applications in the Eastern, Northern and Western Cape provinces would be processed as from the end of June and that the outcome of that process will be communicated by the end of July. The projects have a combined capacity of some 5 GW and those that are approved should secure BQs soon after having paid their guarantees, while those that fail to meet the IGCAR criteria will receive BQ refunds. South African Independent Power Producers Association (SAIPPA) chairperson Brian Day has described the new rules as “dysfunctional”, noting that they require grid connection to be done right at the end, and in terms of resource definition are more onerous than what is expected from a bank that might be funding up to 80% of an IPP project. “It's not rational. “The amount of work on the side of the IPP or developer is now enormous, long before grid connection is known to be possible. “The amount of money they've got to spend on technical preparations and on lawyers is enormous,” Day asserts. He notes that al...
The demands of digitalisation, electrification, autonomous vehicles, sustainability and changing consumer preferences have given rise to a host of new occupations within the automotive sector, Isuzu Motors South Africa president and automotive executive oversight committee skills development workstream chairperson Billy Tom has said. “The automotive industry must take deliberate steps to cultivate a culture that values and encourages the pursuit of technical expertise. By doing so, we can secure a pool of skilled individuals who will drive our industry forward even in the face of challenges,” he said on June 26. He was one of many industry leaders who spoke at a thought leadership roundtable discussion event hosted by naamsa | The Automotive Business Council, in partnership with financial institution Old Mutual, in Johannesburg. The event was the second instalment in a four-part series of thought leadership roundtable discussions focussed on the industry’s four key strategic areas for the 2023 calendar year. Discussions revolved around the theme of ‘transformation beyond compliance’ and how all key stakeholders within the automotive sector of South Africa needed to push the transformation agenda, which had become a licence to trade for the automotive industry in the country. In the realm of digitalisation, Tom revealed that there was increased demand for software engineers, data analysts and cybersecurity professionals, who were responsible for developing and maintaining the complex systems that enabled autonomous driving. Occupations such as autonomous vehicle engineers, simulation specialists and safety analysts have also emerged as key in the rapidly evolving field. “These individuals play a crucial role in developing and maintaining advanced digital technologies that power connected vehicles, smart factories and data-driven decision-making processes,” he explained. Additionally, expertise in virtual and augmented reality, machine learning and artificial intelligence were becoming increasingly valuable for automotive companies, he said. The shift towards electrification has also given rise to specialised occupations, in electric powertrain systems, betting technology and charging infrastructure. Workers with these skills are essential for the design, development and maintenance of electric vehicles (EVs) in the associated components. Moreover, occupations such as EV technicians and battery engineers have emerged to meet the growing demand for expertise in this field. Tom noted that sustainability had also become a more pressing concern for the automotive industry, leading to increased demand for workers with expertise in sustainable manufacturing practices, environmental engineering and renewable energy. “These individuals contribute to the development and implementation of eco-friendly processes and technologies that reduce the industry's carbon footprint. Additionally, skills in green logistics and supply chain management are increasingly valued as companies strive for sustainability throughout the entire value chain,” he said. In terms of changing consumer preferences, Tom said skills in user experience design, digital marketing and data analytics were increasingly essential for providing a personalised and connected experience for consumers. “As the demand for connected vehicles, technologies and smart mobility solutions grows, professionals in these areas play a pivotal role in shaping the future of the automotive industry,” he said. He added that the successful implementation of skills development initiatives in the automotive industry would require a comprehensive and strategic approach. “Through assessment analysis, we can identify industry demands, emerging technologies and global trends that shape the future of the work. By collaborating with relevant stakeholders, including government bodies, industry associations and educational institutions, we can ensure that our efforts align with market needs and drive in...
The construction mafia, or so-called ‘business forums’, first reared its head in KwaZulu-Natal in 2014 and 2015, invading construction sites to demand a share of projects, or that companies employ specific people or subcontractors. By 2018 and 2019 this practice also emerged in other provinces, with these forums often touting heavy-calibre weapons as they made their demands. A similar model of extortion has since spread to other industries, most notably mining. Much of the violence has subsided in KwaZulu-Natal, says Jenni Irish-Qhobosheane, a researcher at the Global Initiative Against Transnational Organised Crime. However, this is not a sign that the illegal activities have stopped, she notes, but rather that extortion has become normalised, and yet another cost of doing business in South Africa. Ayabonga Cawe, chief commissioner at the International Trade Administration Commission of South Africa, says extortion is compromising government’s infrastructure rollout, which affects the entire economy. He explains that conflicts such as these often arise when there are different interpretations of laws and regulations. “The problem lies in how preferential procurement has unfolded, and this opens up the way for opportunistic criminals,” he says. Irish-Qhobosheane agrees. “We do need to recognise that economic exclusion and a lack of economic transformation creates fertile ground for extortion in construction. “However, it is important to distinguish between genuine community concerns and criminals involved in extortion for their own gain.” Business forums typically demand 30% of the contract value be allocated to forum members, or directly to the forum itself. This figure appears to be derived from National Treasury’s Preferential Procurement Policy Framework Act. This Act states that 30% of public procurement contracts should be contracted to designated groups, as provided for in the Preferential Procurement Regulations, with the forums’ demands then painted with the veneer of transformation. National Treasury has strongly condemned this practice as illegal, and as a blow to government’s attempts to advance the interests of historically disadvantaged individuals and small businesses. Irish-Qhobosheane and Cawe spoke at Human Sciences Research Council events. Where to Now? It can hardly be emphasised enough that business has to put in place comprehensive directives for dealing with extortion attempts, says Corobrik director Musa Shangase. “The first principle should be to afford the business forum the opportunity for dialogue; to present their demands. “I advise sharing with them the terms of the contract and what the obligations are for advancing transformation goals,” notes Shangase. “They need to be informed whether the project is a public or private one, and what the implications are in each case.” Shangase also advises companies to request a database of the business forum’s constituents, and to employ a community liaison officer who can act as a mediator between the community and the company. The duties of the community liaison officer include negotiating, and developing and fostering relationships. In public sector projects, the community liaison officer acts as the link between the main contractor and the business forum. In the case of private sector projects, if a business forum insists on participation, the matter should be reported to the police, says Shangase. Business Against Crime’s Guidelines Business Against Crime South Africa (Bacsa) has, as part of the work of the National Priority Committee on Extortion and Violence at Economic Sites, authored a set of guidelines to help companies deal with extortion. Bacsa national project manager Roelof Viljoen says it is important for companies and their employees to understand what extortion is, so that they can identify and report it as and when required. Also, successful prosecution is vital to reducing extortion. Extortion as a crime requires two elements: the demand...
Eskom is expecting demand for the rest of South Africa’s winter months to remain below levels initially assumed when the utility finalised its base case for the high-demand season (see graphic above), while it is also beginning to report improved generation performance at some of its coal stations. When Eskom unveiled its winter outlook on May 18, it warned that it might be forced to resort to Stage 8 loadshedding (representing 16 hours of cuts in a 32-hour cycle) should it fail to cap coal plant breakdowns to below 15 000 MW and should demand spike on the back of colder temperatures, particularly in Gauteng. Eskom’s Eric Shunmagum reports that there have been favourable developments on both fronts, with demand having moderated from the 33 000 MW peak experienced in late May and supply having also improved from both Eskom and renewables plants. The May peak preceded the implementation of the winter tariff, implemented on large energy intensive businesses as from June 1. Shunmagum says Eskom has not yet calculated the full effect of the winter tariff but estimates that demand is likely to have dropped by between 850 MW and 1 000 MW as a result of large industrial plants having shut down in line with the introduction of the tariff. The utility is also pursuing a demand-side management campaign through which it hopes to shave a further 1 000 MW from consumption over the coming few months. He stresses, however, that the main reason for the current deviation from the winter demand base case is attributable to weather conditions which have also supported the availability of some renewables generators. The wind fleet in particular, has performed strongly during recent cold fronts, supplying up to 2 000 MW during evening peaks on certain days. While Gauteng could still face a cold snap, which could drive up demand significantly, the utility is nevertheless expecting peak demand to remain below the base case peak forecast outlined in May for the rest of the winter period to September. The utility’s latest peak demand forecast does not show demand rising above 32 000 MW again this winter. Shunmagum stresses, however, that there have also been improvements on the supply side, with unit breakdowns, which were trending at between 18 500 MW and 19 000 MW in May, currently trending between 14 500 MW and 16 000 MW. “So, there's at least a 3 000 MW improvement on breakdowns,” he states. Ahead of winter, the generation division outlined a goal of sustaining breakdowns to below 15 000 MW and of capping planned outages to below 3 000 MW to limit loadshedding, as well as the use of diesel at the open cycle gas turbines. “There has definitely been an improvement in generation performance,” he says, reporting particularly pleasing turnarounds at Tutuka, Duvha, Kendal and Majuba. On the supply-side, Eskom has also welcomed the decision by the Department of Forestry, Fisheries and the Environment to grant Kusile a postponement in meeting sulphur dioxide minimum emission standards. The postponement means that Eskom will be able to operate temporary stacks at the three units rendered inoperable after the Unit 1 flue duct collapsed on October 23, owing to a build-up of slurry. The collapse also compromised the unit 2 and 3 flue ducts, which share a chimney with the Unit 1 flue. Under the updated Atmospheric Emission Licence, Kusile will be able to bypass the flue gas desulphurisation plant until March 31, 2025 and resume output using temporary stacks that will be returned to service in November (Unit 3) and December (Unit 1 and Unit 2). The units will not be introduced at full load of about 720 MW, however, and will produce at about 520 MW apiece while employing the temporary stacks. The utility is planning to complete repairs to the ducts in the permanent stack by December 2024.
Regulator-licensed South African electricity trader Enpower Trading is promoting wheeling and trading over municipal networks as a way of combatting the trend of “off-grid flight”, which poses a threat to electricity income that can contribute more than half of a municipality’s overall revenues. There is a growing demand from independent power producers (IPPs) and traders to transport, or wheel, electricity across both Eskom and municipal networks and such demand is expected to grow in light of reforms that could result in IPPs and traders seeking multiple customers for their surplus generation. Municipalities are also receiving an increasing number of wheeling applications from local business, but the current absence of a national wheeling framework, the development of which is being prioritised by the National Energy Crisis Committee, means there are currently no clear guidelines, and many municipalities also lack the skills to conclude such agreements with either IPPs or traders. Enpower Trading CEO James Beatty says municipalities are justifiably concerned about entering into lopsided agreements that could further deepen their financial challenges and accelerate utility death spirals. At the same time, however, there is a growing risk of losing rate-paying customers as a result of grid defection, which Enpower describes as off-grid flight. “If the energy is not flowing through the grid, the municipality can’t generate income from it,” Beatty highlights, adding that such defection is also resulting in less income to support indigent communities. It is also negatively affecting affordability for those who remain grid-connected, as there are fewer customers to share the grid costs. “In most instances, customers are leaving the grid because the energy has become too expensive and unreliable. If a lower-cost and cleaner alternative can be provided, businesses and households will stay connected.” Enpower Trading, which is one of only a handful of electricity traders currently licensed by the National Energy Regulator of South Africa, believes a revenue-neutral energy trading model can play a role in curbing such defection and is currently engaging with some 60 municipalities on the concept. The model has been designed, Beatty explains, to ensure that a municipality retains both its customers and its electricity revenue surplus by facilitating the purchase of cheaper and cleaner electricity from IPPs. The municipality enters into a Use of System Agreement with Enpower, which includes a wheeling tariff that is priced to cover the municipalities network costs and sustain any surplus revenues generated from the asset. Enpower Trading, rather than the municipality, contracts with the IPPs, eliminating the need for a procurement process, and is also responsible for collecting payment for wheeled energy from customers. The company’s first live and operational transaction was concluded with the George municipality, in the Western Cape, and involves trading power from SolarAfrica Energy’s 1.8 MW George-embedded solar plant to four low voltage-connected customers inside the George distribution grid. Enpower Trading has entered into a power purchase agreement (PPA) for 1 MW of the solar energy generated on site in George and has signed supply agreements with the four customers priced at a discount to their existing municipal tariff. The George municipality is compensated for wheeling the electricity through an agreed wheeling tariff. The company has also entered into a PPA for a further 100 MW which is expected to become operational toward the end of 2024. A use of system agreement has also since been concluded with the Overstrand municipality and Enpower Trading is a participant in the City of Cape Town’s wheeling and trading pilot project, which is set to commence operations in July. Beatty believes South Africa’s preoccupation with generation has resulted not only in an underinvestment in distribution networks by municipalities, but ...
Engineering News editor Terence Creamer talks about the grid constraints, particularly in the Eastern, Western and Northern Cape; Eskom's approach to grid access to date and how it proposes to change that; and what else will be needed to deal with the issue of grid constraints.
Highly qualified automotive technicians are becoming increasingly scarce in South Africa, with their training now encompassing not only internal combustion engines, but also hybrid technology and battery electric vehicles. With most modern cars having upwards of 30 000 parts, and being more of a computer-on-wheels than a people mover, training takes a very long time, with technicians continuing their training as new models and technologies are introduced, says Knysna Toyota dealer Tom Esterhuizen. “Finding young people to become automotive technicians is not easy, primarily due to the stigma associated with technical trades in South Africa. “Unlike in developed countries such as Germany and Switzerland, where artisans are highly regarded and respected, there is a negative perception surrounding such occupations in South Africa,” he adds. Local dealerships and repair shops also typically require candidates to have a matriculation certificate with a pass mark of at least 50% in mathematics and science, or in at least one of these subjects. Alternatively, candidates may be considered once they have completed a bridging programme. National Automobile Dealers’ Association (NADA) director Gary McCraw says today's automotive technicians are highly specialised and far removed from the mechanic of the old days. They are also highly sought-after, with their training and retention costs a significant investment for dealerships. This demand also extends to markets abroad, as local training and qualifications both meet international standards. A successful franchise dealer with more than 50 years’ experience in the local motor industry, who started as an apprentice technician himself in 1969, McCraw says today's master or diagnostic technician “can be compared to a medical specialist” in terms of the duration and intensity of studying, as well as required on-the-job technical training. “.Top-line automotive technicians must work on cars that are 20 to 30 years old, with relatively basic technology, and then transition to the latest models with highly advanced technology, thousands of parts all perfectly engineered to work in unison, most of which are electronic,” says McCraw. He says the standard apprenticeship in the motor industry has changed significantly. In addition to working under an artisan, apprentices now spend as much as two weeks a month at college for theoretical studies. Once the apprentice qualifies as an artisan, the real pressure begins in terms of skills improvement and theoretical learning, much of this specific to certain vehicle models and systems. Depending on the specific franchise, the first five years after qualifying as an artisan can be demanding as the technician progresses towards becoming a master or diagnostic technician. Technicians are also required to undergo yearly refresher courses, while also receiving training prior to the introduction of a new model. “The major challenge faced by dealerships is how to attract matriculants with maths and science to pursue careers as automotive technicians, and to remove the stigma attached to the technical trades, which have become more focused on lab-coats and laptops than overalls and ‘lappies’,” says McCraw.
The Namibian government has confirmed that it will take up a 24% equity stake in a $10-billion green hydrogen project being developed in the Tsau //Khaeb National Park, near Lüderitz. Finance Minister Iipumbu Shiimi said the decision to take up the position in the project, the investment value of which is almost equivalent to the country’s gross domestic product, followed on from the finalisation of agreements for the establishment of SDG Namibia One. SDG Namibia One is a blended financing infrastructure fund that will raise money from local and international investors to develop Namibian green hydrogen projects. The fund’s establishment will also see Namibia’s Environment Investment Fund partnering with two Dutch organisations – Climate Fund Managers and Invest International – in the creation of NH2 Fund Managers as the fund manager of SDG Namibia One. An initial €40-million is being provided as grant funding by Invest International, while European Investment Bank concluded a letter of intent with Namibia at COP27 for the raising of €500-million, a portion of which will be designated for investment through SDG Namibia One. Green hydrogen also featured strongly during the joint visit to Namibia on June 19 by Netherlands Prime Minister Mark Rutte and Danish Prime Minister Mette Frederiksen. Rutte and Frederiksen subsequently travelled to South Africa, where President Cyril Ramaphosa announced that a $1-billion SA-H2 Fund, which is being seeded by an initial $250-million from Invest International of the Netherlands, was being established to mobilise green hydrogen investments. Meanwhile, Hyphen Hydrogen Energy, which is developing the Namibian projects, also announced that a memorandum of understanding had been signed with Namibia, NamPort, NamPower, the Port of Rotterdam, Gasunie and Invest International committing the partners to work together on designing the infrastructure required to deliver on Namibia’s green hydrogen production ambitions. The MoU builds on the existing relationship between NamPort, Port of Rotterdam and Hyphen in the development of the new master plan for the Port of Lüderitz, while NamPower and Hyphen are also investigating the possibility of supplying excess electricity generated by the project to NamPower. Namibia also announced the establishment of an Implementation Authority Office to facilitate and accelerate the development and implementation of Namibia’s synthetic fuels industry with funding for the office being provided by grants from Invest International and the European Union. These developments follow the signing in late May of a feasibility and implementation agreement (FIA) between Namibia and Hyphen for the project, which aims to produce two-million tonnes of green ammonia yearly by 2029. Hyphen, which is a Namibian-registered joint venture between Nicholas Holdings Limited and Enertrag, was awarded preferred-bidder status in November 2021 and the FIA comprises five sequential phases, including a two-year feasibility period.
State-owned electricity utility Eskom is preparing to issue updated grid queuing rules that will outline how it plans to manage scarce grid connection capacity in a way that avoids “hogging” of capacity and ensures that only “shovel-ready” project are allocated capacity. The new approach is contained in what Eskom terms its Interim Grid Capacity Allocation Rules (IGCAR) document, which outlines a shift from the ‘first come, first served’ framework that has hitherto been implemented to one based on ‘first ready, first served’. The absence of a queuing system came to the fore during the sixth bid window of the country’s public renewables procurement programme when none of the 23 onshore wind projects that bid for a 3 200 MW allocation were selected as preferred bids, owing to claims of grid over-subscription in the Western, Eastern and Northern Cape provinces. Eskom tells Engineering News that the rules under the IGCAR are “aimed at ensuring that as many generators are connected to the grid as soon as possible and also ensuring that there is no capacity hogging”. The IGCAR has been developed following consultation with the industry and, while they do not require any approval by the National Energy Regulator of South Africa, given that Section 21 of the Electricity Regulation Act grants Eskom power over the rules, the utility will nevertheless seek to have the rules adopted and approved by the regulator. In addition, Eskom intends hosting a briefing session with industry in the coming two weeks to clarify how it intends managing the IGCAR. Eskom has also communicated with the industry that it will resume with processing budget quotes (BQs) for grid access in the Cape region once the IGCAR process has been finalised. Having also been criticised previously for the length of time it was taking its Grid Access Unit to issue BQs, Eskom reports that it is in the process of ensuring that timeframes can be reduced. “On average in the last 12 months, it has taken eight months to issue a BQ due to issues both internal to Eskom and in the industry,” Eskom tells Engineering News. The utility confirms that its Grid Access Unit currently has 28 staff members, but stresses that the bulk of the technical work is done by the various technical experts in the distribution and transmission divisions. “The goal is to issue BQs within six months and the introduction of the IGCAR and other initiatives will result in improved delivery times,” Eskom states. “There are currently 45 BQs that have been issued between 1 April 2021 to 30 November 2022 which have been delayed for various reasons with a total capacity of 4 717 MW.” The importance of having queuing rules that are supportive of shovel-ready projects has been amplified by the result of a recent survey showing that there is a 66 GW pipeline of wind and solar projects at various stages of development, including about 18 GW that could be considered ready to proceed. There have also been intensifying calls for a clarification of the rules in light of the fact that the market is no longer dominated by a single public procurement programme, following the removal of the licensing threshold for embedded generation projects. Operation Vulindlela reports that this reform, together with a streamlining of project approvals means that projects are theoretically able to add capacity to the grid more quickly and has resulted in an embedded generation project pipeline of 108 projects with a combined capacity of just over 10 GW. During a recent presentation to the Presidential Climate Commission, the Presidency’s Rudi Dicks, who oversees Operation Vulindlela, confirmed that Eskom was revising its grid capacity allocation principles with the aim of allocating available capacity to projects that are ready to proceed.
South Africa has started to mine its tax records in a bid to produce highly localised spatial economic data that will offer city and municipal policy makers far greater visibility of the geographic distribution of both industries and jobs within their boundaries, as well as key developmental disparities. The information is being analysed under the aegis of the newly launched Spatial Economic Activity Data – South Africa programme, which is spearheaded by the National Treasury, the Human Sciences Research Council and the Cities Support Programme, but is also supported by several other departments and institutions, as well as the UK Foreign, Commonwealth and Development Office and Switzerland’s State Secretariat for Economic Affairs. Finance Minister Enoch Godongwana says that by scrutinising anonymised tax data – which is being provided by the South African Revenue Service but housed in a National Treasury secure data centre – it is now possible to measure the economic outcome of public sector investment in and within municipalities. Although tax data is limited in scope to the formal sector only, HSRC senior research specialist Dr Justin Visagie says the data still covers about 80% of the country’s jobs and more than 90% of gross domestic product. The data source, he adds, offers an impressive array of economic indicators for jobs and firms, which can also be broken down by industry or sector, wage levels, gender, age, export status and firm size. Importantly, too, the data is current, covering the period from the 2013/14 tax year to 2021/22 and can be updated with each new tax year. The data source extends to all 213 municipalities and includes suburb-level information for the six metropolitan councils. The first report to emerge from the mining of the tax data is titled the ‘Cities Economic Outlook 2023’ and shows that South Africa’s six metros dominate the national economy, with almost two-thirds of all formal jobs in the country located within their boundaries. “The concentration of employment opportunities in cities explains why their population has been growing more strongly than the rest of the country,” the authors state, adding that the ratio of jobs to population is also much healthier than elsewhere. Nevertheless, it also shows that the recent trajectory of employment growth in South African cities has been weak. “The very poor performance of manufacturing and construction industries is also a major concern for the millions of less-skilled workers that live in cities.” The review of spatial tax data for metropolitan economies also highlights the unique role and profile of each city within a broader urban, regional and national system. It confirms, for instance, that Johannesburg is a financial centre, that manufacturing and logistics dominate in Ekurhuleni and eThekwini, that Tshwane’s economy has a strong bias towards national government and professional services, while Cape Town is a diversified but tourism-centric economy, that Nelson Mandela Bay is an automotive centre, Buffalo city depends on provincial government and Mangaung has strong contributions from health and education. Godongwana says the data shows that, while the metros are the country’s job generators, it also shows that there has been job-shedding within strategic industrial spaces within the metros, with more than half of the top 30 metro industrial spaces losing jobs since 2014. It also indicates that the collapse of one metro could result in the collapse or severe decline of specific industries and that strong urban centres are also necessary for productive rural hinterlands. “There is a strong correlation between well-governed and stable cities and increasing productive activity. Failure to get the basics right in our cities is resulting in firms and households voting with their feet.” The Minister notes, too, that the analysis shows that townships continue to be marginalised from the formal economy and that there has been a failure, post-ap...
It is impossible to know what the real demand is for Volvo Car South Africa’s (SA’s) fully electric vehicles (EVs), as persistent supply challenges have managed to skew the sales numbers, says Volvo Car SA MD Greg Maruszewski. “We don’t really know what the true demand is for our EVs in South Africa,” he notes. “We sell our allotted vehicles as soon as we receive them.” However, the good news is that supply from China and Sweden has started to ease from May onwards, says Maruszewski, both in terms of EVs and plug-in hybrids. Also, the numbers are trending upwards, with Volvo Car SA selling 50 EVs in the whole of 2022, but 50 in the first quarter of this year alone. Volvo Car SA currently has two EV models on the market – the XC40 (two derivatives) and the new C40, launched at the end of May. The next model to be added to the EV line-up is “truly something to get excited about”. The small EX30 – the same size as a B-segment car – is set to make its debut towards the beginning of next year. The EX30 will take the Swedish car maker into an EV segment in which it has not yet played, both in terms of price and size. Maruszewski believes the competitive starting price of R775 900 will stand the newcomer in good stead as one of the most affordable EVs on the market. “It will be very competitively priced, and it is set to change people’s perception about the Volvo brand,” he notes. He adds, however, that the rand’s recent nosedive makes it increasingly difficult to import EVs into South Africa at competitive prices. As Volvo Car SA expands its horizons, it also aims to retain its loyal clientele, with the new EX90 flagship EV set to launch in South Africa in the middle of next year. Maruszewski expects Volvo Car SA to sell around 300 EVs this year, out of a total of roughly 2 000 vehicles – a 15% share. PHEVs will have an expected sales share of between 10% and 12%. These numbers are despite intensified loadshedding this year, which is often cited as the chief reason not to buy an EV. Maruszewski says the people who complain most about EVs in South Africa are typically not EV owners. “People who own these vehicles know that you can charge your car through the night without any challenges. “South Africans also know not to charge anything when empty, but to rather charge when you can.” The range on EVs has also improved to such an extent that it has become unnecessary to seek out public charging infrastructure when using the vehicle on a day-to-day basis. “Besides, charging infrastructure and charging times continue to improve tremendously,” says Maruszewski. “EVs continue to be an excellent choice as city cars or a household’s second car. The cost per kilometer is lower and the performance better than that of an internal combustion engine.” Maruszewski says the reasons for premium car buyers “not to go electric” will become fewer and fewer “in a few years’ time”. “Europe, China and the US will all make a strong move to electric in this decade. Charging infrastructure will expand, range will improve and EVs will become cheaper.” Maruszewski believes that 70% of Volvo Car SA’s sales will be EVs by 2027, with third-generation batteries offering range of up to 800 km.
Engineering News editor Terence Creamer talks about the National Logistics Crisis Committee and why it was established; the involvement of business in the committee; how the committee will approach its work; and how the influence of business will be managed where conflicts of interest may arise.
Cape Town’s energy strategy, which has been released for public comment, envisages the addition of 650 MW of new independent generation within five years in line with the city’s stated goal of protecting itself against four stages of loadshedding by 2026. Mayor Geordin Hill-Lewis indicates that the new supply will be secured from various sources, including from city-owned generators, independent power producers (IPPs), from residents and businesses feeding into the grid, as well as through wheeling and trading. Over the medium term, the intention is to introduce 1 GW of new supply and end loadshedding entirely, he says. The city is already implementing parts of the strategy, with initiatives under way to enable small-scale generators to feed into the grid and to procure IPP power. The draft strategy indicates that priority will now also be given to finalising the contractual and technical arrangements for customers and aggregators to wheel and trade electricity across its distribution network, as well as to expand utility-scale storage systems. “Ending loadshedding is the most important action we can take for job-creating economic growth [and] Cape Town’s draft energy strategy maps the way toward four stages of loadshedding protection by 2026,” Hill Lewis states. Short-term loadshedding mitigation will be achieved largely through a mix of demand management programmes, utilising the Steenbras hydro plant to provide relief of up to two stages, and by securing 500 MW of dispatchable energy, which will protect the city from up to four stages from 06:00 to 22:00 daily, he adds. The strategy also commits the city to optimising energy use and efficiency, as well as to alleviating energy poverty, through subsidy reform, the ongoing electrification and lighting of informal settlements and improving access to informal backyard dwellings. The three-phase strategy also includes a medium-term goal to 2031 of implementing the reforms required to ensure that the city has a financially sustainable electricity utility and a long-term ambition of transitioning Cape Town to carbon neutrality by 2050. The draft strategy places particular emphasis on ensuring a “future-fit energy utility business” that is able to adapt its business model such that it can provide financially sustainable energy services in a context of a competitive and distributed system. It states that over the coming five years the city will seek to restructure the electricity tariff in a way that enables improved cost recovery for fixed distribution system costs. This tariff reform, the strategy states, should result in a utility department that “encourages private sector participation in energy supply, safeguards the provision of subsidised energy access to indigent households, and ensures that the cost of providing and maintaining electricity infrastructure is fairly distributed across customers”. The city's long-term intention is also to distribute electricity directly to all customers in Cape Town, including those currently in Eskom supply areas. The draft strategy, which also makes the case for integrating electric vehicles and green hydrogen into the city’s broader energy system, is open for public comment until July 31.
The National Logistics Crisis Committee (NLCC) will adopt a two-pronged approach to addressing the rail, port and road crises currently undermining growth and job creation in South Africa, whereby several urgent interventions will be pursued in parallel to a reform agenda with longer-term implications, including the opening of rail and port networks to private operators. The Presidency’s project management office head Rudi Dicks tells Engineering News that government and business have already agreed to jointly support the workstreams that will be formed under the NLCC, the final terms of reference for which are likely to be signed off later this week. Business has also agreed in principle that a portion of the R100-million Resource Mobilisation Fund, created to finance the injection of private-sector expertise into the National Energy Crisis Committee (Necom), can also be used to support the NLCC. In addition, former Exxaro Resources CEO Mxolisi Mgojo and Toyota South Africa CEO Andrew Kirby will serve as CEO-level representatives on the NLCC, supported at a technical level by Business Unity South Africa deputy chairperson Khulekani Mathe and Integrated Supply Chains executive consultant Ian Bird. Government is still in the process of finalising its representatives, but Dicks reports that key Ministers, including Enoch Godongwana, Khumbudzo Ntshavheni, Sindisiwe Chikunga and Pravin Gordhan, will participate and will be supported at a technical level by either directors-general or deputy directors-general. Likewise, Transnet will be expected to direct senior executives to participate in the workstreams, as has been the case with Eskom executives within Necom. Operation Vulindlela will play the role of secretariat and several of the transport-related reforms that it is pursuing will be folded into the work of the NLCC. The secretariat will continue to draw in technical support from specialists such as Jan Havenga, Sarah Truen and Jaap van der Merwe. The NLCC will be chaired by President Cyril Ramaphosa, who will meet with the structure every six weeks. Dicks reports that a workstream will be created specifically to address several urgent problems across the logistics sector, with a particular focus on key corridors handling commodities such as coal and iron-ore, as well as containers. Volume recovery targets have not yet been finalised, but these are likely to be central, given Havenga’s estimate, as reported by News24, that South Africa’s logistics crisis may have lopped as much as 6.68% off of the country’s gross domestic product last year. There will also be an intervention to combat ongoing cable theft, as well as serious maintenance and spares backlogs across Transnet’s port and rail systems, including the problem of long-standing locomotives that has arisen as a result of a contractual impasse between Transnet and CRRC, of China. In addition, the congestion that has developed along key road corridors, such as the N2, N3 and the N4, as well as at certain land borders will receive dedicated attention, with the NLCC aiming to draw in all the public sector departments and agencies responsible for border management. Particular priority will be given to the extreme delays that have developed at the Lebombo border crossing at Komatipoort, as a result of a combination of increased road haulier volumes to offset the degeneration in the rail service, as well as technical problems at the border itself. The steep decline in Passenger Rail Agency of South Africa volumes will also receive urgent attention, but Dicks says any devolution of responsibility for passenger rail to metropolitan councils is likely to form part of a more medium-term reform process. Workstreams will also be established to address ongoing procurement problems at Transnet, as well as the reforms required to support greater private sector participation across the rail and harbour networks. Dicks insists that government will take the lead in the workstream on priv...
The zero-emission, green-energy-powered Energy Observer (EO) has docked in Cape Town for a visit of just more than a week. The vessel, which acts as an on-the-water laboratory able to test various forms of environmentally friendly energy, is covered in 202 m2 of solar panels. It also has two small sails, built to minimise shade on the solar-panel-covered deck. The EO’s other main energy source is hydrogen, with the vessel able to produce hydrogen onboard from seawater. In order to propel the ship with the hydrogen – especially at night – the EO utilises fuel cells that have been adapted from the Toyota Mirai fuel-cell sedan. Toyota is also a technology partner in the EO project, along with industrial gas specialist Air Liquide. The chemical process to create electricity from seawater also produces hot water and heat for the crew’s use, explains EO technical director Didier Bouix. “The vessel is completely autonomous in terms of energy.” The France-based EO, acting as an advocate for the expanded implementation of green power worldwide, has already sailed more than 50 000 nautical miles since 2017, with Cape Town its eightieth port-of-call. The EO’s journey is scheduled to come to an end next year. It is envisioned that the EO’s successor, the EO II, will use liquid hydrogen, as opposed to hydrogen gas. This is because the EO II, at 150 m long and 24 m wide, will be a cargo vessel able to carry 1 100 containers. (In contrast to this, the much smaller EO has a 31-m repurposed catamaran as its base, with its functioning more recreational in nature.) “When we require a lot of energy, like a big ship, we want to use liquid hydrogen, as this is more efficient when powering large vessels,” notes Bouix. It is hoped that construction of the EO II will start next year, says EO captain and founder Victorien Erussard. “The EO II will be the world’s lowest-carbon cargo ship.” As a former merchant navy officer, Erussard says he has witnessed firsthand the damage caused by the global fleet of tankers, bulk carriers, ferries and cruise ships to the marine ecosystem. He says there are roughly 100 000 merchant vessels in the world, carrying 10.7-billion tons of freight year. Most of these vessels operate using heavy fuel oil, which has an extremely negative ecological footprint. This is especially problematic as it is envisioned that maritime traffic could quadruple by 2050.
The Presidency has moved to outline the criteria that will be used before any decision is made to delay the decommissioning of certain coal-fired power stations, to take account of the prevailing supply deficit, and has also dismissed suggestions that there is any plan to extend the life of the stations. Addressing the Presidential Planning Commission (PCC) on June 9, project management office head Rudi Dicks acknowledged that the decision to potentially revise the schedule had raised questions both domestically and with the International Partners Group that had agreed to provide $8.5-billion-worth of concessional funding to support South Africa’s Just Energy Transition Investment Plan (JET-IP). “In the context of our energy crisis, there is a conversation we are having about whether we can delay decommissioning, but that’s very different from extending the life of power plants,” Dicks said. Cabinet, he added, had reaffirmed the country’s commitment to the decarbonisation targets outlined in its Nationally Determined Contribution, as well as to the goal of transitioning towards net-zero. “However, care will be taken to ensure that the manner in which these commitments are achieved does not compromise energy security or the immediate priority of reducing loadshedding.” He told PCC commissioners that any revision to the decommissioning would be informed by a comparison of the costs of refurbishing older coal-fired power stations with the cost of investing in replacement capacity, including renewables, batteries and gas. In addition, Dicks said the following three assessments would be undertaken ahead of any revision, including: A technical assessment by a consortium of international experts appointed by the National Treasury into the feasibility and cost of refurbishing and/or repowering each power station; A modelling exercise to be undertaken by the National Energy Crisis Committee (Necom) of estimated future capacity from various other sources compared with existing capacity and projected demand growth; and A modelling exercise to be undertaken by the JET-IP Project Management Unit and/ or the PCC of the impact of any delay on the country’s decarbonisation trajectory. He reported that these assessments should be completed by July and the outcome would be presented to Cabinet for approval. In addition, no decommissioning would take place until the technical assessments were completed. Dicks said any possible revision could affect Camden, Grootvlei and Kriel, which were reportedly performing better than some of the younger stations in the Eskom fleet. Particular reference was made to Camden, which is meant to be fully decommissioned over the coming two years, but which is operating at a 60% energy availability factor (EAF) – a level that the full fleet reached for the first time since September 2022 only on June 2 this year, despite a target having been set for such an EAF to be achieved by the end of March. He promised that any revision would not be based on a “thumb suck” but by the evidence emerging form the assessment under way. Dicks also reported that the JET-IP implementation plan framework would be published in July, following which focus groups would be assembled in July and August on electricity infrastructure, the just transition in the electricity sector and in Mpumalanga in particular, as well as on new energy vehicles, green hydrogen, skills and on municipalities. “The JET-IP Implementation Plan will be finalised thereafter and recommended for approval by the JET-IP Inter-Ministerial Committee in October 2023,” Dicks reported. Mpumalanga Premier Refilwe Mtshweni-Tsipane said that, given the prospect of economic losses for coal-dependent communities, strategies were needed to ensure growth in other sectors such as agriculture, tourism, manufacturing and renewables. “The constant refrain as I travel across the province, especially in the coal belt, is that the transition cannot be ‘just’ if they are left behind. ...
Engineering News editor Terence Creamer discusses the findings of the ‘2023 South African Renewable Energy Grid Survey’, which was compiled by Eskom in collaboration with the South African Wind Energy Association and the South African Photovoltaic Industry Association and whether or not Eskom is up to the task of addressing the grid constraints identified by the survey.
Port and rail parastatal Transnet and government cannot “go it alone” to repair South Africa’s strained logistics network, says South African Association of Freight Forwarders (SAAFF) CEO Dr Juanita Maree. “Our current ports and rail model is, at best, archaic compared to international standards, while it also fails the country’s socio-economic growth and development goals.” Maree says South Africa “desperately needs” a public-private partnership (PPP) model that will create jobs and attract “much-needed” investment in the logistics sector and the economy. “This is necessary for South Africa Inc.” Maree points out that the rail sector’s underperformance in 2022 constrained economic growth by 5.3%, while port inefficiencies cost the economy R46-billion in direct and indirect costs. She notes that the concepts of time and cost are intricately linked in the logistics system, with each additional hour adding costs, while also placing unnecessary strain on the logistics chain. “An improved logistics performance increases the efficiency in trading by reducing the time and cost to trade, which could then result in an increase in the volume of trade, which, ultimately, spills over into economic growth and socio-economic development.” SAAFF believes that the South Africa logistics system needs at least R200-billion in investment. However, the good news is that a rejuvenated system could potentially create 55 000 additional jobs in the rail and ports sectors, while also generating R55-billion in additional tax revenue a year. “It is no longer government or the private sector. It needs to be a collective culture to fight for SA Inc,” says Maree. “Fortunately for SA Inc, a road map is currently being developed by the Operation Vulindlela team in the President's office,” she adds. “Furthermore, considerable progress has been made in advancing joint action between business and government in the transport and logistics space. “We must stabilise and improve operational performance on key trade corridors, mobilising private sector resources and accelerating the implementation of the National Rail Policy to close the capacity gap. “Fortunately, work is underway to immediately align and integrate business efforts into government's Freight Logistics Roadmap and urgently enable the development of work plans, deliverables and timelines, while also integrating the private sector into the recently formed National Logistics Crisis Committee," says Maree.
Volvo Car South Africa (SA) has announced the pricing on its newest model – the all-electric EX30 small sports-utility vehicle (SUV) – ahead of its introduction early next year. Pre-orders for the vehicle opened today, June 8. With a starting price of R775 900, the EX30 will be one of South Africa’s most affordable electric vehicles (EVs), as very few of these full-size, high-tech cars are available at under R1-million in the local market. The EX30 will also debut as the fastest accelerating Volvo ever, completing the zero to 100 km/h sprint in 3.6 seconds in 315 kW twin-motor performance guise. The extended-range version of the single motor (rear-wheel-drive) powertrain, meanwhile, is capable of covering up to 480 km before it requires recharging. “We worked exceptionally hard to set EX30 pricing at what is unquestionably an extremely competitive level, granting South African consumers the opportunity to own a fully electric SUV for the price of a similarly sized internal combustion engine vehicle,” says Volvo Car SA MD Greg Maruszewski. The EX30 is 4 233 mm long, 1 836 mm wide and 1 555 mm tall, with a wheelbase of 2 650 mm. That means it is only 192 mm shorter from nose to tail than the popular XC40. In South Africa the battery choices will include the high-voltage 51 kWh and 69 kWh units. Three trim levels (Core, Plus and Ultra) will be on offer. Volvo aims for half its global sales volume to comprise of fully electric cars by 2025, with the remainder to take the form of hybrids. By 2030, the Swedish car maker aims for every new vehicle it sells to be completely electric.
Cape Town Mayor Geordin Hill-Lewis has announced that 15 commercial electricity suppliers will start wheeling electricity through Cape Town’s grid in July. The city’s Mayoral Committee has greenlit the project that will allow third parties to sell electricity using Cape Town’s grid infrastructure, as part of a long-term project to reduce the impact of Eskom loadshedding. The pilot project should culminate in the full-scale implementation of wheeling in the Western Cape capital by the end of the year. “Wheeling allows people to buy electricity from each other using existing grid infrastructure,” says Hill-Lewis. “The future is now, as Cape Town gears up for the first electron to be wheeled between our pilot project participants this July. “This is the business end of our pilot, following the development of the billing engine and the completion of wheeling agreements,” he notes. Cape Town last year invited applications to participate in the wheeling pilot, with 15 participants – representing 25 generators and 40 customers – now confirmed and about to start wheeling. “The city is getting on top of the complexity of wheeling, which requires new skills, regulatory and policy changes, billing development and bilateral agreements,” says Energy MMC Beverley van Reenen. “Our programme will allow electricity to be wheeled over both the municipal and Eskom distribution networks in Cape Town. “Sales will be governed by bilateral power purchase agreements within a market environment, as opposed to a regulated environment, as the price of the energy is set between the parties and not by the city, Eskom or the National Energy Regulator of South Africa.” Cape Town also already has the enabling legislative framework in place for wheeling, with the city’s Electricity Supply By-Law allowing for the retail wheeling of electricity through the network. Wheeling will take place on 11 kV and higher voltages. The 15 wheeling pilot participants who submitted valid applications to generate and sell power are Amazon Data Service South Africa; Brinmar Private Energy Trading South Africa; Distributed Power Africa; Energy Exchange of Southern Africa; Energy Partners Utilities; EnerJ Carbon Management; Enpower Trading; Floating Solar; Make a Difference Ventures; NEURA Trading; Phofu Solar Plant; POWERX Proprietary; Redefine Properties; Solar Africa Energy; and Swish Property Seven.
CEOs from some of South Africa’s largest companies – including Sasol’s Fleetwood Grobler, Anglo American’s Nolitha Fakude, former Exxaro CEO Mxolisi Mgojo, Toyota South Africa’s Andrew Kirby, Remgro’s Jannie Durand, Sibanye-Stillwater’s Neal Froneman and Sanlam’s Paul Hanratty – have agreed to lead workstreams set up to support government in tackling the country’s prevailing crises in the energy and transport sectors, as well as debilitating levels of crime and corruption. Following a meeting between organised business and government on June 6, an agreement was reached to form a partnership to tackle the three issues, which have emerged as major obstacles to growth, development and job creation. The partnership with government and State-owned companies will be pursued under the banner of Business for South Africa (B4SA), which played a key role in supporting the country’s vaccination roll-out during the height of the Covid pandemic. In energy, collaboration has been under way for some time through the National Energy Crisis Committee (Necom), which was set up last year to tackle loadshedding through various supply, demand and security interventions announced as part of the Energy Action Plan. However, business has also agreed to work through Necom to develop a “confidence building national communication plan” in support of the Energy Action Plan. In transport, business will be integrated into the recently formed National Logistics Crisis Committee, or NLCC, which has been set up as a result of ongoing operational and security problems at Transnet, which have resulted in a collapse in rail volumes on certain key corridors. There are also plans to mobilise the private sector to support the implementation of the National Rail Policy and to align and integrate business’ efforts into government’s Freight Logistics Roadmap. Business has also agreed to provide “arms-length” support to combat crime and corruption, including by injecting expert resources to further capacitate the National Prosecuting Authority and the Investigating Directorate. It has also been agreed that the Joint Initiative to Fight Crime and Corruption, or JICC, be used as the delivery mechanism to implement the interventions. President Cyril Ramaphosa said the partnership with B4SA, which is Business Unity South Africa’s (Busa’s) implementation platform, was driven by a shared determination to overcome the severe challenges currently faced by South Africa. Busa VP Adrian Gore added that the partnership agreement underscored organised business’ belief in the country and its commitment to achieving sustainable and inclusive economic growth. The three priority workstreams have reportedly been fully mobilised, and their priorities will be continuously reassessed and reprioritised, with potential to add new areas such as water and infrastructure.
A new survey of South Africa’s renewable-energy development pipeline, and its potential implications for grid planning and investment, reveals that some 66 GW of wind and solar projects are at various stages of development in South Africa and that a number of these projects are envisaged to be coupled with battery storage. The pipeline also includes some 2 GW of gas-to-power. The ‘2023 South African Renewable Energy Grid Survey’, which has been compiled by Eskom in collaboration with the South African Wind Energy Association (SAWEA) and the South African Photovoltaic Industry Association (SAPVIA) indicates that about 18 GW is at an advanced stage of development. This means that environmental approvals have been granted, the site measurement campaign and feasibility work have been completed and a power purchase agreement has either been signed, is close to signature, or the project is ready to participate in the next public procurement bid window. Projects in this category would, thus, be able to enter into commercial operation within three years if granted a grid connection by Eskom or a municipality. Another 21 GW is defined as being under development, while a further 27 GW is described as being at an early stage of development. Eskom senior manager for strategic planning Ronald Marais reports that the survey has been undertaken in an effort to enhance grid planning, given the importance of the grid to ensuring that new generation is connected expeditiously so as to reduce, and eventually eliminate, loadshedding. “The survey is a key input to the Transmission Development Plan assumptions for spatial allocation of renewable generation. “This provides key locations for strengthening and providing access,” Marais tells Engineering News. The results point to an emerging trend for potential investors to pair variable solar photovoltaic (PV) and wind projects with battery storage, with more than 19 GW of the solar PV and 7.5 GW of the wind projects surveyed coupled with batteries. Some 21 GW of wind and 13 GW of solar is being progressed independently of storage, while about 300 MW of battery storage was being pursued independently of a renewables generator. SAWEA CEO Niveshen Govender says the survey offers the renewables industry an opportunity to help influence grid planning. He notes that, from a wind perspective, developments are initially located predominantly in the Northern, Western and Eastern Cape provinces, but that from 2027 onwards both KwaZulu-Natal and Mpumalanga emerge as important wind jurisdictions. Govender believes the survey has reinforced the need for co-location of technologies such as wind, solar and batteries to optimise the use of the grid, as well as for curtailment to support the future development of renewables. “The curtailment regime needs to be well thought out and well managed within the contractual structures to ensure positive outcomes. “Furthermore, the overwhelming majority of industry responses indicated a willingness for curtailment in grid-constrained areas with many suggesting up to 5% being acceptable – this is very much in line with international examples,” Govender says. SAPVIA spokesperson Frank Spencer tells Engineering News that not all of the projects in the development pipeline can actually be built or connected, owing to both grid and skills constraints. “But what it does show is tremendous interest from the private sector to develop power projects in South Africa and help solve loadshedding challenges,” Spencer adds.
Eskom’s Transmission Division, which will form part of the separated National Transmission Company South Africa once established later this year, will begin relying more heavily on the engineer, procure and construct (EPC) contracting model as it seeks to accelerate the pace at which transmission infrastructure is built in a context where the lack of grid has become a key impediment to the injection of new generation capacity. In an address to suppliers, MD Segomoco Scheppers reported that South Africa needed to add more than 1 500 km of new transmission lines yearly between now and 2032 to ensure that the infrastructure was in place to facilitate the addition of more than 50 GW of new generation capacity, mostly in the form of variable renewables, over the period. He revealed that the division was currently only adding 300 km of new power lines yearly, a pace that was entirely insufficient to ensure that 14 000 km of new lines were installed over the ten-year horizon from 2022 to 2032. In the ten years from 2013 to 2022, only 4 347 km of new powerlines were added. In addition, more than 122 600 MVA-worth of transformation capacity would have to be added, representing 77% of Eskom’s current installed base of just over 160 000 MVA. In the prior ten-year period only 19 060 MVA was introduced. Scheppers reported that the EPC model would be used in tandem with Eskom’s more traditional procurement models in an effort to ensure that transmission infrastructure was delivered at “a scale and at a speed that we have not done before”. The model would involve either Eskom Transmission or an owner’s engineer completing the front-end engineering design and overseeing the procurement of a single EPC contractor, which would be expected to complete the detailed design, procure the necessary material, and construct and commission the solution, before handing it over as a fully functional and compliant asset to the transmission division. Transmission project GM Naresh Singh said the EPC contracting model was being introduced not only because of the “monumental task ahead” but because Eskom’s current model had become too complex and time consuming to ensure that the grid was deployed at the pace currently required. “Our processes have become bureaucratic, lethargic, non-value creating and ineffective and we are very convinced that changing strategy to be EPC-heavy will result in better outcomes for transmission and the country at large,” Singh explained. Using EPC as the main “strategy of choice” was also an acknowledgment that Eskom, which had once been regarded as a reference point internationally, had fallen far behind global best practice and that its technological status had “substantially diminished”. There are reportedly also separate discussions under way about the prospect of employing public-private partnerships to build and operate grid assets for a period of about 20 years, but Eskom did not discuss such an approach during the meeting with suppliers. Scheppers acknowledged ongoing scepticism regarding the credibility of the investment plan in light of Eskom’s previous failure to deliver new grid infrastructure in line with previous Transmission Development Plans. However, he said there was recognition at the highest level of government about the constraint the lack of grid was placing on the connection of much-needed generation capacity, as became apparent when no wind projects advanced during a recent procurement round for 3 200 MW of new wind capacity, owing to a lack of grid. There was also a clear message that grid investment should be prioritised as part of conditions linked to the R254-billion debt relief being extended to Eskom by the National Treasury. He reported that 80% of the R74-billion required to invest in the grid over the coming five years had already been secured, which he said should provide the supplier community with a “higher degree of confidence” that the investments would materialise. “All the key stakehold...
he African last-mile delivery market was valued at $1.14-billion in 2021.By 2030 this is expected to reach $2.35-billion, expanding at an annual compound growth rate of 8.45% between 2022 and 2030, says Frost & Sullivan consultant Nomvo Kasolo.For Africa, home to 1.3-billion people and growing to 2-billion by 2050, the last-mile delivery market presents significant opportunities going into the future.African cities are seeing extraordinary growth, with more than 60% of Africans expected to live in cities by 2030, notes Kasolo.“With this comes higher demands for efficient supply chains into growing urban areas and the remaining rural space, in order to avoid expansion of the rural-urban divide.”In 2021 alone, 21 transport startups were established in Africa, addressing issues as such as digitisation and last-mile delivery solutions.Kasolo says the last-mile sector can be segmented into categories by product, industry, sales channel, delivery type, service speed and geography.“Based on current trends, players with the fastest turnaround times across all categories will enjoy the largest growth.“The waiting time for consumers has been cut from the previous five to six days, to one-day or same-day delivery.”Kasolo says this shift has created many opportunities to establish efficient sales channels.Digital communication platforms that allow for easy returns, exchanges, and increased connectedness between client and vendor are gaining ground, including the likes of Kobo360, WumDrop, Pargo and so forth.“Aside from newer entrants, larger industry giants are also creating innovative models to reduce shipping costs and ride this opportunity wave,” she notes.“Regional expansions of newer entrants and established players are happening in Egypt, South Africa, Nigeria, Ivory Coast, Tunisia, Ghana, Ethiopia, Zambia, Kenya, and other markets.“With most of the regions, the growth needs to be met by additional investments in key infrastructure (physical and digital) to ensure long-term solutions.”Overall, the high-potential areas in the next decade are expected to be through growth in business-to-customer models (by product type), e-commerce (by industry), distributor segment (by sales channel) and parcel services (by delivery type).In South Africa alone, the revenue generated by e-commerce is expected to reach $7.07-billion for 2022, growing to $14.9-billion in 2027, says Kasolo.The positive trend in Africa’s last-mile story could, however, be cut short if challenges in supporting infrastructure and restraints like corruption are not addressed, she adds.
Engineering News editor Terence Creamer provides insight into the announcements made at the inaugural South African Green Hydrogen Summit; Sasol's confirmation that it is pressing ahead with its green hydrogen plans; and Cabinet's approval of the Green Hydrogen Commercialisation Strategy for public comment.
Cabinet has approved the publication of the Green Hydrogen Commercialisation Strategy (GHCS) for public comment.Minister in the Presidency Mondli Gungubele said the strategy would seek to ensure that South Africa became a major producer and exporter of green hydrogen and derivatives, and that the sector contributed towards growth and supported the country’s just energy transition.The GHCS follows on from the Hydrogen Society Roadmap, which was adopted by Cabinet in 2021.The release of the strategy for public comment also follows the recent South Africa Green Hydrogen Summit, where it was confirmed that South Africa has a potential green-hydrogen investment pipeline of R300-billion.It was also announced that the Green Hydrogen National Programme had been included in an updated list of Strategic Integrated Projects (SIPs) for accelerated development under the country’s Infrastructure Development Act.Projects identified as SIPs are theoretically placed on an expedited path to development, with prescribed and shortened timeframes for various project approvals and authorisations.Green hydrogen also features in government’s Just Energy Transition Investment Plan, or JET-IP, which outlines investments valued at a combined R1.5-trillion that should be made in the electricity, electric vehicle and green hydrogen sectors over the five years from 2023 to 2027.Public consultation on the JET-IP is expected to be finalised during February.
Domestic new-vehicle sales in November recorded an eleventh consecutive month of year-on-year growth.Total sales increased by 18.2%, to 49 413 units, compared with the same month last year.The new-passenger-car market reached 32 859 units in November – a 16.9% jump on the same period last year.The car-rental industry accounted for 20% of car sales, as the tourism industry continued to gear up for the summer holidays.Sales of new bakkies, vans and minibus taxis expanded by 20.8%, to 13 477 units.November medium-truck sales grew by 17.5%, reaching 900 units, while heavy-truck and bus sales increased by 22.6%, to 2 177 units.New-vehicle exports surged by 64.7%, to 34 310 units.Year-to-date vehicle export numbers are now 17.9% ahead of the corresponding period last year, at 326 516 units.Naamsa | The Automotive Business Council says the country’s new-vehicle market continued its resilient performance during November, despite a myriad of negative economic pressures such as rising interest rates, a dramatic increase in loadshedding, high fuel prices, a weak economy and ongoing supply shortages.“But, the new-vehicle market continued to outperform expectations, and with only one month to go in the year, it was running 13.6% ahead of the corresponding period last year.”The outlook for 2023 is, however, not as rosy, notes Naamsa.Economic growth in South Africa continues to be adjusted downwards and is now expected to reach 1.1% next year.“In view of the close correlation between new-vehicle sales and the country’s gross domestic product growth rate, single-digit growth in new-vehicle sales could be expected for 2023.”Exports are also at risk.“Given persistently high inflation and aggressive interest rate hikes in many advanced and developing countries at present, the risk to export sales reside on the downside.”New-Energy Document Set for ReleaseNaamsa says it will release its Thought Leadership Discussion Document on New Energy Vehicles (NEVs) by the end of December.Naamsa CEO Mikel Mabasa says the industry “has been discussing and consulting extensively” during the past 12 months on the country’s road to NEV use and production.Only two South African plants currently produced hybrid vehicles, and none battery electric vehicles.Mabasa notes that South Africa-based vehicle manufacturers compete within their own global production networks for model allocations, and not with each other.The decisions on where in the world NEVs will be produced are influenced by the availability of a low carbon logistics network; green and low-cost energy; investment and infrastructure support; competitiveness versus other international plants; and a suite of government support incentives to lower the cost of production and stimulate demand.“Logically, South African [vehicle manufacturers] would require at least similar support as their overseas sister plants in order to compete on an equal footing,” says Mabasa.“It is for this reason that the industry has proactively worked on its proposals, which will be shared with other social and business partners in order to accelerate South Africa’s NEV roadmap without further delay.“It is clear that NEV transition support [from government] is urgently required for positive plant decisions to be taken.”Mabasa adds that South Africa has an obligation to ensure that its auto manufacturing base is protected, retained and strengthened, given that the country is at risk of losing more than 50% of its production volume as internal combustion engines will soon be phased out in Europe, its single biggest export market.
Transnet Freight Rail (TFR) insists that valuable lessons have been gained from a recent attempt to sell 16 slots on its Cape and Container corridors, which resulted in only one applicant emerging as a potential operator of slots on the Cape Corridor between Kroonstad and East London. In fact, CEO Sizakele Mzimela dismissed suggestions that the process had failed, noting that it had been a pilot project and had proceeded in the absence of the policy certainty on third-party access that is likely to arise only once the National Rail Policy had been finalised, probably only in 2024. Third-party access has been identified as one of the main reforms to be pursued for implementation under government’s Operation Vulindlela initiative to unlock growth, investment and job creation. The proposed sale of rail slots by TFR initially garnered significant interest, with about 90 people having participated in a stakeholder session held at Esselen Park in April. A total of 19 entities then made formal expressions of interest, despite ongoing concerns about the design of the scheme. Particular anxiety had been expressed over the two-year duration of the contracts, which was seen as too short to ensure that returns could be made on what could involve significant capital investments in light of limited rolling-stock leasing options. Likewise, the sale of the slots on a ‘Voetstoots’ basis also raised some concern given the risk of disruption, owing to ongoing theft and vandalism on the rail network, including large-scale cable theft. Eventually, two companies made formal applications – two for the Container Corridor and one on the Cape Corridor – by the August 31 submission deadline. On November 25, TFR announced that only Traxtion Sheltam had successfully completed the first stage of the evaluation process, and only in relation to its Cape Corridor submission, as its diesel-locomotive offering for the electrified Container Corridor was not regarded as viable. Traxtion Sheltam is now required to complete the rest of the application process which entails fulfilling the Rail Safety Regulator requirements and other operational readiness requirements for the contract to begin as planned on April 1. Should it prevail, Traxtion Sheltam will be able to run three trains a week on the Kroonstad-East London line, which can handle both diesel and electric locomotives, with much of the cargo expected to be in the form of agricultural products. TFR provided no timeframe for the initiation of another slot-sale process but reported that ongoing discussions were under way with Operation Vulindlela and the Department of Transport (DoT) regarding the most appropriate model for introducing third-party access in future. The current model draws significantly on the market reforms undertaken by Deutsche Bahn, of Germany, which have been under way since 1994 and where there is significant rail-leasing capacity. Planning and operations command centre GM Bessie Mabunda said work was under way to adapt the model to South Africa’s specific conditions, while also drawing on reform lessons from markets such as the UK and Australia. Mabunda added that the initial contract with Traxtion Sheltam would also help TFR in refining its approach and “help us to frame a model that is a lot more appropriate to the environment that we find ourselves in”. “Transnet does not view the outcomes of this first phase as a failure,” Mzimela stressed, indicating that it had enabled TFR to understand the enablers that were required to implement third-party access. These insights would also help facilitate further conversations with policymakers with the understanding that policy certainty was likely to be critical to building investor confidence in, and momentum around, the reform process. “Transnet will continue to engage with relevant stakeholders on third-party access where appropriate, aligning with the work that the DoT continues to undertake towards the implementation of the White Paper...
South African battery storage pioneer Freedom Won, which is on a rapid, loadshedding-fuelled expansion path, is ramping up production at its newly expanded 15 000 m2 factory in Honeydew, Gauteng, to exceed the current production of 50 MWh of batteries every month – enough energy storage to support around 5 000 South African households in combination with solar power. The latest expansion, which is unlikely to be its last, forms part of an ongoing upscaling of the enterprise that belies its humble beginnings in 2009, when cofounders Antony English and Lizette Kriel decided to establish a company with some initial funding support from family members. In fact, Freedom Won, which was officially launched in 2012, started life in English’s double garage at his home on a wildlife estate in Kromdraai, Gauteng, with an eye not on stationary storage applications but rather electric mobility, specifically the conversion of petrol and diesel vehicles to electric. English, a University of Cape Town electro-mechanical engineering graduate, left his career in the mining industry to team up with marketing specialist and entrepreneur Kriel on the venture, having already converted his own Jeep Grand Cherokee to electric. The company discovered initial demand in the conversion of game-viewing vehicles and boats; markets with such exacting clients that English was forced to draw on all his engineering experience, as well as five years of self-directed research, to develop a sophisticated and robust lithium battery solution. That solution’s battery management system, or BMS, which has been refined over the years, remains at the heart of Freedom Won’s stationary batteries, which employ Lithium Iron Phosphate (LiFePO4) cells imported from China. English tells Engineering News that his electric-mobility vision drew him to the LiFePO4 chemistry, which was initially viewed as too expensive for use in stationary applications – a scenario that has since changed in light of the expansion of cell manufacturing in China. Nevertheless, Freedom Won remains open to other battery solutions, particularly in light of recent price volatility. However, English believes that LiFePO4 still has advantages – including inherent cell safety, long life, and mature cell manufacturing value chain – that are unlikely to be eclipsed in the near term. Given the strong domestic growth outlook, English is also increasingly convinced that the South African market is approaching the economies of scale required to make an investment in local cell manufacturing feasible. Such an investment, which would require technology and commercial partnerships, could also buffer the sector from the type of supply chain disruptions associated, for example, with Covid lockdowns and the recent KwaZulu-Natal floods, which threatened Freedom Won’s production output continuity in 2021. The recipient of the South African National Energy Association’s 2022 ‘Energy Shapeshifter Award’ may be interested in participating in such a venture, which is likely to require development finance and/or government support to materialise. In the meantime, the focus at the 330-employee-strong company is on expanding local battery production and integrating as much local content, by volume, as possible, given that the cells still make up the lion’s share of the battery’s value. Attention is also going towards potential new products, particularly in light of the strong growth in the commercial and industrial market segments, which has been enlivened not only by intensifying loadshedding, but by the surge in diesel prices. In addition, there is a growing realisation that integrating batteries into grid-tied solar photovoltaic installations materially increases the solar payback by allowing such installations to continue producing when the grid is unavailable, while also taking commercial advantage of time-of-use tariffs by discharging the batteries in peak tariff periods and charging the batteries when tariffs are low...
The South African government has imposed a six-month ban on the export of copper and copper-alloy scrap, as well as most ferrous scrap as part of the first phase of a three-phase intervention designed to combat the rampant theft of metals used in public infrastructure. The economic damage of ongoing theft and vandalism has been estimated at R47-billion and has amplified both loadshedding and the disruption of freight and passenger rail services. Trade, Industry and Competition Minister Ebrahim Patel reports that the temporary prohibition of exports is effective from the publication of a Government Gazette on November 30 but says transitional arrangements have been included to allow for exports approved ahead of the ban. The temporary prohibition was approved by Cabinet earlier in the month and follows a comment period on a draft policy outlining possible restrictions on the export of ferrous and non-ferrous scrap published on August 5. More than 2 800 comments were received on the draft policy, which Patel says were considered prior to the finalisation of the new policy, which primarily seeks to dampen demand for stolen metals. During the first phase, the export of copper and copper-alloy scrap, the theft of which is said to be imposing the highest economic costs, will be entirely prohibited. Ferrous scrap exports have also been banned, but with several exceptions, including for aluminium and for stainless steel, as well as ferrous waste and scrap produced in the ordinary course of manufacturing processes. Patel says that a permit system, to be administered by the International Trade and Administration Commission (Itac), will also be imposed on semi-finished copper exports during Phase 1 and be continued into the second and third phases. Exports of other metals will not be prohibited but will instead be subject to a permit system administered by Itac. During Phase 2, a licensing system will be put in place for all copper trading in South Africa and sellers of copper waste and scrap metal will need to register under the Second-Hand Goods Act (SHGA), once amended to cater for the policy change. To register, applicants will need to show a tax-clearance certificate and dealers will be required to submit detailed purchase and sales information to a centralised database. Registered buyers of copper scrap will also only be allowed to purchase from registered sellers. However, it is envisaged that waste pickers will be exempt from the requirement to register under the SHGA, which will allow such individuals to sell all non-copper metals. In addition, registered dealers will be able to purchase non-copper metals from incidental unregistered sellers. During Phase 3, government will consider amendments to existing legislation, or the passing of new legislation, to create a dedicated metal trading licensing regime. “Prohibiting the use of cash in transactions involving waste and scrap and semi-finished metal products may also be introduced,” Patel reports. “In this case, no buyer will be allowed to be in possession of waste and scrap or semi-finished metal products unless it is backed up by an EFT or similar electronic record.” Individuals and entities may also be blacklisted from government contracts if they have contravened metal trading regulations. Patel says the new regime attempts to strike a balance between the needs of the overall economy and society relative to those of firms and individuals whose commercial interest will be negatively affected. ‘COST OF DOING NOTHING IS FAR HIGHER’ “We've looked carefully at both sides of the equation . and on the one side these measures will limit, for a period, the export of these products, but scrap metal traders are still enabled to sell those products within the domestic market; beyond that period, exports would be permitted but on a regulated basis. “There is no question about it that there is going to be a commercial cost to some of the businesses that have built their economic model a...
The Shoprite Group has started testing a Scania heavy-duty electric truck as part of its delivery fleet. Robin Jooste, 28, from Mitchells Plain, Cape Town, has been selected to drive the vehicle. The 100% electric refrigerated truck can hold about 16 pallets. It has a fully electric cooling system, powered by the vehicle’s battery packs, and aided by solar panels on the roof of the vehicle. With a range of about 350 km, the vehicle will be used for localised deliveries, and will be recharged using renewable energy generated by Shoprite’s existing solar installations. The truck also features glow-in-the-dark signage, which will make it more visible when travelling at night. “As Africa’s largest grocery retailer, the Shoprite Group places significant focus on reducing its environmental impact across its operations,” says group chief supply chain officer Andrew Havinga. “One of the ways we are doing this is by increasing the energy efficiency of our truck fleet. “The acquisition of this truck . . . is another major move in this direction.” Shoprite says the addition of the electric truck forms part of the group’s ongoing efforts to reduce the environmental impact of its supply chain. It recently also acquired more than 100 Euro 5 low-emission trucks. More than 900 of its trailers are also fitted with solar panels, which enable the refrigeration and tailgate lift to continue running, even when the truck is switched off.
Sasol energy business VP Priscillah Mabelane reports that the JSE-listed group has identified three priority clusters for the roll-out of its green hydrogen strategy, while also supporting government with plans to develop Boegoebaai, in the Northern Cape, into a green hydrogen and derivatives export hub. Speaking at the South Africa Green Hydrogen Summit in Cape Town, Mabelane said Secunda, the Vaal Triangle and Saldanha Bay had been selected for various initiatives, with specific green-steel-related projects being pursued in partnership with ArcelorMittal South Africa in the Vaal Triangle and Saldanha Bay. Sasol was pursuing an initial sustainable aviation fuel (SAF) opportunity, known as the HyShiFT programme, in Secunda in partnership with Linde, Enertrag and Hydregen, which will bid to secure support under Germany’s H2Global platform. Mabelane says the group has a longer-term vision to transform the OR Tambo International Airport into a global sustainable aviation hub. Enertrag new energy solutions head Dr Tobias Bischof-Niemz, who also spoke at the summit, said the installed Fischer Tropsch (FT) capacity at Secunda positioned Sasol with a significant “first-mover advantage”, given that Secunda was the only FT plant globally already producing a certified aviation fuel based on grey hydrogen. The H2Global mechanism was likely to prove crucial in unlocking the advantage, however, given that green hydrogen was a commodity, which meant it faced a “first mover disadvantage”, with later movers benefitting from the technology learnings of early adopters. Should the project receive such support, the HyShiFT programme would seek to displace 1% of the grey hydrogen currently used at Secunda with green hydrogen, which would be produced using a 200 MW electrolyser and 450 MW of renewable electricity to be produced in Mpumalanga. The green hydrogen would be used in Sasol’s FT reactors to produce a certified SAF. In the Vaal Triangle cluster, meanwhile, Sasol was partnering with ArcelorMittal South Africa to investigate the production of green hydrogen for use in steelmaking, and the capturing of unavoidable carbon dioxide. Sasol was also assessing the potential to supply other industries in the region, which currently use grey hydrogen in their production processes. The group is also repurposing an existing 60 MW electrolyser in Sasolburg to produce green hydrogen that will be used to pilot other green-mobility projects in partnership with the Industrial Development Corporation, including some Toyota Mirani fuel-cell vehicles and mine haulage trucks. In time, Sasol will also look to transition the 500 000 t ammonia and methanol produced at Sasolburg from grey to green hydrogen. In Saldanha, Sasol was also partnering with ArcelorMittal South Africa on a green steel project using green hydrogen, which could result in the re-opening of parts of the mothballed Saldanha Steel mill Meanwhile, President Cyril Ramaphosa offered an update on the Boegoebaai green hydrogen studies being facilitated by Sasol. The President said significant progress had been made on master plan for a green hydrogen special economic zone (SEZ) at Boegoebaai, with the aspiration to support 40 GW of electrolyser capacity by 2050. Mabelane said Sasol’s green hydrogen strategy had two imperatives: “One is to anchor the local demand [and] the second part is to drive the green hydrogen hub facilitation.”
A R300-billion investment pipeline has been identified under South Africa’s Green Hydrogen National Programme, which has been designated as a Strategic Integrated Project (SIP) for accelerated development under the country’s Infrastructure Development Act. Speaking at the South Africa Green Hydrogen Summit in Cape Town on Tuesday, President Cyril Ramaphosa argued that government was seeking to use the programme to position the country as an “investment destination of choice” as countries in Europe and Asia sought to import green hydrogen to both decarbonise and bolster their energy security. South Africa, the President said, had the potential to produce up to 13-million tons of green hydrogen and derivatives a year by 2050. To do so would require between 140 GW and 300 GW of renewable energy, which would represent a massive scale up in a context where South Africa had procured only about 7 GW of wind and solar since 2011. South Africa’s existing renewables generators are currently insufficient even to cover the electricity supply gaps left by Eskom’s failing coal fleet, which has resulted in the country entering its most intensive period of loadshedding since power cuts were first introduced more than a decade ago. Ramaphosa said South Africa’s strategy would embrace the export of green hydrogen and derivative products, such as green steel, sustainable aviation fuel, ammonia and fertilisers. The country would also seek to position itself to manufacture electrolysers, fuel cells and renewable-energy components. He again stressed South Africa’s “inherent” green hydrogen production advantages, owing to its world-class wind and solar endowments. These advantages were amplified, moreover, by the fact that companies such as Sasol and PetroSA had expertise in using hydrogen in the production of synthetic fuels and chemicals, with South Africa already producing 2.4-million tons of grey hydrogen yearly for domestic consumption. “We are driving regulatory and legislative reform to make our economy more competitive, to attract more investment and to create more jobs,” he added. A total of 19 green hydrogen projects had been identified for development, nine of which having been formally registered with Infrastructure South Africa, an initiative of the Ministry of Public Works and Infrastructure and The Presidency to accelerate infrastructure investment. Public Works and Infrastructure Minister Patricia de Lille announced that the Green Hydrogen National Programme had been included in an updated list of SIPs to be listed in an upcoming Government Gazette. Projects identified as SIPs are theoretically placed on an expedited path to development, with prescribed and shortened timeframes for various project approvals and authorisations. De Lille confirmed that the Gazette would include the Prieska Power Reserve, the Ubuntu Green Hydrogen Project, the Hydrogen Valley developments, the Boegoebaai Green Hydrogen Development and the Saldanha Bay Hydrogen Project. Providing an update on the flagship Boegoebaai project, Ramaphosa said that Sasol and the Northern Cape provincial government had made significant progress on the master plan for a green hydrogen special economic zone (SEZ), which aims to support 40 GW of electrolyser capacity by 2050. “This would require approximately 80 GW of renewable energy, which is almost double South Africa’s current installed electricity generation capacity. “Transnet has issued a request for proposals for the development of the port and rail project, which could see the port developed by 2028.” Western Cape Premier Alan Winde highlighted that he and Northern Cape Premier Zamani Saul had signed heads of agreement for the two provinces to collaborate on the so-called Western Southern African Development Community Green Hydrogen Corridor to produce green hydrogen for the global and local markets. Under the agreement, the provinces, which both have green hydrogen strategies, will seek to kickstart projects such as...
Zeda will invest in the renewal of its fleet next year, with the group expecting the supply of new vehicles to stabilise in 2023, says CEO Ramasela Ganda. Zeda is a mobility specialist that incorporates the Avis and Budget brands. It is active in the vehicle leasing and rental sectors, and is set to list on the JSE on December 13, following its unbundling from Barloworld. The global automotive market has seen the persistent short supply of new vehicles on the back of a semiconductor shortage, Covid-19-related shutdowns, trade wars and the war in Ukraine. Zeda believes it may have perhaps overpaid for new vehicles in recent years, as it has been unable to source all of its desired vehicles, with lower-specced units not always available. On the flipside, however, a normalisation of vehicle availability will mean that buoyant used-car margins will normalise, something which is currently boosting Zeda’s bottom line as it pushes these units into the market following the completion of service, says Ganda. Zeda has 14 Avis car dealerships, as well as an online sales channel. Apart from the improved availability of new vehicles, other good news for Zeda is that Ganda also expects a “significant recovery” in the South African tourism market as Covid-19 abates, which should boost vehicle rental numbers. While car rental demand has improved, it is yet to return to pre-pandemic levels. Zeda currently has a 79.1% utilisation of its rental fleet. Ganda notes that Zeda has worked hard in recent years to diversify the business from its traditional tourism focus by, for example, the addition of vehicle subscriptions and heavy-vehicle leasing. Zeda on Monday delivered its financial results for the year ended September 30, ahead of its debut on the JSE. Group revenue was up 6.6%, to R8.18-billion, while operating profit increased by 52.8%, to R1.26-billion. The car rental business grew revenue by 9.7% to R5.98-billion, while operating profit surged 159.3%, to R861-million. In the leasing business (Avis Fleet), revenue was down by 0.9.%, to R2.19-billion, impacted by an adverse outlook on parts pricing, interest rate hikes and foreign currency fluctuation. Operating profit declined by 18.6%, to R403-million. “I look forward to leading this solid business into the future,” says Ganda. “Today, Zeda Group is the largest and only integrated mobility provider in sub-Sahara Africa offering both short-term car rental and long-term fleet management and leasing solutions across 11 countries in Africa.”
President Cyril Ramaphosa reports that the pipeline of confirmed private embedded generation projects has increased to 100 with a total combined capacity of around 9 000 MW. The President confirmed the figure in a series of written responses to Parliamentary questions posed by Democratic Alliance permanent delegate to the National Council of Provinces from the North West, Carin Visser. The questions focused on what progress, if any, had been made since both the President’s State of the Nation address, which had electricity security as a major theme, and his July 25 announcement of a series of initiatives to tackle intensifying loadshedding. South Africa has experienced its worst-ever year for rotational power cuts with more than 155 days affected by the beginning of November and the outlook for the coming two years remaining bleak. In his written responses, Ramaphosa said the amendment to Schedule 2 of the Electricity Regulation Act – which allowed generation facilities below 100 MW in size to wheel power across the grid and to sell power to multiple customers without requiring a licence – had created a vibrant market. He added that the 100 MW licensing threshold was in the process of being lifted entirely by a further reform to Schedule 2 that was in progress. The registration process with the National Energy Regulator of South Africa (Nersa) for such generation projects had also been “substantially simplified” to shorten timeframes for project approval. “These measures will enable significantly more generation capacity to be added to the grid from independent power producers (IPPs).” The President also noted that a National Energy Crisis Committee had been established to oversee the implementation of the Eskom and non-Eskom initiatives announced in July and provided the following update on the non-Eskom supply interventions, including: the submission by Eskom of a net-metering tariff for residential customers to Nersa, with work under way to develop a feed-in tariff mechanism to further incentivise uptake of rooftop solar; The development by Eskom of a standard offer programme to purchase available power from existing installations, as well as an emergency generation programme to procure power that can be made available at times of peak demand; the recruitment of skilled personnel, including former Eskom staff, to support operational improvements at the utility, with three appointments of former Eskom employees having been made at power station manager level for Kendal, Koeberg and Medupi; and the importation of an additional 200 MW of power from neighbouring countries, with negotiations under way to secure over 1 000 MW of additional power subject to agreements being finalised. It was also highlighted that several municipalities were at various stages of procuring power independently, while the President offered a mixed progress report on government’s procurement of additional utility-scale generation from IPPs. “The first three preferred bidders from Bid Window 5 have signed project agreements and additional projects are expected to reach this milestone within the coming weeks,” he wrote, without making specific reference to the fact that a total of 25 wind and solar projects had meant to have progressed to construction under the round, but were facing difficulties in reaching financial close. “Three projects from the risk mitigation procurement programme representing 540 MW of solar photovoltaic and 225 MW of battery storage have reached financial close and commenced construction,” he added, again without stating that most of the projects, representing about 2 000 MW, had not progressed as planned. “The amount of new generation capacity to be procured through Bid Window 6 has been increased from 2 600 MW to 4 200 MW. [and] a request for proposals (RFP) has been released for over 500 MW of battery storage, which will be followed by a further RFP for 3 000 MW of gas power,” the President wrote. Eskom, meanwhile, was also...
The South African Chamber of Commerce and Industry (Sacci) has announced that it will launch South Africa’s first, and perhaps Africa’s first, Small Business Growth Index (SBGI), which is expected to serve as a leading indicator of small business’ performance, concerns and prospects for growth. Sacci, in partnership with the Bureau for Market Research (BMR), which is a subsidiary of the University of South Africa, will start collating information through a questionnaire or survey in February and publish the first report in March. The SBGI will be published on a bi-monthly basis. Sacci and BMR believe the index can help provide key insights towards achieving greater economic growth and increased job creation in the country, and particularly serve as a guide for government on the necessary support it should provide. In addition to providing key information on the state of small businesses in South Africa, Sacci services manager Danny Vengadasamy says the SBGI will create an exclusive community from where small businesses are able to access information and share best practice. Sacci plans to also create a forum and more opportunities for small businesses to participate and contribute information. BMR has made available R25 000 as an award for the Small Business Ambassador of the Year to help incentivise businesses to fill in the SBGI questionnaire six times a year and participate in the online forum. The winner of the award will be announced when Sacci hosts its next yearly conference towards the end of 2023. BMR head Deon Tustin explains the organisation chose the Harrod-Domar Growth Model to apply to the theoretical research behind the SBGI and in developing the SBGIs questionnaire, which determines key drivers that need measuring when considering growth potential or growth opportunities. He says the organisation and Sacci deemed it best to ask small businesses about the challenges they experience in doing business, about changes in the cost of doing business and the state of their finances, among other questions. BMR and Sacci conducted a pilot study to test the effectiveness of the methodology behind the SBGI survey. The pilot involved a self-administered online survey sent to businesses, using a platform that BMR designed, for submission within a week or two of receiving. Thirty-nine businesses, mainly operating in the manufacturing sector, participated in the pilot round of the SBGI survey. BMR garnered information about the businesses years of operation, the number of people employed, location, turnover, business structure and business classification. The pilot survey found that 33% of the 39 businesses are trading with difficulty, while 10% are at risk of closure. Only 15% of the 39 participants cited they are “growing strongly”. The survey also notes the highest costs impacting on small businesses relate to taxes, wages and transportation at the moment. Most of the pilot participants foresee increasing their prices moderately, owing to rising input and operating costs, in the next two months. When asked how long the business would survive given inflation cost pressures and assuming they implement/receive no intervention support, 30% of the pilot survey participants said they would survive between zero and six months, another 20% between 7 and 12 months, and, for 23%, cost inflation pressure is not an issue determining survival. BMR and Sacci find the top five current small business challenges to be management of cash flow, inadequate capital, macroeconomic development, supply chain slowdowns and an unconducive regulatory environment. In particular, most participants asked for government intervention in the country’s energy crisis, as electricity outages, or loadshedding, was the topmost cited future concern, alongside the increased cost of goods, increased energy costs and not getting paid by debtors. About 61% of the pilot participants have weak or critical cash positions. About 25% have concerning or unmanageable de...
Engineering News editor Terence Creamer talks about power utility Eskom's decision to halt further diesel purchases for the remainder of its financial year to March 31, 2023; the impact of that decision on loadshedding and the South African economy; the need for a funding solution to ensure Eskom has the funds it needs to buy diesel and run its open-cycle gas turbines to limit the impact of loadshedding; and a suggestion by one analyst that Eskom should abandon its Koeberg life-extension project.
A new report into the progress government is making in implementing the current five-year Medium-Term Strategic Framework, from 2019 to 2024, has confirmed that energy unavailability represents the single biggest risk to doing business in South Africa, by undermining investor confidence and constraining industrialisation. It also concludes that government should commit to “solid timeframes” for the review of the Integrated Resource Plan of 2019 (IRP2019) so that electricity demand projections and generating scenarios are more aligned to prevailing circumstances, which have changed materially since the publication of the IRP2019. Department of Planning, Monitoring and Evaluation (DPME) director-general Robert Nkuna said that, in drafting the report, it became evident that “too many things had happened since 2019” which had affected the relevance of the IRP2019. “So we can’t continue on the same trajectory, including the work that we're doing on the just energy transition, [without these being] factored into the IRP. “So, we are going to be engaging with the department concerned to ensure that we attend to that issue,” Nkuna said, noting that such interactions required Cabinet to first approve the DPME report, a milestone that was achieved two weeks ago. Mineral Resources and Energy Minister Gwede Mantashe has confirmed that the IRP2019 – which is widely considered to include outdated demand, coal fleet energy availability factor (EAF), decarbonisation and technology cost assumptions – would be reviewed. However, no firm timeframe has yet been set for the finalisation of the update, nor for the initiation of public consultations on the plan, which makes specific technology allocations and also outlines by when those technologies should be introduced. Such determinations are activated through the publication of a Ministerial determination and technologies not included can be built only if an exemption is secured from the department, with the concurrence of the National Energy Regulator of South Africa. The DPME report also concludes that the method for procuring electricity from independent power producers should be updated too allow for a consolidation of bid windows and to reduce project lead times. No specifics were provided on what the new procurement framework would involve, but the call for an update comes amid serious procurement delays that have afflicted both the fifth renewables bid window and the so-called risk-mitigation procurement round. INDEPENDENT EAF ASSESSMENT The report also says that an independent assessment of Eskom’s EAF should be undertaken to review the target, the recovery of which is a feature of the energy action plan announced by President Cyril Ramaphosa in July to address intensifying loadshedding. The new Eskom board has set a 75% EAF target, which energy commentators have described as both unachievable and open to manipulation. Eskom executives have dubbed the target as “daunting” and have outlined plans for an EAF recovery to about 60% over the coming year. For the year to date, Eskom’s EAF has slumped to about 58%, with the coal-fleet-only EAF having fallen to about 53%. The slump is central to what has been South Africa’s worst-ever year for loadshedding, the risk of which had increased further in recent weeks as Eskom confirmed that it had exhausted its diesel budget and was nevertheless preparing to move ahead with the extended maintenance of the Koeberg nuclear plant, which would leave it a unit short for most of 2023. Minister in the Presidency Mondli Gungubele said having greater certainty of the EAF was also crucial for the updating of the IRP2019, as the EAF assumption affected the supply/demand outlook. He also argued that, while “Eskom is not a good story” the other components of the energy action plan, which was being overseen by the National Energy Crisis Committee (Necom), were making headway, including the lifting of the current 100 MW ceiling on embedded generation plant. That ...
State-owned freight logistics group Transnet says that is has concluded the evaluation of applications received for sale of rail slots on the Container and Cape corridors, following the initiation of a process on April 1 whereby bids were invited from the private sector for an initial 16 slots. Despite criticism of the design of the slot sales, especially the fact that they would be valid for only two years, Transnet confirmed that it did receive bids by the August 31. However, it did not disclose the number of submissions, nor the identities of the bidders. In a statement issued on November 23, Transnet reported that governance activities were now under way following the completion of the bid-evaluation phase, including the recommendation and final approval of the evaluation outcome for both the Container Corridor (Gauteng to Durban) and the Cape Corridor (Gauteng to East London). “Once the final approval of the outcome has been granted, it will be communicated accordingly,” Transnet said, again without disclosing the number of bids that were evaluated. No specific date was provided for the announcement of preferred bidders, nor was a timeframe provided for how long such bidders would have to achieve financial close. Transnet is, however, under pressure to open up its network to third-party operators owing to the underperformance of Transnet Freight Rail (TFR), particularly on the Container Corridor, and the fact that the reform has been prioritised for implementation under Operation Vulindlela. The 714-km Container Corridor links the Port of Durban to Gauteng both through Transnet’s inland terminals at City Deep, Kascon, Pretcon and Kaalfontein, and several accredited private sidings. Transnet again confirmed that the slot-sale system would operate by means of temporary occupation of sections of the network to enable end-to-end passage of a train, TFR retaining ownership of the network. “The sale of these slots to third-party operators expands the access that Transnet already grants to PRASA, approved Branch Line Operators, the luxury hospitality services provided by Rovos Rail and the Blue Train and Steam Train Operators to the rail network. “In terms of this phase of the project, third party slot access will be valid for a two-year period with a contracting period of 24 months in terms of which the parties will enter into a Third-Party Access Agreement for the period.” Transnet said the first phase will also provide key insights as inputs to the development of a robust policy implementation framework.
JSE-listed Telkom on Wednesday reported a double-digit decline in earnings and flat revenue for the six months ended September 30 amid a tough operating environment characterised by constrained consumer spending and rising operating costs. A sluggish economy, increasing electricity and fuel prices, rising interest rates cycle and high unemployment, which constrained and impacted levels of consumer spending, negatively impacted the group’s performance during the half-year under review. Earnings before interest, taxes, depreciation and amortisation (Ebitda) declined 17.3% to R4.9-billion, with a 4.7 percentage point Ebitda margin decline to 23.4%, during the first six months of the year, owing to flat revenues, changes in the consumer product mix and increased operating expenses, including costs related to loadshedding. A 31.4% increase in the cost of handsets, equipment, software and directories, following higher mobile handset sales of 19.7% and the increase of 73.1% in information technology (IT) hardware and software revenue, contributed to the lower Ebitda. “Total operating expenses increased by 5%. The increase stayed well below inflation. The main contributor to the rise in service costs is expenses to ensure uninterrupted service during loadshedding,” said Telkom Group CEO Serame Taukobong. Service fees increased 21%, driven by a significant increase in diesel expenses, owing to increased loadshedding, and higher advisory fees incurred, mainly attributable to mergers and acquisition-related transactions and key strategic projects. Headline earnings a share contracted 51.9% to 137.2c and basic earnings a share declined 52.5% to 131.6c during the six months to September 30. Telkom reported a 0.7% decline in revenue to R21.2-billion, driven by good traffic growth and an increase in mobile handset and IT hardware and software sales, offset by the impact of legacy product migration and a decrease in fixed, mobile and IT service revenue owing to the strained economic conditions. Telkom’s Consumer division reported a 10.9% increase in mobile customers to 18-million subscribers, with 61.1% of customers using broadband services. Despite a 14.1% increase in mobile data traffic, mobile revenue from external customers remained flat at 2.3%, owing to the changes in the product mix to ensure Telkom retains and grows mobile subscribers, while also retaining its value positioning of providing affordable services. “The plan to stabilise Openserve continues positively, with 65% of revenue now coming from next-generation products and services. The growth in high-capacity links for carriers, an increase in demand for fibre services and growth in enterprise connectivity is also pleasing,” Taukobong continued, noting, however, that despite a 10.8% growth in next-generation revenue, Openserve’s total revenue declined by 4.3%. Openserve continued with its growth trajectory in the fibre market, increasing homes passed with fibre by 35.8% and homes connected with fibre by 33.7%. Openserve currently has the highest homes connected ratio in the country at 46.2%. BCX, meanwhile, reported a 0.8% growth, boosted by a satisfactory 13.7% growth in IT business revenue. This segment was muted for the past two-and-half years as corporates reduced IT spend. Swiftnet experienced a 2.1% decrease in revenue to R660-million, driven by the impact of continued focus on modernisation from mobile network operator (MNO) customers. “We expect modernisation to continue over the next year, coupled with the deployment of new base station sites as the MNOs deploy their respective newly acquired permanent spectrum allocations,” says Taukobong. Management is continuing to explore various options of realising the value of the mast and towers business and will update the market in due course. “During the period under review, capital investment increased by 2.2% to about R3.7-billion, as we continue to focus on investing in fibre and mobile, our key growth areas. We are co...
Altman Advisory director, economist and National Planning Commission (NPC) commissioner Miriam Altman has emphasised the importance of public infrastructure in light of South Africa’s transformation agenda and getting people in houses and closer to transport networks and services, in addition to its role in stimulating the economy. She was participating in the Business Day Dialogues, held in partnership with building materials manufacturer AfriSam, on November 22, with speakers debating whether infrastructure spend can still be a saving grace for South Africa’s economy, given the headwinds facing the industry. The parties unpacked the value chain factors that should be well thought out and managed to achieve a prosperous South Africa and the National Development Plan objectives. Continuing to drive spend with real impact had been a challenge, panel moderator and BASE Media Communications director Alishia Seckam said, in leading the panel discussion. Altman highlighted the single-most important factor in realising impactful infrastructure spend was a capable State and it being a reliable partner. “So much capacity was destroyed during State capture. When you destroy the procurement function, which is vital in infrastructure delivery, you decimate institutions and performance management. “Procurement has to be made a transparent and serious function, with technically capable people at the helm of these processes and decisions,” she stated, adding that the NPC was trying to embed these principles into its suggestions, from how leaders were appointed to how administration was undertaken. She said that, as the procurement functions of national, provincial and municipal governments are strengthened, more structural reforms and infrastructure spend can get in the range of the State’s capability. For Cement and Concrete SA CEO Bryan Perrie, a fundamental problem in the infrastructure sector was that of a lack of accurate statistics and information from the National Regulator for Compulsory Specifications, as well as the dumping of building materials in the country. He explained that, although South Africa had a cement production capacity of 20-million tonnes, it was producing only about 12-million tonnes, according to demand, and yet imports continue coming in. “We have managed to get anti-dumping tariffs for Pakistan imports, but what we need is a general import tariff through International Trade Administration Commission. “We believe that many of these foreign cement suppliers are competing on an unfair basis, since they often do not have to comply with social and labour plans, for example,” Perrie noted, adding that the regulator does not always test all the necessary tonnages, certainly does not share information and ignores complaints lodged. Business Day writer Denene Erasmus noted a common problem in the South African government was that of not implementing what were “excellently drafted” plans. She said that if renewable energy projects, for example, were to fill the 22 000 MW electricity gap from Eskom decommissioning half of its coal-fired fleet by 2035, and spur vital infrastructure development, the State needed to set its own ideologies aside and relax some restrictive rules to allow the private sector to unlock development. To this, Altman responded that it was not ideal to “relax” procurement rules, owing to the country’s localisation and transformation imperatives, and that the State would always be needed in infrastructure developments. She believed the private sector could not effectively undertake all of the country’s necessary development on its own, despite the regular requests for this to happen. AfriSam sales and marketing executive Richard Tomes said the infrastructure sector was plagued by a lack of skills, hence the awarding of contracts to foreign companies by the only entity that was still regularly spending on infrastructure – the South African National Roads Agency Limited (Sanral). He questioned whethe...
Forestry, Fisheries and the Environment Minister Barbara Creecy reports that public consultations on the country’s Just Energy Transition Investment Plan (JET-IP), which was unveiled only days before the start of COP27, should be concluded by mid-February. In a briefing following the conclusion of the climate negotiations that took place in Sharm el-Sheikh, Egypt, Creecy said that the Presidential Climate Commission would help facilitate the consultations, which she said would “fundamentally assist us in shaping the implementation plan”. Responding to criticism over the lack of domestic consultation ahead of the plan’s presentation, in Egypt, by President Cyril Ramaphosa to the Just Energy Transition Partnership (JETP) countries of Germany, France, the European Union, the US and the UK, she stressed the JET-IP required Cabinet approval before it could be released for consultation. She also stressed that the Cabinet had also endorsed the Just Transition Framework, which committed government to refrain from “making decisions around transitions without involving workers and communities in vulnerable sectors”. “On the Friday [November 4] before the opening of COP27, the President handed the JET-IP over to the Presidential Climate Commission to facilitate engagements and we are discussing a process that would probably conclude mid-February,” Creecy said. The JET-IP outlines investments valued at a combined R1.5-trillion that should be made in the electricity, electric vehicle and green hydrogen sectors over the five years from 2023 to 2027 to enable South Africa to meet its climate commitments, stabilise energy supply and cushion vulnerable workers and communities. The plan has been endorsed by all the leaders of the JETP countries, which pledged $8.5-billion to support South Africa’s JET-IP at COP26, which was held in Glasgow, Scotland in 2021. Besides emphasising that South Africa required far more than the $8.5-billion on offer, Creecy reported that Ramaphosa also used his meetings in Egypt to reinforce that South Africa required highly concessional loans and grants to support its transition. “He also indicated that the government of South Africa will now employ a project manager who will be responsible to implement the JET-IP as soon as the Presidential Climate Commission concludes its work on stakeholder consultations.” Hitherto, the Presidential Climate Finance Task Team, headed by Daniel Mminele, had overseen the drafting of the JET-IP, which had already resulted in France’s Agence Française de Développement (AFD) and Germany’s Kreditanstalt für Wiederaufbau (KfW) advancing loans of €300-million apiece to the National Treasury. Both loans had a 20-year maturity, with the AFD loan carrying an interest rate of 3.6%, and the KfW loan 3%. In a recent statement the National Treasury estimated that raising an equivalent loan in the market would have attracted an interest rate of 8.9%. Asked whether any progress had been made on the side-lines of COP27 in attracting additional members to the JETP and expanding the funding pool for the JET-IP, Creecy confirmed that she had held several bilateral meetings with other prospective partners. “I'm not in a position at this stage to announce anything concrete, but I can say there is interest and we do expect, in due course, that we will be able to announce the inclusion of further partners.” The JET-IP would also feature as part of Ramaphosa’s State visit to the United Kingdom of Great Britain and Northern Ireland; the first to be hosted by King Charles III and a visit that includes official bilateral talks with Prime Minister Rishi Sunak. In her overview of COP27, meanwhile, Creecy indicated that South Africa viewed the agreement on the establishment of a fund on loss and damage as a key milestone in light of 30 years of disagreement on the issue. She said a transitional committee had been set up to work on the modalities of the fund with a view to taking a decision at COP28 in 2023. “...
Heavy-duty equipment multinational Barloworld says it will unbundle and separately list Zeda, the group’s integrated vehicle mobility solutions provider. Zeda trades under the Avis and Budget brands in South Africa, as well as ten other sub-Saharan African countries. The unbundling will be implemented by way of listing 189-million ordinary Zeda shares on the main board of the JSE, effective December 13, as well as a pro rata distribution in specie of such JSE-listed Zeda distribution shares for no consideration to holders of Barloworld ordinary shares entitled to receive this distribution on December 19. Moreover, the unbundling will be implemented on the basis that Barloworld ordinary shareholders recorded on the Barloworld share register at 17:00 on December 15 will receive one Zeda distribution share for every one Barloworld ordinary share held. Barloworld explains the pro rata distribution in specie of the Zeda distribution shares will be paid from sources other than 'contributed tax capital' as contemplated in the Income Tax Act and shall accordingly constitute a 'dividend' for purposes of the Income Tax Act. RATIONALE Barloworld is actively pivoting its portfolio towards defensive, relatively asset-light and cash generative industrial sectors, based on a business-to-business operating model. To this end, Barloworld has divested several businesses identified as noncore to its strategic ambition. The board believes that, to separate the business of Zeda through an unbundling will enable Zeda to execute on its own strategy and allow it to operate in a more focused and efficient manner, unshackled by the umbrella of Barloworld’s capital allocation framework. Additionally, the Barloworld board says Zeda will benefit from a fully dedicated executive management team and its own dedicated board of directors. It is expected that the unbundling of Zeda will position it as a distinct sub-Saharan Africa-focused integrated mobility solutions providers and provide enhanced governance, cost of capital and ability to drive a market-leading return profile. For Barloworld, the unbundling marks the completion of its noncore divestiture programme, allows the group to focus on its consumer industries and industrial equipment pillars, and delivers deleveraging of the balance sheet. FINANCIAL RESULTS Barloworld has posted an increase of 48.2% in headline earnings a share to R17.71 for the year ended September 30, from R11.95 (restated) in the prior financial year. Basic earnings per share (EPS) amounted to R10.51 in the reporting year, compared with basic EPS of R13.90 (restated) posted in the prior year. The group’s operating profit from core trading activities increased by 12.8% in the year under review to R3.7-billion, from R3.2-billion in the prior year. Barloworld has declared an ordinary final dividend of 295c apiece for the second half of the year, bringing the total dividend to 460c apiece, and a special dividend of 550c apiece. This compares with total ordinary and special dividends of 437c and R13.50 declared in the prior year, respectively. CEO Dominic Sewala says the group delivered improved results despite some key challenges in the prevailing operating environment, He anticipates headwinds in the short term resulting from the effects of high inflation; however, the Equipment Southern Africa business is well positioned to achieve sustainable growth in the long term, driven by the need for infrastructure development and increased mining activity to support the energy transition to zero-carbon emissions. Barloworld says it continues to manage exposures and risks to its Equipment Eurasia business including a strong focus on addressing the needs of employees through a very uncertain and challenging period, while remaining agile and adaptable to ensure compliance with an ever-changing regulatory environment. Sewala confirms the company has started with cost-reducing measures and right-sizing working capital, in line with some expect...
Cement producer PPC says it is well positioned to benefit from any uptick in South African cement demand given that it has immediate capacity on standby that will require no additional capital expenditure to reintroduce. However, CEO Roland van Wijnen stresses that without a significant increase in infrastructure investments, South African demand is anticipated to remain subdued. “We have two kiln lines – one at Dwaalboom and the other at Slurry – that are literally on standby,” Van Wijnen told Engineering News in an interview. Should these be reintroduced, at least two-million tons could be brought on within weeks, as the group demonstrated was feasible when there was a rebound in demand following South Africa’s Covid lockdowns. Given that cement demand is highly sensitive to fixed capital formation, any recovery is likely to hinge, however, on the implementation of large infrastructure projects. Such large projects had already proved key to supporting a growth in sales for Cimerwa, in Rwanda, in which PPC has a 51% interest. Despite sustained general demand from both Rwanda and from the eastern Democratic Republic of Congo, Van Wijnen said demand had been buoyed further by two large projects, in the form of an airport and a stadium. During the six months to the end of September, Cimerwa delivered its best-ever result, contributing revenue of R771-million, a rise of 43%, and earnings before interest, taxes, depreciation, and amortisation (Ebitda) of R249-million, a 63% increase. Therefore, Van Wijnen described the recent award of large contracts by the South African National Roads Agency Limited as “encouraging”. He also saw the infrastructure-related announcements made by Finance Minister Enoch Godongwana in his Medium-term Budget Policy Statement as a signal of a possible recovery. That said, the group was continuing to pursue protection from cement imports, which it said would continue to "disrupt" the market even should their be a recovery in demand. “We are well placed to supply any increase in demand as the roll-out of the South African government’s infrastructure development plans gain momentum. “At the same time, PPC has a strong financial position to weather the current economic cycle.” During the six months to the end of September, PPC reduced net debt in South Africa and Botswana by R140-million to R935-million. Overall, including PPC Zimbabwe, group net debt reduced to R677-million from R1-billion at the end of March. Stripping out discontinued operations and hyperinflation-afflicted PPC Zimbabwe, revenue rose 9% to R4.2-billion during the period, but Ebitda decreased by 12% to R580-million with margins impacted by significant increases in fuel and other energy costs. Loadshedding in South Africa had a marginal effect on PPC’s cement business, owing to close cooperation with Eskom in managing the cuts, but placed pressure on its aggregates business. Nevertheless, the group continued to pursue its renewable-energy options and Van Wijnen reported that it was likely to conclude a power purchase agreement for wheeled electricity supplied by an independent power producer in the coming four to six months.
Engineering News editor Terence Creamer discusses Eskom's latest updates on loadshedding and its diesel use, as well as Eskom's plans for the recovery of some of its power stations and whether it will be able to deliver on those plans.
The Gauteng High Court has reviewed and set aside an Eskom decision to exclude Babcock Ntuthuko Engineering from contracts to maintain and repair boiler pressure parts and high-pressure pipework across 15 power stations. The contracts are valued at R16.3-billion. The contracts were awarded in October 2021 to Actom and Steinmuller Africa, with Babcock disqualified by Eskom for failing to submit a welding certificate, which the utility described as a “mandatory returnable for evaluation”. In his November 17 judgment, Judge Anthony Millar found the disqualification of Babcock, which had been performing boiler repair and maintenance services at various Eskom power stations since 2003, to be irrational and unlawful. Millar said the tender documentation, which was issued in 2018, was poorly drafted and ambiguous in using the words certificate and certification as synonyms. Given this ambiguity, and the fact that Babcock had made referenced to its ISO 3834 certification in a tender covering letter, the judge ruled that Eskom should have afforded Babcock the opportunity to comply with the submission of the certificate in question. Eskom’s failure to do so, was “procedurally unfair” and made the disqualification of Babcock from consideration in the award “both unlawful and irrational”. The judge did not agree, however, with Babcock’s assertion that Eskom “improperly split” the contract between Actom and Steinmuller, noting Babcock’s own concession that, given the sheer volume work, it was always anticipated that the work would be divided amongst at least three bidders. Millar ordered Eskom to conduct a fresh tender process within two months of the court order and for the closing date of the new tender to be no more than two months from the date of publication. He also ordered that the tender be evaluated within two months of the closing date of the tender, that negotiations with the successful tenderers be concluded one month thereafter and that the award be made within a month of the conclusion of the negotiations. In the meantime, the order declaring the contracts unlawful would be suspended “pending the finalisation of the fresh tender process”.
Ford South Africa remains “actively engaged” with government and its rail arm Transnet to enable vehicle and component transport to and from the Gqeberha port, says Ford Motor Company Africa president Neale Hill. “Frustratingly so we seem to make progress, and then it all seems to retreat. “The development of the southern rail corridor has not kept pace with the commitments and promises we have made, and kept, in terms of investment and expansion.” Ford started production of the new Ranger bakkie at its Silverton plant this week, following a R16-billion investment, without any view of when the southern rail corridor would be able to handle traffic from the Pretoria facility. The plant has increased its capacity to 200 000 units a year, with production expected to reach 150 000 units next year, with around 70% of this volume to be exported. Ford also has an engine plant in Gqeberha, with those engines destined for the export market, as well as the Silverton plant. Ford would also like to ferry imported components and vehicles via the southern rail corridor. Hill says almost 100% of Ford South Africa’s vehicles are currently moved by truck. “Looking at our export numbers, we should have roughly 79 trucks a day [by 2025] on the road transporting cars to Durban if we don’t fix that corridor.” Hill says it is of utmost importance to be able to use rail transport in order for Ford’s Pretoria plant to remain globally competitive in terms of logistics costs. He believes that the volumes are sufficient to encourage Transnet to make the investment necessary in infrastructure and rolling stock, especially when considering that other vehicle manufacturers in Gauteng, such as BMW and Nissan, could also make use of a southern rail corridor. Volkswagen and Isuzu, which are respectively based in and near Gqeberha, could also use the line to move cargo north. Ford wants the southern rail line to run from Gauteng straight into the Gqeberha port, which would mean a limited number of vehicle handlings. Should Ford export via Durban, the vehicles will be off-loaded at Cato Ridge and trucked to the port, which creates a situation where the vehicles are handled multiple times. This generates the opportunity for possible damage to the vehicles. “Also, as a country we cannot rely solely on one port – it is not strategically sound,” says Hill. “Relying on Durban only makes us very vulnerable as a country.” He notes that the southern line will need to double in capacity to handle the vehicle volumes, while there is also a shortage of wagons to ferry vehicles. “Transnet says it doesn’t have the capital to do that, but how do we then move the economy forward? “It could be a private-public partnership,” he adds. “The point is that we desperately need infrastructure expansion if we want this country to move forward.” Hill says Ford has investigated moving its export units through the Maputo harbour in neighbouring Mozambique. However, the problem is that this facility is a dollar-based port, which could leave the car maker vulnerable to exchange rate fluctuations.
The prospect of rapid growth in solar photovoltaic (PV) installations across South Africa will create opportunities for the localisation of supply chains and for domestic manufacturing, a new study commissioned by the South African Photovoltaic Industry Association (SAPVIA) has confirmed. However, the report also underlines the importance of economies of scale and stable and predictable demand for facilitating the investments needed for the manufacture of components such as PV modules, inverters, mounting structures and cables. Unstable demand, precipitated by Eskom’s refusal to sign power purchase agreements with renewables projects procured in 2014, negatively affected South Africa’s nascent solar PV component manufacturing sector. That disruption, which was overcome only in 2018, resulted in company closures and disinvestments. The new publication, written by Urban-Econ, Nikela and Blue Horizon, estimates that South Africa made up about 56% of the 10.3 GW of solar PV installed across African utility-scale plants, commercial, industrial agriculture and mining (C&IAM) sites and households by the end of 2021. While modest in size relative to the 1 TW installed globally, the African market is expected to expand strongly over the coming two decades. For South Africa, the report outlines scenarios for the installation of another 12 GW to 24 GW by 2030. These installations would be across all three market segments, with the pace of growth depending largely on the intensity of loadshedding over the period and the emergence of supportive policy and incentives. To facilitate the price-competitive localisation of PV modules, the report estimates that stable yearly demand of at least 2 GW from the utility market segment and a further 1 GW from the C&IAM and residential segments would be required. Stable yearly demand of at least 1 GW is considered to be the minimum threshold for the competitive domestic production of inverters, solar glass and junction boxes. However, the report also highlights that price-competitive manufacturing is not sufficient on its own, with certain market segments also requiring components to be certified as having been made to the highest and latest international standards. “Until local capacities are further developed and selected products are manufactured in line with the requirements of the markets, the domestic market penetration of key components will remain limited.” The report found the domestic solar PV value chain to be well develop already, with some 750 companies employing about 20 000 people. However, upstream component supply is dominated by foreign brands. Prospects for localisation are also being improve by global dynamics, including the significant demand growth, which together with supply chain disruptions and rising transport costs, have led to sharp price increases in 2002, with PV module prices in the European Union having increased by over 30% this year. The report estimates that current production facilities are able to meet only half of future demand, strengthening business case for localisation. The business case is being boosted further by efforts to ensure that solar PV industries are protected from exogenous shocks, such as supply chain disruptions. The SAPVIA study has been produced ahead of the finalisation of the South African Renewable Energy Masterplan, which aims to identify opportunities to create industrial capacity to supply into the country’s emerging renewable-energy sector. However, it also comes at a time when several independent power producers have raised concern about the ability of domestic manufacturers to support them in meeting the local-content commitments. In an effort to unlock the much-delayed Bid Window Five of the renewable procurement process, government recently ease local content requirements set for PV modules.
The first new Ranger – Job 1 – has been assembled at Ford’s Silverton plant in Pretoria. Production of the new-generation bakkie follows a R16-billion investment in the US car maker’s local operations and at its suppliers. Ford now has three production hubs in its International Markets Group (IMG) producing the new Ranger – the Silverton plant and two plants in Thailand. The company also has completely knockdown operations in Vietnam and Cambodia, with plants in the US and Argentina to begin production next year. Capacity at the Silverton plant has been increased to 200 000 units a year, with 70% of production to be exported to markets such as Europe and Mexico, says Ford IMG operations director Andrea Cavallaro. The Pretoria plant will, however, not realise its full production volume next year, he adds, as the single cab will only enter production around April. Currently only the Volkswagen Amarok and Ranger double cabs are being produced at the plant. Cavallaro is positive, however, that the facility should be able to reach 150 000 units in 2023, as “demand is pretty hot”. He warns though that Europe is expected to face tough economic conditions next year, and that this will most likely dampen the automotive market there. “That will have an impact on what we produce here, but we are still sketchy on what that impact will be – 10%? 20%?” Ford will also have to weigh all of its global production options as Europe has unexpectedly pulled forward the introduction of Euro VII emission standards to 2025. The much stricter standard has the potential to greatly impact South Africa’s new-vehicle exports to Europe, as Europe is the country’s single biggest export market. “It is a bit of a strange announcement, and we’ll have to see what engineering is required to meet all of those conditions,” Cavallaro tells Engineering News Online. “They have changed the conditions and brought it forward.” He confirms that Ford is working on a Ranger plug-in hybrid, which will, from its inherent engineering, be able to meet more strict emission standards. “Europe is really important for us,” says Cavallaro. “And with our production footprint globally we have the flexibility to move things around.” He is quick, however, to calm any fears about South Africa’s production future. “We have invested here and the last thing we would do is not use the capacity here.” Cavallaro does, however, emphasise that Silverton will have to deliver a sustained quality assembly effort going forward, as will the operation’s component suppliers. As for the continued loadshedding rounds the South African manufacturing sector is forced to face, Cavallaro says Ford’s manufacturing operations in Pretoria and Port Elizabeth appear to be cushioned from the effects of Stages 1 to 4, but not Stage 5 and onwards. Therefore, Ford is steaming ahead with its plans to reach grid independency by 2025, with some serious planning to achieve this expected in the next 12 months. A first phase of solar power, already implemented, will be followed by a second stage, which should address around 35% to 40% of Silverton’s energy needs, says Cavallaro. Phase 2 will also include battery solutions, as the plant now runs 24 hours a day in a three-shift operation. The next phases will look at other renewable sources, such as biogas. New Plant Ford’s revamped Silverton plant boasts an on-site stamping plant, a new, highly automated body shop, a Ford-owned and operated frame line, and refreshed vehicle assembly operations on the trim, chassis and final line. The expanded plant added 1 200 new jobs for a third shift, in order to support increased production volumes. This takes the workforce at Ford South Africa to 5 500 employees. Ford’s supplier network benefitted too, with around 10 000 jobs added across the value chain. A total of 873 751 previous-generation Rangers were produced at the Silverton plant. Out of these, nearly 603 000 units were exported to more than 100 global markets, with 271 00...
The City of Cape Town’s Metal Theft Unit, also known as the Copperheads, says it aims to double the amount of copper confiscated year-on-year. The unit has already confiscated 2 489 kg of mixed copper and 252.5 m of cable this year. In 2021, the unit retrieved 1 278 kg of mixed copper and 406.5 m of cable. “This translates to millions of rands in infrastructure vandalised and destroyed,” says Safety and Security MMC JP Smith. “Metal theft impacts not only services and infrastructure, but also the health of those residents in the areas where thieves burn their looted plasticised cabling to get at the wires. “Doubling the amount of copper seized is not the only achievement of the unit,” adds Smith. “From July to September this year they've done more than five times the number of operations, and inspected double the number of scrapyards or bucket shops compared to the same time last year.” The current street value for copper is R120/kg, which means this year's confiscated haul is worth an estimated R298 680. “Metal and cable theft takes place across the city and the number of complaints increased from 124 to 145 for this time period,” says Smith. “Residents are tired of this crime which threatens their well-being. They realise that this money could be spent on improving basic services and is instead being used to replace stolen infrastructure such as manhole covers, fire hydrants and water meters.” Some of the unit's recent successes were in August when they retrieved metal valued at R10 623 in street value. In a second incident a repeat offender was found in possession of cut-up city drain covers weighing 238 kg. While executing a search warrant for a storage facility in Philippi, officers also made a successful arrest and recovered around 540 kg of copper cable.
It seems unlikely that the supply-chain issues in the global automotive industry will be resolved in the next year, says Volkswagen passenger car brands global CEO and former Volkswagen South Africa (VWSA) boss Thomas Schäfer. He notes that the semi-conductor shortage is “still not over”, and that industry faces “incredible disruptions” in the global supply chain. There are supply-chain choke points to and from China, as the country persists with lockdowns to execute a zero-Covid policy, with the logistics industry in Europe facing a shortage of truck drivers as many drivers from the Ukraine have been pulled into the war with Russia. Schäfer says Volkswagen has seen cancelled shipments and plant shutdowns worldwide owing to strained supply chains, also in South Africa, despite a situation of “incredible demand”, with order books filled up “to next year”. He notes that the German car maker receives supply reports on roughly 80 000 parts every week to determine which parts are available and which parts are in short supply, to see “if we can build cars, or not”. Sometimes the manufacturer has to scramble to find an alternative supply source for a particular part, as a vehicle cannot be completed without 100% of its parts. Schäfer says this is a situation unlike anything he has ever experienced before, with “everyone’s nerves a bit raw at the moment”. He also expresses concern about a possible economic storm brewing in Europe as high inflation and rising interest rates do not bode well for the near term. Europe is South Africa’s biggest new-vehicle export market. VWSA produces the Polo and Polo Vivo for the local and export markets. Schäfer spoke during a media conference on a recent visit to South Africa.
Statistics released by the Council for Scientific and Industrial Research (CSIR) underlined how significantly loadshedding has intensified during 2022, which is the first year that the majority of the rotational cuts have been implemented at Stage 4, representing 4 000 MW of simultaneous cuts. It is also the first year since 2019 that Stage 6 loadshedding was implemented, and for far longer periods (nearly ten times longer) than was the case three years ago. The publication, released amid ongoing loadshedding by Eskom, shows that more rotational cuts were implemented in the three months from July to September than in any previous full year since the introduction of loadshedding by Eskom in 2007. It also confirms that there was more loadshedding in September alone than during 2020 as a whole. Produced by Warrick Pierce and Monique Le Roux, the publication shows that 5 761 GWh of energy had been shed by the end of September, and 1 949 hours disrupted. Loadshedding contributing the lion’s share of the 4 315 GWh of demand-side response implemented during the nine-month period, with the balance arising from interruptible contracts. In 2021, previously South Africa’s worst-ever year for loadshedding, 2 521 GWh of energy was shed and 1 169 hours disrupted. The intensification of loadshedding during the year led to the July 25 announcement by President Cyril Ramaphosa of a series of interventions to address ongoing power cuts, including the establishment of a National Energy Crisis Committee (Necom). Three priority levers were identified to close the prevailing supply/demand gap, namely: improving the performance of Eskom’s coal fleet; procuring additional capacity from the non-Eskom sources of supply and scaling up demand-side management. To support the stabilisation for the system Necom is also targeting the procurement of a further 2 295 MW during the coming 12 months, which could arise from ongoing and emergency procurement programmes, as well as imports from the region. Some 1 450 MW of demand reduction is being targeted through various interventions, including power alerts and other measures to change consumer behaviour. Recent market reform allowing embedded generation plant, initially below 100 MW in size, but eventually of any size, is expected to unlock further private supply, as is an Eskom initiative to lease grid-ready land parcels to independent power producers and generation investments by municipalities. Eskom, meanwhile, expects to add 2 200 MW over the coming year from interventions primarily at six coal stations, namely Tutuka, Kendal, Duvha, Majuba, Matla and Kusile. The maintenance effort will seek to decrease unplanned outages, which have contributed to the fall in the fleet energy availability factor (EAF), while commissioning the remaining new-build units, while addressing defects. The CSIR statistics confirmed that the EAF of the entire Eskom fleet continued to decline in 2022, with the average weekly EAF for the year to date having fallen to 59.1% from 61.7% in 2021 and 65% in 2020. The CSIR attributes the decline in the EAF largely to the increase in unplanned outages experienced by Eskom and also suggests that there has been a “flattening out” of the EAF during the year. The capacity factors of the coal and nuclear plants both fell to 52.4% during the first half of 2022, having been 55.7% and 53% respectively in the corresponding period of 2021. The statistics analyse by the CSIR cover all utility-scale generation technologies, including coal, nuclear, hydro, solar photovoltaics (PV), onshore wind, concentrated solar power (CSP), pumped storage and diesel-fuelled open cycle gas turbines. They show that during the first half of 2022, the total system demand was similar to the year before, but still 3 TWh (2.5%) below the pre-Covid lockdown levels of 2019. Coal continued to dominate the South African energy mix, meeting more than 80%, or 113 TWh, of the total system load. The contribution of wind, solar PV...
Built environment professionals organisation the South African Institution of Civil Engineering (SAICE) has released its '2022 Infrastructure Report Card (IRC)', which gives the country's infrastructure an average rating of D, on a scale of A to E, with A being world-class infrastructure and E being failed or failing infrastructure. The D rating means that the infrastructure is not coping with normal demand and is poorly maintained, with risks of any incidents having severe impacts on operations. However, the report authors emphasise that: "[w]ith the notable exception of energy generation, South Africa's economic infrastructure remains in a satisfactory (or better) condition. "However, social infrastructure continues to deteriorate," they state. It is important to note that there is a difference between social and economic infrastructure, said SAICE 2022 IRC convenor and former SAICE president Sam Amod. "If we do not invest enough in social infrastructure, but have good economic infrastructure, the wealthy get wealthier and inequality gets wider. Unless we invest in social infrastructure properly, people will not have the mobility to find jobs and keep jobs, and we will not keep them healthy and educated, as examples," he said during the launch of the document. While the quality of national roads has improved dramatically, rated at B+ or future fit, up from a C rating previously, paved roads in urban areas have deteriorated from a C rating down to a rating of D, and other municipal paved roads have remained at a D- rating. By contrast, airports, ports, oil and gas pipelines and heavy haul freight lines are rated at B or B-, albeit that heavy haul freight and airports deteriorated from A- to B-, and fishing harbours have improved from a C rating to B. In terms of social infrastructure, public schools have remained at a rating of D, while public hospitals have deteriorated from a C rating to a D+ and clinics have dropped from a C- rating to a D rating. Similarly, passenger rail lines have deteriorated from a C- to an E rating, which means the infrastructure is unfit for purpose and either has failed or is on the verge of failing. "Infrastructure is at the centre of what we do socially and economically and has a direct impact on development. We often get asked why we produce this IRC. If we do not measure the quality of infrastructure, we cannot manage it, and if we do not have transparency, we will not have informed citizens able to make good decisions about what they want to do as citizens," said Amod. Similarly, infrastructure delivery and management play an important role in addressing the triple challenges of inequality, unemployment and poverty, he noted. "It is essential for SAICE to produce this IRC on a regular basis to encourage us to look after our infrastructure and to keep citizens informed about the status and trends of their infrastructure, and to highlight areas of excellence," SAICE IRC steering committee member Errol Kerst agreed. At the inception of the IRC in 2006, South Africa's overall infrastructure rating was D+. With investment for the World Cup 2010, the rating improved to C- in the 2011 IRC. However, since this peak, the trend has been downwards, falling to D+ in 2017 and a D in 2022, said SAICE president Professor Marianne Vanderschuren. "We need to be more aware of our infrastructure and the investment and maintenance or lack thereof, as, without infrastructure, the economy and society cannot function," she said. Out of the 32 infrastructure subsectors rated in the 2022 IRC, there was only one A rating (for the Gautrain), eight B ratings and six C ratings. There were also 13 D ratings and four E ratings. "This means more than 50% of the infrastructure is at risk of collapsing or has collapsed. We need to take action as soon as possible. We should have started," she highlighted. South Africa needs engineers, technicians and technologists and needs to encourage young people to remain in the country....
The City of Cape Town council has approved a contract with the Department of Water and Sanitation (DWS) that proposes boosting water supply to the metro by 40-million litres of drinking water a day from 2024/25. This investment, which is estimated to cost more than R2.3-billion over 20 financial years once the contract is in effect, puts in action what the city says is its “commitment to prioritising water security for its residents in the face of future droughts”. The city says it is “making every effort” to ensure that its new water programme, as outlined in the city's water strategy, which is currently being executed, remains on track to produce about 300-million litres more water a day by 2030. The metro believes that the Berg River to Voëlvlei Augmentation Scheme (BRVAS) is an important component of this strategy to help ensure long-term water security to navigate future climate shocks and droughts. The Western Cape Reconciliation Strategy Study, developed by DWS, identified the need to augment the Western Cape water supply system. A detailed feasibility study found that BRVAS would be the most cost-effective solution, producing an additional roughly 63-million litres of water a day and increasing the yield by about 4.5% once completed. The city's allocation from the scheme will be 40-million litres of water a day. In order to secure an allocation of water from the scheme, the city had to conclude a 20-year water supply agreement with DWS. “This long awaited water scheme will hopefully now proceed to the implementation phase as soon as practically possible,” says the city council. This scheme will involve the pumped abstraction of water in the winter rainfall months from the Berg river to increase the yield of the Western Cape water supply system by around 23-million kilolitres a year; a low-level weir and pump station located at the Lorelei site on the Berg river; and a 6.3-km-long pipeline to deliver the water from the Berg river into the Voëlvlei dam. The pipeline will be designed for reverse operation during summer, so that releases can be made from the Voëlvlei dam to the downstream municipal and agricultural users. The scheme will also ensure the implementation of the ecological water requirements for the estuary. “The city's climate change modelling indicates that over the next 30 years, the Western Cape water supply system's yield will decrease by 25%,” says acting Water and Sanitation MMC Siseko Mbandezi. “For this reason, the city is very excited to be entering into this agreement with DWS because BRVAS is an important component of the city's water strategy.” Mbandezi adds that Cape Town is in a water-scarce region and that the city has to investigate diverse water sources such as desalination, reuse and groundwater. “Diversifying our water sources will reduce the city's current dependence on rain-fed dams as the main source of water.”
The European Investment Bank (EIB) has extended a €200-million loan to the Development Bank of Southern Africa (DBSA) to support the delivery of 1 200 MW of distributed renewables generation by private investors. The financing package, which is the largest-ever extended by the EIB to South Africa, was signed on Friday by EIB VP Ambroise Fayolle and DBSA CEO Patrick Dlamini on the side-lines of COP27 in Sharm El Sheikh, Egypt. The funding will reportedly unlock €400-million, or R7.2-billion, of new private renewables projects across South Africa and contribute to DBSA’s Embedded Generation Investment Programme (EGIP), which is co-financed by the Green Climate Fund. The terms of the funding were not immediately disclosed. DBSA’s EGIP supports the development and upscaling of solar photovoltaic and wind embedded generation projects, developed by independent power producers. The market has gained momentum following reforms allowing for projects below 100 MW to proceed without a licence and the South African government is in the process of updating the regulations further so as to eliminate the cap entirely as part of a series of initiatives unveiled on July 25 to tackle intensifying loadshedding. Besides adding 1200 MW of distributed generating capacity the projects will avoid 3.6-million tonnes of carbon emissions once operational. Speaking at the signing ceremony, Dlamini said the bank had a clear goal to increase investment in renewable energy, improve energy security and advance the country’s just energy transition. “This new investment from the EIB in our Embedded Generation Investment Programme is an important contribution to South Africa’s resilient and sustainable growth,” Dlamini said, adding that it would complement the Just Energy Transition Partnership between South Africa and several developed countries as well as the European Union. Confirming the package to be the largest-ever EIB investment in South Africa, Fayolle highlighted that it followed on from the bank’s past support for the DBSA, comprising 11 projects since 1995, including support for renewable energy and climate adaptation projects. “EIB Global is pleased to build on three decades of partnership with DBSA to boost renewable energy generation which will contribute to energy security and a just transition in South Africa,” he said. The financing would be available for solar photovoltaic and onshore wind energy generation, as well as potentially for energy efficiency projects promoted by the private sector.
Engineering News editor Terence Creamer reflects on developments this week with regard to South Africa's unveiling of its Just Energy Transition Investment Plan, or JET-IP; the high-level support received for the JET-IP at COP27; the funding that has started to emerge as a result; and what is likely to happen next in terms of the country's energy transition.
The National Treasury has released details of what it describes as “highly concessional” loans with a combined value of €600-million, which are the first to be advanced under the $8.5-billion Just Energy Transition Partnership that South Africa entered into with several developed countries in 2021. The €300-million apiece loans were concluded this week with France’s Agence Française de Développement (AFD) and Germany’s Kreditanstalt für Wiederaufbau (KFW) with the proceeds flowing directly to the National Treasury. In a statement the National Treasury reported that both loans had a 20-year maturity, including five-year grace periods. The AFD loan carried an interest rate of 3.6%, equivalent to a six-month Euribor plus 129 basis points, while the interest rate on the KfW loan was 3%, equivalent to a six-month Euribor plus 129 basis points. “The estimated cost for the government of South Africa to raise an equivalent loan today in the market would be around 8.9%. “This estimate is based on a fair value estimation of South Africa’s foreign currency bonds relative to the risk-free rate, secondary market activity and historical issue spreads,” the National Treasury said in a statement. It also reported that both loans were sovereign loans that take the form of non-earmarked budget financing that is transferred directly into the National Revenue Fund of South Africa. “These loans are in support of the policy and institutional reforms undertaken by the government of South Africa in support of its just energy transition. “The loans are highly concessional as their terms are substantially more generous than what the government of South Africa would be able to raise in capital markets.” The National Treasury added that replacing market lending with much cheaper concessional loans, allowed South Africa to reduce its cost of funding and overall debt burden, which was advantageous given the high interest rate environment and in a context where South Africa had a high debt stock. “By lowering debt service costs, the government of South Africa creates more fiscal space for critical social and other priorities.” The National Treasury added that the just energy transition could attract investment, create new industries and jobs, and help South Africa to achieve energy security and climate resilience. “South Africa requires more support for its just energy transition given the large scale of the required transition in the context of the current socioeconomic challenges and will therefore continue discussions with various multilateral lenders in pursuit of this objective.” The recently released Just Energy Transition Investment Plan, or JET-IP, points to an investment requirement of R1.5-trillion over the coming five years to support a shift from coal to renewables in the electricity sector, as well as to facilitate electric vehicle manufacturing and green hydrogen production.
The International Partners Group (IPG) of France, Germany, the UK, the US and the EU jointly endorsed South Africa’s Just Energy Transition Investment Plan (JET-IP) during the World Leaders Summit at COP27, which took place at Sharm El Sheikh, Egypt, on November 7. Engineering News editor Terence Creamer spoke to Presidential Climate Finance Task Team head Daniel Mminele about the significance of the endorsement and what it means for both the mobilisation of the $8.5-billion Just Energy Transition Partnership (JETP) funding package and South Africa’s far larger $99-billion (R1.5-trillion) JET-IP, which is proposed for implementation over the coming five years to 2027. Terence Creamer: Could you reflect on the significance of the IPG’s endorsement of South Africa’s JET-IP? Daniel Mminele: It is a very pleasing development in the sense that we have seen emphatic endorsements from all the leaders – UK Prime Minister Rishi Sunak, US President Joe Biden, French President Emmanuel Macron, German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen – who made very strong comments in support of South Africa's plan. With the work that we have undertaken since the announcement that was made at COP26, we have essentially refuted some of the narrative that was being pushed, which was that we weren't going to make our deadline of being able to provide a substantive update by COP27. The feedback that we received in Sharm El Sheikh is really encouraging and people are continuing to refer to the potential for this JET-IP to serve as a model, or as a benchmark, for other countries to follow. As you know, the plan that has been developed is South African-owned and South African-led, and it makes sure that South Africa-specific ambitions and priorities are taken care of and that the plan overall is aligned to our international decarbonisation commitments, while at the same time speaking to the need to put us on a new, inclusive and thus sustainable growth and development path. Reference is made in the IPG statement to the fact that the funding will be dispersed using various mechanisms, including grants, concessional loans and risk-sharing instruments. How will these flows actually take place and will it all be managed through the National Treasury? There will be a multitude of disbursement mechanisms, which actually will inform much of the next part of the work that we need to do. Right at the outset, we defined a set of principles, about nine of them, that would guide us in how we would put the financing package together. One of the principles is that the financing flows from the partner countries should be certain and predictable, so as to avoid any delays. Another one was that they should take advantage of the capacity and the capability that exists within South Africa by, for instance, involving our own development finance institutions (DFIs), such as the Development Bank of Southern African and the Industrial Development Corporation. That is the kind of work that we will now need to get into more granularity. But in principle, the potential implementation partners through which funds will flow is clearly government, or the National Treasury, but also other implementing institutions such as the DFIs, State-owned enterprises, the private sector and other social partners. So, there’ll be a multitude of implementing partners, but it’s fair to say that the bulk of it will come through the fiscus. When you say a principle of ‘certainty and predictability’ of the flows should apply, how will that be realised? The political declaration that was signed in Glasgow giving rise to the JETP indicated that these countries were committing to mobilise an initial amount of $8.5-billion over the initial period of three to five years, subject to concurrence on an investment framework, which is essentially what we've put on the table now with the JET-IP. So, there are certain elements of the financing package that couldn't be suffi...
The French and German development banks, AFD and KfW, have signed agreements with the South African government to each extend €300-million in concessional financing to support the country’s transition to a cleaner energy system that is less reliant on coal. The €600-million is the first to be confirmed under the $8.5-billion Just Energy Transition Partnership (JETP) announced at COP26 in November 2021, and follows the publication by South Africa of the Just Energy Transition Investment Plan (JET-IP) ahead of COP27, which is currently under way in Sharm El Sheikh, Egypt. The JET-IP was officially endorsed by the JETP international partnership group of France, Germany, the UK, the US and the European Union (EU) on November 7, opening the way for the flow of funds under the $8.5-billion funding package, comprising: $2.6-billion from the Climate Investment Funds Accelerating Coal Transition Investment Plan; $1-billion from France; $1-billion from Germany; $1.8-billion from the UK; $1-billion from the US; and $1-billion from the EU. The funding package will be disbursed through various mechanisms over a five-year period including grants, concessional loans and investments and risk sharing instruments and will be directed towards projects outlined in the JET-IP. The AFD and KfW financing agreements were signed at a ceremony held on the side-lines of COP27 and attended by President Cyril Ramaphosa, President Emmanuel Macron and Chancellor Olaf Scholz. The funds will flow directly to South Africa’s National Treasury, whose acting director-general Ismail Momoniat immediately welcomed the concessional funding from AFD and KfW. While South Africa still required more support for its R1.5-trillion ($99-billion) five-year JET-IP, Momoniat said the funding would play a catalytic role and would contribute to government’s efforts to mitigate rising government debt costs. In a joint statement, the French and German governments said the signing represented a significant milestone in the implementation of the JETP and the mobilisation of the initial $8.5-billion over the next three to five years. German Ambassador to South Africa Andreas Peschke said the agreements represented a “concrete implementation of our partnership”, while French Embassy Chargé d’affaires Arnaud Roux said the loan translated Macron’s words of support for South Africa's decarbonisation programme “into actions”. Ahead of COP27, the World Bank Group approved a $497-million financing package for the ‘Komati Just Energy Transition Project’ to be financed jointly through a $439.5-million World Bank loan, a $47.5-million concessional loan from the Canadian Clean Energy and Forest Climate Facility, and a $10-million grant from the Energy Sector Management Assistance Program.
In a surprise development, JSE-listed Murray & Roberts (M&R) announced on Tuesday that it will sell it entire shareholding in Clough Limited to Italian construction multinational Webuild for A$350-million, or about R4-billion. The company, which has undergone a major reorganisation over the last number of years, resulting in it exiting the South African general construction market in 2016, had been trading under a cautionary since October 17. That cautionary announcement noted that the group’s working capital requirements were particularly acute for its energy, resources and infrastructure (ERI) platform, the group’s largest platform which trades under the Clough brand. In fact, Clough made up R37.2-billion of M&R’s R59.5-billion order book as of the end of June. The cautionary indicated that project cashflows had been dislodged by Covid-related disruptions, along with the need for additional working capital arising from the margin deterioration on the Traveler and Waitsia projects. In a statement announcing the proposed sale and purchase agreement with Webuild M&R CEO Henry Laas reported that the group had reviewed several strategic options to address Clough’s urgent working capital needs, and the M&R board had concluded that a transaction with Webuild was the preferred course of action. ““This is a critical step, as the ERI platform is in immediate need of a significant cash injection to service their order book and commercial commitments, which Murray & Roberts is not able to provide,” Laas said. Should the proposed transaction be concluded, the ERI platform will become part of Webuild and M&R will have no residual exposure to Clough. M&R will retain its two other business platforms: a multinational mining platform and the sub-Saharan Africa-focused power, industrial & water platform. In terms of the transaction agreement, the financial benefit of the proposed transaction is achieved through the cancellation of an outstanding intercompany loan account between Murray & Roberts Pty Ltd, the group’s Australian holding company, and Clough, and a cash payment of A$500 000 to M&R by Webuild. The intercompany loan in favour of Clough originated through the buy-out of the minority shareholders by M&R in 2013. In conjunction with the potential transaction, Webuild will establish an interim loan facility of A$30 million for the benefit of Clough, which will allow Clough to continue trading until closing of the potential transaction. M&R said in a statement that full details of the proposed transaction and the interim loan would be released soon, as required by the JSE Listings Requirements for a Category 1 transaction. The sale and purchase agreement is subject to the fulfilment and/or waiver of a number of conditions precedent, including obtaining the requisite regulatory approvals in Australia and third-party consents, as well as continuing obligations typical for a transaction of this nature. M&R’s share price, which slumped when the cautionary was issued, was trading more than 27% higher at R5.90 a share directly following the announcement. Chronux director Rowan Goeller tells Engineering News that, while the Australian media had been hinting at the deal for some time, the pace at which it had materialised was nevertheless surprising. Goeller said the positive market reaction could be ascribed largely to the “clean break” that the deal would offer M&R from Clough, which had an immediate liquidity requirement of about R2-billion, which M&R would have struggled to raise. “I don’t think it would have been impossible for Clough to trade itself out of this situation, which is why Webuild has stepped in with this offer. “However, South African companies don’t have a great track record in Australia and M&R’s decision to make a clean break is definitely a lower-risk option.” That said, Clough did represent the restructured M&R’s main growth engine, with the international mining and the Southern Africa-focused construction units not in...
The Gauteng High Court has set aside the National Energy Regulator of South Africa’s (Nersa’s) most recent evaluation of Eskom’s regulatory asset base (RAB), a decision that has potential significant implications for a pending tariff determination. The State-owned utility took the regulator’s RAB decision on legal review after Nersa more than halved Eskom’s RAB to R551-billion relative to the R1.25-trillion outlined in its revenue application for the 2022/23 financial year. The cut in the RAB contributed to the Energy Regulator’s decision to approve a 9.61% hike for 2022/23, which was less than half the 20.5% hike for which Eskom had applied. While the order will have no retrospective effect, the court has instructed Nersa to re-determine Eskom’s RAB for subsequent years, with implications for the tariffs to be applied in 2023/24 and 2024/25. That tariff decision, which is currently under adjudication by Nersa following recent public hearings, was initially expected by November 7, but the regulator has until December 24 to make a determination in line with a timeline stipulated in a separate court order. Eskom has applied for a 32% hike from April 1; an increase that includes 10.67% to “correct” the depreciation figure that was affected by the cut of the RAB, as well as a further 2.85% to “correct” the return on assets amount. The actual outcome will depend on what Nersa determines the RAB to be, however. The High Court order also outlines the specific steps that the regulator needs to take to re-determine the 2022/23 RAB, including that: only commissioned assets be included in the replacement cost determination and that assets under construction be valued at book value, excluding capitalised interest during construction until they can be transferred to the commission-asset category; the regulator reverses a flue gas desulphurisation adjustment incorrectly made in its earlier decision; the accumulated depreciation adjustment be made to reflect the correct remaining useful lives of the power stations to ensure that they do not have negative RAB values; the correct remaining useful life of each power station is used when the roll-forward depreciation is calculated; Nersa comply with the multiyear price determination methodology with regards to energy availability factor adjustments for Eskom generators; the completed generation, transmission and distribution asset value not included in the RAB of 2022/23 be included; and the book value, excluding capitalised interest during construction, of all assets under construction be used in the RAB determination. Once the RAB value is determined, the completed assets will need to be depreciated. In the disputed RAB of 2022/23, depreciation of R42-billion was approved against Eskom’s request for more than R60-billion.
The Department of Mineral Resources and Energy (DMRE) has confirmed that the deadline for outstanding projects named as preferred bids under both the risk mitigation and bid window five (BW5) of the renewables programme has yet again been extended, beyond the October 31 deadline communicated previously. In response to questions posed by Engineering News regarding the status of the projects and whether the bid bonds had been called, the department said it had received representations from the remaining 22 preferred bidders under BW5, as well as the eight preferred bidders selected under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) regarding their readiness to sign the necessary agreements. “The department and respective stakeholders, including the IPP Office and Eskom, are consolidating the various proposals and will make announcements regarding signing arrangements over the coming weeks,” the DMRE said in a written response, adding that no bid bonds had been cancelled. “The department is engaging with each preferred bidder with regard to project readiness and timelines provided towards legal closure. “It is anticipated that the signing of the next projects will take place during November 2022. “Obviously, we are still in a procurement process and project-specific information including details around the signing can only be announced once all governance processes have been concluded.” Confirmation of the further extension came as the National Energy Crisis Committee (Necom) released an update on the Energy Action Plan announced by President Cyril Ramaphosa on July 25. The report indicated that the signing of agreements for additional projects from BW5 and the RMIPPPP was being prioritised. The other priorities outlined in the Necom progress report, dated November 2, included: publication of the final amendment to Schedule 2 of the Electricity Regulation Act to remove the licensing threshold for embedded generation projects, which currently stands at 100 MW; the further streamlining of regulatory processes to reduce timeframes and run processes in parallel where possible; the release of the request for proposals (RFP) for battery storage; a launching of the standard offer and emergency generation programmes, through which Eskom believes 1 000 MW could be immediately secured; the launch of the Enhanced Demand Response Programme and national campaign to encourage energy efficiency; the submission of the Electricity Regulation Amendment Bill to Cabinet for tabling in Parliament; and the finalisation of the Omnibus Bill to remove impediments to energy projects, including the enabling of access to servitudes for transmission infrastructure. The DMRE said the battery storage RFP was awaiting final governance approvals after which it would be released to the market. The latest deadline extension also meant that only the three Scatec projects, signed under the RMIPPPP on June 2, had reached financial close and had entered construction following the restart of procurement in 2021 after a seven-year disruption, precipitated by a refusal by the previous leadership at Eskom to enter into new power purchase agreements on the basis that the utility had surplus capacity. Subsequently, South Africa entered into an intensive and sustained period of loadshedding and Eskom has indicated that the country has a supply shortfall of between 4 000 MW and 6 000 MW, which would have been significantly larger had the economy started growing strongly after the Covid contraction. The DMRE said that the three EDF wind projects signed on September 22 under BW5 were “scheduled to reach commercial close within the next week and financial close soon thereafter”. Together the six projects that have signed to date have a combined investment value of R27-billion, a combined capacity of 570 MW and are obliged to enter into commercial operation within 18 to 24 months from financial close. The DMRE said the delays would not affect ...
Certain Volvo models will feature bidirectional charging – meaning they can be used to power a home. The first of these models is the soon to be revealed fully electric EX90. Volvo Car South Africa MD Greg Maruszewski says bidirectional charging is especially significant to South Africans because of loadshedding. “This South African challenge means that our customers will be especially receptive to a feature such as this.” With bidirectional charging, electric cars have the potential to contribute to easing energy demand while plugged in, and, together with many other electric cars, they can even form a virtual powerplant. “Paired with smart-charging capabilities coming to the Volvo Cars smartphone app, the Volvo EX90 will allow motorists to charge their cars when demand from the grid is low and save that stored energy to be used later. ‘Later’ could obviously mean the point when loadshedding kicks in,” explains Maruszewski. In practice, during loadshedding, the Volvo EX90 could power a number of appliances in a home – from power tools to a music system, he says. “With the Volvo EX90 you can power your life,” adds Volvo Cars electrification ecosystem head Olivier Loedel. Along with being able to charge appliances and other devices, the car will ultimately also have the capability to lend a helping hand and give some of its charge to other compatible Volvos. On the flip side, if you, as the driver, are about to run out of juice, don’t worry. You can accept the same help from other Volvo cars. Where available, the entire charging process will be automatic and managed by the charging functionality in the Volvo Cars app. The underlying algorithm also makes sure that you charge and discharge the battery in a limited way, reducing the risk of battery degradation. Depending on rules specific to each energy market, bidirectional charging could also allow customers to support the grid in different ways. This could include taking in more energy during times when there is a surplus of renewable energy, or selling energy back during peak hours when there is more demand. Maruszewski says Volvo plans to offer the hardware needed to start using bidirectional charging features, including an advanced wall box and home energy management system. “Other accessories such as adapter plugs for appliances and cables for charging other cars will also be available. “The bidirectional charging offer will initially be launched in selected markets. When South Africa [becomes] one of those markets, this will be communicated to local customers.”
Engineering News editor Terence Creamer discusses the $497-million loan extended to South Africa for the repowering and repurposing of the Komati power station; the main elements of the repowering and repurposing project; and whether this is the start of a funding trend for South Africa's energy transition.
South Africa’s request for a $497-million (about R9-billion) to decommission and repower the Komati coal-fired power plant using renewables and batteries has been approved by the World Bank Group board of executive directors. The last Komati unit was shut at midday on October 31, signalling what Eskom said would be the start of a repowering and repurposing of the site into a renewables, storage, manufacturing and training hub. In a statement the bank said that the ‘Komati Just Energy Transition Project’ would be financed jointly through a $439.5-million World Bank loan, a $47.5-million concessional loan from the Canadian Clean Energy and Forest Climate Facility, and a $10-million grant from the Energy Sector Management Assistance Program. The repowering of the plant will involve the installation of 220 MW of clean energy solutions, including 150 MW of solar photovoltaic and 70 MW of wind, supported by 150 MW of batteries. The World Bank said the project would also create opportunities for affected workers and communities, with Eskom having already established a containerised micro-grid assembly factory at Komati and having recently signed a partnership agreement with the South African Renewable Energy Technology Centre of the Cape Peninsula University of Technology, and the Global Energy Alliance for People and Planet to develop a Komati Training Facility. The financing announcement follows closely on the release of the ‘South Africa Country Climate and Development Report' by the World Bank, which estimates that South Africa’s transition to net-zero will require total incremental financing of R8.5-trillion to 2050 and that the funding gap could be closed only with the support of external resources. The report also reiterated that renewable energy represented the quickest and cheapest pathway out of South Africa’s long-running electricity crisis and that two to three more jobs would be created by pursuing such a pathway when compared with the 300 000 jobs that are likely to be shed in high-emitting sectors. It did warn of a timing and spatial mismatch in the labour market, however, and indicated that government interventions would be required to assist vulnerable workers. The financing package also follows a statement by Finance Minister Enoch Godongwana reaffirming his commitment to the government’s Just Energy Transition framework, after having made comments earlier in the week that were interpreted as being pro-coal, gas and nuclear. He denied that the National Treasury's plan to take over a portion of Eskom's debt would be conditional on the utility investing in such technologies. Details of the debt transfer, which will involve between one-third and two-thirds of Eskom’s R400-billion debt, would be announced in the February Budget. The finance package was also announced only days ahead of the start of the COP27 climate talks scheduled to take place in Egypt and where South Africa is expecting to unveil a Just Energy Transition Investment Plan, or JET-IP, which could help unlock $8.5-billion in climate financing, primarily in the form of concessional loans as well as some grants, from France, Germany, the US, the UK and the European Union. The World Bank stressed that the Komati project was aligned with the country’s Just Transition Framework, which aimed to minimise the socioeconomic impacts of the climate transition, improve the livelihoods of those most vulnerable, and embrace the opportunities stemming from the transition. GLOBAL REFERENCE It added that the repowering and repurposing of the Komati coal-fired plant was a demonstration project that could serve as a reference on how to transition fossil-fuel assets for future projects in South Africa and around the world. The project, the bank said, would provide learning experiences through a cycle of piloting, monitoring, assessing, documenting, and information sharing. “Reducing greenhouse gas emissions is a difficult challenge worldwide, and particularly in South Af...
JSE-listed group Sasol expects to conclude power purchase agreements for 600 MW of renewable energy “imminently” as it moves ahead with plans to meet a 2030 target of reducing its greenhouse-gas (GHG) emissions by 30%, while sustaining energy and chemical production volumes. The renewables electricity will be wheeled to the group’s South African operations through the Eskom grid by 2025 and Sasol expects to add a further 600 MW of renewables by 2030. The emission-reduction commitment, which was unveiled in 2021, has been made against a 2017 baseline of 63.9-million carbon dioxide equivalent (CO2e) tons and implies a reduction to 44.7-million CO2e tons by 2030. The group has also pledged to be a net-zero emissions company by 2050. Speaking to investors during a climate roundtable, CEO Fleetwood Grobler described the procurement of renewables as a key initial lever in its decarbonisation strategy to 2030, during which the group would also seek to displace coal with gas, reduce coal use through the closure of six coal-fired boilers in Secunda and implement energy efficiency projects. The group was also investigating several green hydrogen and green hydrogen-derivative opportunities, particularly to displace the 2.4-million tons of emissions-intensive ‘grey hydrogen’ it produces currently, mainly from coal, and which the company uses to produce fuels and chemicals through its Fischer Tropsch (FT) technology. Grobler stressed, however, that meeting the 2030 GHG-reduction target was not contingent on green hydrogen, which was being viewed as a “sweetener” during the period and was expected to contribute to its further decarbonisation only after 2030. “Catalytic” green hydrogen projects would, however, be implemented during the current decade, including one to repurpose a 60 MW electrolyser at Sasolburg, in the Free State, to produce 3.5 t of the clean energy carrier daily. The green hydrogen arising would most likely be used to support green mobility projects in South Africa, including the fuelling of green-hydrogen mining haulage trucks. The group would also pursue, in partnership, sustainable aviation fuel (SAF) opportunities prior to 2030, using green hydrogen in its FT process to produce jet fuel that was likely to attract a market premium from aviation companies. A study was currently under way through the so-called HyShiFT programme to produce SAF in partnership with Linde, Enertrag and Hydregen, initially under Germany’s H2Global platform, into which the project would be bid. Sasol was also leading a feasibility study to explore the potential for the development of a green-hydrogen derivatives export hub at Boegoebaai, in the Northern Cape, and had entered into a green-steel partnership with ArcelorMittal South Africa, for Saldanha Bay and Vanderbijlpark. Grobler said that the reduction of electrolyser costs to produce green hydrogen to between $1/kg and $2/kg would be a key trigger for Sasol’s future green-hydrogen strategy and indicated that such pricing was likely to emerge only after 2030. However, he noted that the incentives available in the US under the recently introduced Inflation Reduction Act would bolster the competitiveness of green hydrogen in that country and Sasol was, therefore, considering prospects for combining its FT technology with power-to-X solutions to produce green fuels and chemicals in that country. The immediate focus in South Africa, however, would be on replacing coal electricity with renewables and moving to secure the gas it required to displace coal in its production processes at Secunda. Recent drilling success in Mozambique had resulted in Sasol extending its gas supply plateau to 2028. Executive VP for energy Priscillah Mabelane said the extension had given the group more time to shore up its gas supply options and also reduced the pressure to conclude a liquefied natural gas (LNG) supply agreement, which she described as ‘Plan B’ should it fail to secure more gas from southern Mozambiq...
The board of the South African National Roads Agency Limited (Sanral) has announced that four of the five tenders it cancelled in June have been awarded this week, following an evaluation process by the Development Bank of Southern Africa (DBSA). The R3.4-billion Mtentu Bridge project, on the N2 Wild Coast road, was awarded to the CCCC Mecsa joint venture (JV); the R1-billion rehabilitation of the R56 Matatiele rehabilitation project, in the Eastern Cape, was awarded to Down Touch Investments; the R1.8-billion N3 Ashburton Interchange, in KwaZulu-Natal, was awarded to the Base Major/CSCEC JV; and the EB Cloete interchange improvements project, in KwaZulu-Natal, valued at R4.3-billion, was also awarded to Base Major/CSCEC JV. In light of the recent announcement by Finance Minister Enoch Godongwana that e-tolls would be scrapped, a decision on the open road tolling tender (TCH Operator) has been put on hold pending clarity on key issues. “We are . . . deeply grateful to the industry for their patience in resubmitting tenders for these contracts and waiting for the adjudication process to be concluded,” Sanral chairperson Themba Mhambi said. When the contracts were cancelled, there was a concern by the executive on the impact that it would have on the country’s infrastructure development agenda, he said. The Sanral board instructed management to readvertise and award the R17.47-billion in tenders the board cancelled earlier in May, citing “material irregularities” within four months. “We . . . undertook to both President Cyril Ramaphosa and Transport Minister Fikile Mbalula that we would do everything possible to ensure we mitigate the impact on the construction industry and the economy. And that meant re-advertising, evaluating and awarding the tenders within four months after they were cancelled. We . . . learnt valuable lessons about how to handle tenders with speed to keep the country’s economic development on the boil,” Mhambi said. Sanral said it would continue to prioritise infrastructure development in driving South Africa’s economic recovery. While this process has delayed the implementation of critical infrastructure upgrades, Sanral said that it was balanced against healthy governance and the need to ensure compliance with all relevant procurement and legal prescripts when tenders are awarded.
South Africa cannot be allowed to breach its climate change mitigation measures and Paris Agreement declarations despite it being an emerging country that is still heavily reliant on fossil fuels, South African Presidential Climate Commission mitigation head Steve Nicholls told delegates at last week’s ESG Africa Conference. Many African countries have, of late, requested lenience in meeting climate change mitigation commitments, requesting also a delay in their abandonment of cheap and easy-to-obtain fossil fuels as a result of their delayed and inhibited industrial and social development. Many argue that developed nations built their economy, industrial base and power generation network using vast volumes of fossil fuels and that Africa should also be allowed to burn the carbon intensive fuels for a while longer, while it develops. However, Nicholls said South Africa, in particular, is a carbon-intensive emitter, sharing an emissions contributing position among the highest, globally. For this reason, Nicholls said South Africa has to reduce its emissions immediately. “There is no chance for us to increase our emissions.” He posed the question of whether there should be an interim period during which very poor countries should be allowed to increase their emissions so that they can develop socially and in terms of their industries. “The answer is probably yes, but in very small areas. It is not in power [generation]. It does not mean that we can go and build massive coal-fired power stations,” said Nicholls. He added that gas was also not an avenue that should be exploited, despite its frequent marketing as a less carbon-intensive source of energy. “It does not mean we can do more oil and gas exploration,” Nicholls added. He posited that there “may be some opportunity” for African nations to increase their emissions in certain industrial activities, but that fossil fuel-intensive forms of power generation were not an option and that South Africa could not afford to expand its burning of fossil fuels by any measure. Globally, measures to limit temperature rise to 1.5 oC above preindustrial era levels, have to be implemented by every country, regardless of their stage of development. “. . . If we are to stay below 1.5 oC, we have to be net zero by 2050. And by we [I mean] everybody – the whole planet. Africa has to be as well. Australia has to be, everybody has to be [compliant in mitigation measures],” Nicholls stated. In terms of what is required to limit and reduce emissions, he said the pace of change had to be “enormous . . . It is faster than you think, always.” Nonetheless, Nicholls alluded that many African nations, South Africa included, would not achieve sufficient emissions reductions by 2050 and that significant regional warming was on the horizon. He said that, realistically speaking, the 1.5 oC target would not be met. He added that it may be possible to limit the increase to 2 oC by 2050; however, analysis had shown that by implementing current policy measures, the increase in temperatures would be closer to 2.7 oC. Taking this into account, Nicholls said South Africa was due to expect temperature increases of between 4 oC and 6 oC by 2050. This would result in severe social ailments, such as a 25% reduction in agricultural output and about 20-million climate migrants fleeing severe heat in regions that are already “borderline inhospitable”.
Hyundai Automotive South Africa (HASA) CEO Niall Lynch says the Korean importer hopes to secure more new-vehicle stock from its parent company in 2023. “If we had more cars, we could have sold more [this year]. It has been a good year, but hopefully next year we’ll have more stock.” Lynch says Hyundai will work to improve its passenger-car market share next year, which has slipped from 11.27% in the first quarter of the year, to 8.61% in the third quarter. Sales have dropped from 10 529 units in the first quarter, to 8 186 units in the third quarter. Hyundai, as with all vehicle importers in South Africa, is also battling a deteriorating rand, which has weakened around 25% against the dollar in the last four months, notes Lynch. Apart from securing more new stock from Hyundai in South Korea, HASA is also positive that its rejuvenated Venue sports-utility vehicle (SUV) should boost its numbers going forward. HASA sales and operations director Stanley Anderson says the SUV and crossover market in South Africa “keeps on exploding”, in what he describes as the “most contested sector” in the local automotive industry. The segment reached a passenger-car market share of 40.8% in the first eight months of 2021, expanding to 46.3% in the same period this year, with volumes increasing by more by than 30 000 units. Hyundai sold more than 17 000 units of the Venue in South Africa before the introduction of the facelifted version. The Venue range remains the same with the launch of the new model, bar the Glide, which is replaced with an N Line model. The refreshed model features a new grille, as well as some fresh creature comforts and technology. Pricing starts at R294 900, with the top-specced N Line available for R449 900. Anderson adds that HASA will bring an electric Hyundai to South Africa “as soon as we believe it is viable. There are electric models available for us to order”.
South Africa’s gross domestic product (GDP) could expand at a yearly average of about 2.3% between 2022 and 2050, or more than twice the rate achieved over the past decade, under a scenario where the country transitions towards net-zero carbon emissions, a new World Bank report states. The 'South Africa Country Climate and Development Report', released on November 1, also estimates that about two to three more jobs will be created by investing in climate mitigation and adaptation than the 300 000 jobs that are likely to be shed in high-emitting sectors, particularly in the coal value-chain. That said, such a transition would require total incremental financing of R8.5-trillion over the period, equivalent to 4.4% of GDP yearly, and the funding gap would be closed only with the support of external resources and a material reallocation of domestic savings towards the building of climate resiliency. In addition, the report warns of a labour market mismatch, whereby the new jobs are created gradually in non-coal mining activities and will be spatially diverse, while the job losses will occur mainly in the mid-2030s and primarily in the Mpumalanga province. “The government will have to address these two challenges – timing and location – by ensuring the availability of workers with the right skills and encouraging them to move across sectors and regions. “This will require the development of partnerships with the private sector in the short term, and the identification of support to income-generating opportunities, the revamping of the education system (especially technical and vocational education and training), and the removal of persistent rigidities in the labour market in the longer term.” Nevertheless, the report concludes that the urgent implementation of both mitigation and adaptation investments is “foremost in the country’s self-interest”, as it will bolster the economy’s long-term competitiveness (increasingly threatened by carbon-related trade restrictions) while laying the foundations for much-needed energy security. The report notes that loadshedding is having “devastating” economic consequences and is costing the economy $200-million every day the rotational power cuts are implemented. It also concludes, as have several other reports before it, that accelerating investments in renewable energy is in the national best interest. “[Renewables] will help the country address its current energy crisis most urgently and cost-competitively, while lowering greenhouse-gas emissions and delivering substantial local health, environmental and economic competitiveness co-benefits.” Resolving the electricity crisis in a way that reduced emissions would also be pro-growth by increasing labour productivity through a better allocation of resources and improving worker health and by supporting a net improvement in employment, which would stimulate aggregate demand. However, University of the Witwatersrand adjunct professor Michael Sachs cautioned that the report’s call for the immediate implementation of a competitive wholesale electricity market to support the transition faced political and institutional headwinds, which could undermine the just transition. “The report says South Africa has adopted this ambitious agenda, but it's by no means clear that the leadership of the country is committed to these market-based reforms in the energy supply sector, and in transmission and distribution,” he said in response to the release of the report. “[Another] problem with the market-based approach is that economics teaches us that markets are an effective way of improving efficiencies, but they are not necessarily an effective way of creating equity. “Are we going to have an equitable distribution of access to power once we have allowed these market-based solutions with many buyers and many sellers? .[A] just transition, we have to realise, is about more than the coal miners in Mpumalanga and actually concerns many aspects of how South Afric...
Domestic new-vehicle sales in October increased by 11.4%, to 45 966 units, compared with the same month last year. The new-passenger-car market reached 30 597 units in October – a 10.4% jump on the same month last year. The car rental industry accounted for 17.4% of car sales, as the leisure industry continued to gear up for the summer holidays. Sales of new bakkies, vans and minibus taxis expanded by 14.3%, to 12 738 units. October medium-truck sales grew by 29.9%, reaching 769 units, while heavy-truck and bus sales increased by 3.7%, to 1 862 units. New-vehicle exports soared by 16.1%, to 29 508 units. Year-to-date vehicle export numbers are now 14.4% ahead of the corresponding period last year. Naamsa | The Automotive Business Council notes that exports continued their upward momentum during October, despite the disruptions caused by the Transnet port strike. “Despite weaker global demand, due to major advanced economies around the world entering a new era of persistent and structurally higher inflation, vehicle exports remain on track to reach a level of well over 300 000 units.” Naamsa adds that October’s new-vehicle market performance comes despite “tough economic pressures”. “Growth prospects for the balance of the year remain constrained as higher interest rates and, consequently, higher debt servicing costs, weigh on disposable income.”
Eskom has announced that the final unit at the Komati power station in Mpumalanga was shut at midday October 31, officially signalling the end of the station’s operating life as a coal-fired generator and the site’s transition to a renewables, storage, manufacturing and training hub – one that could serve as a global reference as several countries consider ways to transition away from fossil fuels while supporting the livelihoods of affected workers and communities. Komati has been identified as the flagship site for Eskom’s so-called ‘Just Energy Transition (JET) Strategy’, which includes various repowering and repurposing initiatives, including the development of 150 MW of solar photovoltaic, 70 MW of wind and 150 MW battery storage at the retired station. The utility says the initiatives, which are likely to receive concessional funding support from development finance institutions and developed country governments, are intended to ensure that the existing infrastructure, including the associated transmission infrastructure, support the energy transition and the creation of economic opportunities in the region. Besides the renewable and storage projects, a containerised micro-grid assembly factory has already been established on site and plans are under way for the creation of the Komati Training Facility in partnership with the South African Renewable Energy Technology Centre of the Cape Peninsula University of Technology, and the Global Energy Alliance for People and Planet to develop the training facility. “The Komati repowering and repurposing project is one of the largest coal-fired power plant decommissioning, repowering and repurposing projects globally and will serve as a global reference on how to transition fossil-fuel assets,” Eskom said in a statement confirming the plant’s retirement. The final unit, or Unit 9, was itself commissioned in March 1966 and was the last of nine units to be built at the power station, which began operations in 1961. Eskom stressed that the shutting down of the unit would not have a significant impact on the national electricity grid or on an intensification of ongoing loadshedding, as Unit 9 was contributing only 121 MW ahead of its closure. The majority of Komati employees had already been transferred to support and augment skills in other power stations and areas of the business in line with operational requirements. The remaining employees would take part in the Komati Repowering and Repurposing project and Eskom confirmed that no employees would lose their jobs as a result of the closure. Komati was previously mothballed owing to the country’s excess generation capacity in the early 1980s, including Unit 9 which was then mothballed in 1989. The station then featured as part of a return to service programme, which also involved Camden and Grootvlei, with refurbishment commencing on the August 14, 2006. Unit 9 was handed over to the generation division on the December 24, 2008 and re-entered commercial on the January 4, 2009. “The end of Komati’s coal-fired journey marks the beginning of another exciting journey in the service of South Africa. “Eskom has developed a comprehensive JET Strategy which places equal importance on the transition to lower carbon technologies, and the ability to do so in a manner that is ‘just’ and sustainable.”
In light of ongoing grid constraints, some wind industry practitioners are warning that only about 2 GW of the 3.2 GW wind allocation in Bid Window Six (BW6) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is likely to be taken up, given that lower-priced solar photovoltaic projects could absorb a portion of the remaining available network in the key wind provinces of the Eastern and Western Cape. There are also warnings that South Africa’s logistics and construction sectors are not in a position to cope with the anticipated acceleration of wind-related project activity, which is increasingly likely to be driven by private-sector projects rather than the REIPPPP. Any further delays on the back of a protracted period of procurement disruption between 2015 and 2021 and difficulties in ensuring that projects procured under BW5 reach financial close will contribute to extending loadshedding, which has already intensified dramatically this year. Engineering News Editor Terence Creamer raised these concerns with South African Wind Energy Association (SAWEA) CEO Niveshen Govender, whose responses are outlined below. Engineering News: Do you believe there is a risk that the full 3.2 GW allocated to wind as part of BW6 might not be taken up? Govender: The wind industry has typically exceeded the allocation in terms of what has been submitted and constraints are usually related to grid capacity. Areas of high levels of wind resource are the most constrained. The allocation for the REIPPPP can only be taken up if there are sufficient bids which meet the Department of Mineral Resources and Energy (DMRE) and IPP Office guidelines at a competitive cost. We have seen that there are more bids, with a combined capacity of about 4.2 GW, than the allocation for BW6, which is 3.2 GW. Where there is available capacity, the best suited technologies for the country must be evaluated whilst considering maintaining the integrity of the programme. Given that price is the key evaluation criteria and PV projects could come in cheaper than wind during BW6, is there a risk that grid capacity in areas of strong wind resources will be diverted to PV, which only has a 1 GW allocation? The evaluation process allows for both wind and PV projects to be evaluated equally based on price and grid-connection availability, hence the most cost-effective projects will use up the initial grid capacity in a specific region. Once the allocation for one technology is used up (e.g. PV since it has a lower allocation as part of BW6), the remaining allocation for the bid round falls to the other technology whilst ensuring that the specific allocation for that technology is not exceeded. Although PV may allow for lower tariffs in certain instances, considerations need to be made as to the holistic set of factors required of a power generation facility, including the availability factor – with new wind energy projects reaching approximately 50%, that needs to be taken into consideration. It is within the purview of the government and system operator to lay out the requirements for a technology to meet the demand. As SAWEA, we advocate that the government and system operator consider these additional factors given the struggles the State utility is undergoing. Is there anything that can be done to safeguard grid capacity for wind projects during BW6? Grid capacity is one of the main constraints to the expansion of wind energy projects and renewable energy projects at large in South Africa. Preferred bidders are chosen by the IPP Office and DMRE through a rigorous closed-door evaluation process hence wind projects must comply with requirements as set out in the BW6 request for proposals (RFP) in order to ensure they are chosen as preferred bidders. Although as an industry we can see the advantages of safeguarding grid capacity for wind-specific projects, we must ensure that the integrity of the REIPPPP is not compromised. Has the industry eng...
Eskom’s proposal to restructure renewable energy tariffs will impede growth in private sector investment in renewable energy projects and destroy intentions to wheel surplus energy through Eskom’s grid, as doing so will hold little financial gain, Meridian Economics MD Grove Steyn has said. Speaking at public hearings held by the National Energy Regulator of South Africa (Nersa) on October 27, he said that, despite the need to balance Eskom’s revenue collection efforts with the need for a rapid rollout of renewable energy projects, the issue of restructuring tariffs was “very complex” and that loadshedding was the most pressing issue that needed to be resolved in the immediate term. “Our main concern is that [Eskom] did not take into account the short to medium term economic reality in the power sector and the fact that we have a massive loadshedding crisis, and that reality did not seem to influence and shape the technical analysis they did for this proposal,” said Steyn. He explained that South Africa was now heavily dependent on a rapid acceleration of private sector investment in distributed generation to help the country overcome loadshedding as soon as possible. Loadshedding was made worse by “significant challenges” in terms of Eskom’s energy availability factor, as well as delays and challenges with the Independent Power Producer (IPP) Office’s procurement programmes, particularly the Risk Mitigation Independent Power Producer Procurement Programme and the Renewable Energy Independent Power Producer Procurement Programme, stated Steyn. “We have a huge gap and we need to scale up the distributed generation sector rapidly,” he said. “Our concern is that Eskom’s tariff restructuring proposals will have unintended consequences of substantially disincentivising and delaying the rollout of these critical investments in the short to medium term and that this should be avoided at all costs. “[We dispute Eskom’s] proposal, in particular to transfer generation capacity cost recovery from variable to fixed charges,” Steyn said. In this regard, he said that a main finding from a power system modelling study recently done by Meridian Economics – which was based on hourly data from Eskom from the entire power system in 2021 – showed that, with an increase in available renewables in the system, 96.5% of all loadshedding in 2021 would have been eliminated. “This is a really important finding.” Another finding, Steyn highlighted, was that, even if Eskom paid for these new renewables, based on conservative cost assumptions, the utility would still have saved R2.5-billion in 2021, compared with its total generation costs. “The saving will be much larger for Eskom if it does not have to pay for the renewables.” Therefore, he said that despite investors pouring money into embedded generation projects and bearing all the costs and risks associated thereto, they provide significant benefits to the power system currently “for free”. This, Steyn said, was a prime example of a positive externality, and a “really important” part of the economics South Africa’s electricity grid currently faced, and which needed to be taken into account when considering tariff restructuring. The savings stemming from using renewables are as a result of having to use, to a lesser extent, peaking power plants, which Eskom has recently been operating throughout numerous days to reduce loadshedding stages, he said. Peaking power plants are designed and intended to be used only during peak power demand times, such as evenings, and are not intended to be relied upon for baseload generation throughout the day. “Renewables have the opportunity to reduce how much we have to use those very expensive resources [the peaking power plants]. “On the pumped storage side, they are huge efficiency losses – about a third of the energy that we get from the pumped storage will be saved if we had additional renewables on the system,” said Steyn. A similar point applies to Eskom’s op...
Eskom’s latest Transmission Development Plan (TDP2022) includes assumptions that deviate materially from those contained in the outdated Integrated Resource Plan of 2019 (IRP2019) and points to the need for a significant acceleration in grid-related investments to facilitate the integration of 53 GW of new generation capacity, mostly renewables, over the next ten years. Covering the period from 2023 to 2032, the latest edition of the plan, which is published yearly, points to the need for the construction of 14 218 km of new high-voltage transmission lines over the period. It also outlines the need for the deployment of 170 transformers, with a capacity of 105 865 MVA, along with 40 capacitors and 52 reactors to support stable and reliable grid operations and the integration of new generation capacity and load centres. However, it deviates from earlier editions by proposing a front-loading, in the coming five years, of investments in new transformers to unlock 16.6 GW of grid capacity ahead of the introduction of major new power corridors, owing to delays in securing the necessary servitudes for such lines. Eskom estimates that 12.1 GW of additional capacity can be unlocked in the north-eastern parts of South Africa through 23 transformation projects across multiple sites in the Mpumalanga, Gauteng, Free State, North West and Limpopo provinces. A further 4.5 GW is earmarked to arise from 13 projects in the Northern, Eastern and Western Cape provinces, where South Africa’s wind and solar resources are at their most potent but where the grid has either reached its limits or is close to full capacity. Transmission MD Segomoco Scheppers reports that, overall, the TDP2022 points to the need for investments with a combined value of R72.2-billion over the coming five years to add 60 transformers, with a capacity of 26 970 MVA, and 2 890 km of new high-voltage lines. The 11 325 km of line outlined in the ten-year plan are backloaded to between 2028 and 2032. Scheppers told stakeholders that the revised assumptions were prompted by changes in the environment since the publication of the IRP2019, which was also being reviewed by government, as well as the fact that the TDP2022 extended beyond the IRP2019’s 2030 horizon. The latest TDP has also been aligned with Eskom’s corporate plan to 2035, which has been shared with government and which incorporates an accelerated decommissioning of the existing, poorly maintained and unreliable coal fleet relative to the schedule outlined in the IRP2019. The plan assumes that the energy gap will be closed largely using electricity derived from variable wind and solar photovoltaic (PV) generators, supported by some diesel and gas plants and a large deployment of battery energy storage. Senior manager for strategic planning Ronald Marais indicates that, relative to the IRP2019, the TDP2022 assumes an accelerated decommissioning of an additional 3.4 GW of coal by 2030, largely on the back of an accelerated shutdown of Tutuka. However, Eskom is also assuming that the private coal plants included in the IRP2019 will not feature in the 2030 mix. By 2032, the TDP2022 assumes that there will be 27.9 GW of coal, down from 39.4 GW currently, and that South Africa will have a 97.4 GW installed based, comprising coal (27.9 GW), wind (26.3 GW), solar PV (18.3 GW), open cycle gas turbines (8.4 GW), batteries (6.55 GW), imported hydro (4 GW), pumped storage (2.5 GW) and nuclear (1.86 GW) with landfill gas, small hydro, biomass and concentrated solar power making up the balance. “Generation has become the primary driver for new transmission infrastructure, and we are aiming to capacitate the grid for new generation connections, of which wind and solar will be the two dominant technologies,” Marais says. However, the transmission unit, which is in the process of being unbundled to become the National Transmission Company South Africa, is also prioritising the acquisition of ancillary services to ensure a stable s...
Engineering News Editor Terence Creamer discusses some of the highlights from Finance Minister Enoch Godongwana's Medium-Term Budget Policy Statement, which was delivered to Parliament on October 26.
Better-than-expected revenue collection enabled Finance Minister Enoch Godongwana to report an improvement in government’s fiscal position relative to the one forecast in the February Budget. However, slowing global and domestic growth together with ongoing power cuts pose a risk to the fiscal outlook, as does the prospect of a higher-than-budgeted public-service wage settlement. The National Treasury had already lowered its gross domestic product (GDP) growth forecast for 2022 to only 1.9%, having projected growth of 2.1% in February. GDP growth is also expected to average only 1.6% over the coming three years. Revenue collections during the first half of 2022/23 were 9% higher than the same period of the prior year as the positive impact of high commodity prices continued. The gross tax revenue estimate for 2022/23 was, thus, projected to be R83.5-billion higher, at R1.68-trillion, than the R1.59-trillion forecast in February. Godongwana said government would use a portion of this revenue to reduce the budget deficit, with the consolidated budget deficit projected to narrow from 4.9% of GDP in 2022/23 to 4.1% next year, 3.9% in 2024/25 and 3.2% in 2025/26. However, spending on health, education, local government free basic services, infrastructure, and policing would also be increased, along with support for Denel, Sanral and Transnet. Additional new expenditure of R37-billion was outlined for 2022/23, comprising R54.1-billion in spending increases, partially offset by projected underspending. SANRAL, TRANSNET, DENEL SUPPORT Sanral would receive an additional R23.7-billion to pay off government-guaranteed debt, which is said to be conditional on a solution to Phase 1 of the Gauteng Freeway Improvement Project (GFIP). In addition, Godongwana announced that a decision had been made to transfer Sanral’s R47-billion debt relating to the GFIP to the national and Gauteng governments in a bid to resolve the long-standing e-toll issue. He also revealed that the Gauteng provincial administration would assume responsibility for the cost of maintaining the 201 km of highway and associated interchanges, as well as any future investments. Seventy percent of the debt, or R32.9-billion, would be absorbed by the national government, while the Gauteng provincial government would take on the 30% balance, or R14.1-billion. Another R5.8-billion would be directed to Transnet, half to repair infrastructure damaged by the April floods in KwaZulu-Natal, and half to increase locomotive capacity, which together with theft of cable and lines was undermining the performance of some key export corridors. Transnet Freight Rail has confirmed that it has over 300 locomotives currently out of service, owing to a long-running dispute with its Chinese supplier, which has refused to provide the utility with locomotive spares. A recent in-principle settlement agreement is expected to clear the way for both the delivery of spares and additional locomotives. Arms manufacturer Denel would receive R3.4-billion to complete its turnaround plan and R204.7-million to reduce contingent liabilities arising from its weak financial position. The Minister said that discussions were still under way to consider options for a replacement for the temporary Covid-19 social relief of distress grant, which was currently being distributed to 7.4-million people. “No final decision has been made about a replacement or how it would be financed. As a result, the temporary grant will be extended for one year until March 2024.” PRIMARY SURPLUS Godongwana also announced that government expected to achieve a primary budget surplus, with revenue exceeding non-interest spending, of 0.7% in 2023/24. However, he did not provide details of what was expected to be a R200-billion debt-relief package for Eskom, announcing that the scale and the structure of the programme would be unveiled only in February. Gross debt is now projected to stabilise at 71.4% of GDP in 2022/23, representing a mater...
Finance Minister Enoch Godongwana has confirmed that government will take over between one-third and two-thirds of Eskom’s R400-billion debt, as intense loadshedding, which government expects to persist for 18 months, contributed to a downward revision to the country’s growth outlook. The National Treasury is now forecasting real gross domestic product growth of only 1.9% for 2022, having projected growth of 2.1% in the 2022 Budget Review published in February. Delivering his Medium-Term Budget Policy Statement (MTBPS) to Parliamentarians in the Cape Town City Hall during ongoing power cuts, Godongwana said details of the debt-relief package, along with the conditions, would be outlined during the 2023 Budget, in February. Godongwana’s decision to delay an announcement on the structure and scale of the relief package was unexpected, given the broad-based expectation that the package, which has been on the cards for years, would be finally unveiled during the MTPBS. These expectations were reinforced by the July 25 address of President Cyril Ramaphosa, when he signalled that debt relief would be part of the interventions being pursued to tackle intensifying loadshedding. Alexforbes chief economist Isaah Mhlanga, who expected a R200-billion debt-relief package, said that markets, investors, and credit rating agencies expected some solution so that they could properly assess South Africa’s fiscal position and, therefore, its credit rating. The Minister described the matter as complex and requiring consultation with bondholders before it was implemented. He said the intervention, once finalised, should permanently ease financial pressure on the utility, so as to enable it to implement its unbundling into three units of generation, transmission and distribution, while freeing up resources for investment by these units. It would also be designed to ensure that the utility – identified as the largest long-term risk to the economy, owing to its high debt levels and unsustainable business model – no longer relied on government bail-outs. “While the selection of the relevant debt instruments and the method of effecting the relief is still to be determined, the quantum is expected to be between one-third and two-thirds of Eskom’s current debt,” he said, indicating that both guaranteed and non-guaranteed debt was being considered. He stressed, too, that the relief was unlikely to be implemented in a single fiscal year. In 2019, government announced a R230-billion support package for Eskom and R140-billion of that package had already been disbursed, with another R21.9-billion injection earmarked for the 2022/23 financial year. In addition, Eskom represented a large component of the contingent liabilities outlined in the national accounts, which stood at R758-billion and were expected to breach the R1-trillion level in 2024/25. The National Treasury’s guarantee exposure increased from R567-billion in 2020/21 to R594-billion by March 31, driven largely by further drawdowns by Eskom, which accounts for 78% of guarantees to State-owned companies. “The National Treasury is leading a process to finalise a debt relief programme designed to restore Eskom to efficiency and financial sustainability. “The specifics of the programme, including the selection of the relevant debt instruments and the method of effecting the relief, are still being finalised.” STRICT CONDITIONS Nevertheless, the National Treasury insisted that the programme would include “strict conditions” on Eskom and other stakeholders before and during the debt transfer. The identity of the other stakeholders was not provided, but is expected to include the National Energy Regulator of South Africa, whose decision to exclude a R69-billion National Treasury injection from Eskom’s allowable revenue in a tariff determination neutralised the effectiveness of the injection in stabilising the utility’s finances. That decision was subsequently overturned by Eskom in the courts. “These con...
Finance Minister Enoch Godongwana announced on Wednesday that a decision had been made to transfer Sanral’s R47-billion debt relating to the Gauteng Freeway Improvement Project (GFIP) to the national and Gauteng governments in a bid to resolve the long-standing e-toll issue. In addition, the Gauteng provincial administration would assume responsibility for the cost of maintaining the 201 km of highway and associated interchanges, as well as any future investments. The Gauteng administration, the Minister said, would have the power to decide whether the maintenance and any future investments would be funded through the existing electronic toll infrastructure, new toll plazas, or any other revenue source within their area of responsibility. Godongwana announced that 70%, or R32.9-billion, would be absorbed by the national government, while the Gauteng provincial government would take on the 30% balance, or R14.1-billion. He described the protracted uncertainty surrounding the GFIP as having had major negative implications for road construction in the country. “We need to move on from the debates of previous years and find solutions to this challenge. “To resolve the funding impasse the Gauteng provincial government has agreed to contribute 30% to settling Sanral’s debt and interest obligations, while national government covers 70%.” He also used his Medium-Term Budget Policy Statement address to announce that government was proposing to make an initial allocation of R23.7-billion to Sanral to support it with its immediate debt commitments. The money, he added, would be disbursed on strict conditions. The decision to pursue a debt transfer, as well as to transfer responsibility for the roads back to the province, had been taken so as to improve Sanral’s balance sheet and enable it to “do what it does best, which is to build and maintain roads”. He described as “political” the decision not to implement the user-pay principle, which had met with overwhelming resistance not only from motorists but also politicians, including the African National Congress in Gauteng. The debt transfer comes as government moved to pursue a similar, but far larger, transfer of a portion of Eskom R400-billion debt. Godongwana said details of that debt transfer would be announced in the February Budget. The Organisation Undoing Tax Abuse (OUTA), which was initially established to fight against the implementation of e-tolls in Gauteng, described the MTBPS address as "a clear indication that the e-tolling of the Gauteng freeways will be halted". "OUTA has fought for over a decade to bring an end to the failed e-toll scheme, which was a battle fought through courts, through official inquiries, across social media, in protests on bridges and outside government offices, through millions of unpaid e-toll bills and the defence by OUTA of thousands of summonses by Sanral chasing debt," CEO Wayne Duvenage said in a statement. He described it as a "massive victory for civil society" and a "significant message to government never to ignore the voice and the power of the people". Duvenage stressed, however, that ending e-tolls had two aspects: establishing the alternative funding solution for the GFIP, and the legal dismantling of e-tolls. "The Minister of Transport, Fikile Mbalula, should now announce the way forward to legalise the situation for users of the Gauteng tolled roads. "OUTA believes that Sanral and the Department of Transport must now retract the notices which declared the GFIP roads as toll routes, which enabled tolls to be charged."
The organisers of this year’s inaugural Ilanga Cup Solar Challenge say the event will be back next year, albeit in a somewhat different format. The 2023 edition will return to the Red Star Raceway, in Delmas, on July 5 and 6. “We are thrilled to officially launch the highly anticipated Ilanga Cup Solar Challenge for 2023,” says race director Robert Walker. “The inaugural event made great impact on the region. We have received lots of interest from schools and universities across Southern Africa that want to participate in the solar challenge. “As the event focuses on driving the innovation of renewable energy within the transportation sector, it is important that we get young people involved and give them the platform to experiment with different energy concepts in order to contribute towards sustainable mobility,” adds Walker. The Ilanga Cup Solar Challenge is Southern Africa’s first closed track endurance challenge. The event has been created for teams to put their solar vehicles to the test in a controlled environment, designed to measure the vehicles' performance, efficiency and durability. Next year’s event will incorporate some new features for the solar car teams. Among other changes, the event is moving from an eight-hour to a 24-hour endurance challenge. This will see teams truly test their vehicles, as well as push the limit of solar technology during both day and night settings. “The Ilanga Cup is the first-ever solar challenge in Africa to conduct a 24-hour solar event,” notes Walker. “We believe that, with this format, the participating teams will be able to gather useful data for the development and further improvement of solar technologies for sustainable transportation.” Registration for the 2023 Ilanga Cup Solar Challenge is now open.
Transnet Freight Rail (TFR) CEO Sizakele Mzimela reports that the group’s plan to procure new locomotives will be put on hold in light of the recent in-principle agreements reached between Transnet and two original equipment manufacturers with which it has been in legal dispute – CRRC E-Loco, of China, and Alstom, which recently acquired Bombardier Transportation (BT). Speaking during a briefing held to outline the progress TFR was making to recover from a recent strike, Mzimela reported that the agreements were likely to result in TFR securing both much-needed spares, the absence of which had left 311 locomotives standing idle, as well as the outstanding locomotives procured in 2015 under the so-called 10-64 contract, which was the subject of intense State-capture scrutiny during the Zondo Commission. The inquiry found that the increase in the price of the procurement of the 1 064 electric and diesel locomotives from R38.6-billion to R54.5-billion was based on misrepresentations by senior executives and was to the detriment of Transnet, which had subsequently declared the contracts unlawful. Under the contract, which was split between four suppliers, General Electric was awarded a contract to supply 233 of the 465 diesel locomotives, while China North Rail was contracted to supply the 232 balance. China South Rail was awarded a contract for 359 of the 599 electric locomotives ordered, with BT to supply 240. The two Chinese firms subsequently merged under CRRC. In August, Transnet and CRRC E-Loco announced an in-principle agreement in relation to legal disputes between the companies, with a similar agreement reached with Alstom in early October. “Now that we have an in-principle agreement that has been reached with both [CRRC E-Loco] and with BT-Alstom we believe that this will allow us to have sufficient locomotives to carry us through at least for the next three to four years,” Mzimela stated. “So, at this stage, while we still have intentions to again go for an open-market tender for additional locomotives that will now be held back until we have received the full order from the Chinese and from BT.” Prior to the agreements, Transnet CEO Portia Derby indicated that the group was preparing to procure about 400 new locomotives to close the gap given that Transnet had taken delivery of 595 locomotives under the 10-64 contract. The tender was initially expected for release in July, but never materialised. Mzimela also reported that the agreement opened the way for TFR to receive the spares it required from CRRC E-Loco to return 311 idle locomotives to service, which would alleviate the capacity constraints on several corridors, most notably the North Corridor, which transports export coal. Ahead of the strike, the Minerals Council South Africa estimated an export loss of R50-billion on an annualised basis this year for iron-ore, coal, chrome, ferrochrome and manganese exporters as measured by delivered tonnages by TFR against contracted rail tonnages. TFR said the iron-ore had recovered well since the strike and that it had not revised its 60-million-ton export-coal target for the 2022/23 financial year, notwithstanding the fact that the corridor had been seriously disrupted during the recent strike. “The in-principle agreement that has been reached with the Chinese will result in them helping us to bring back to service the long-standing locos first, but also to complete, once everything has been finalised, the supply of the outstanding number of locomotives that would have been part of the initial order,” Mzimela said. The spares are required for the 53 Class 20E and 67 Class 21E locomotives. It is anticipated that the agreement with Alstom will similarly allow for the completion of that contract, with Transnet having revealed recently that 85 of the BT locomotives had been delivered to date. Overall, it is understood that Transnet has taken delivery of 595 locomotives arising from the 2015 contract, representing 56% of th...
Saudi developer, investor and operator of power generation, water desalination and green hydrogen plants ACWA Power and South Africa’s State-owned development finance institution the Industrial Development Corporation (IDC) have signed an extensive memorandum of understanding (MoU) exploring a partnership in the development of green hydrogen production and its derivatives in South Africa. This partnership coincides with the State visit of President Cyril Ramaphosa to the Kingdom of Saudi Arabia. The agreement was digitally signed by ACWA Power CEO and vice-chairperson Paddy Padmanathan; ACWA Power chief investment officer Clive Turton; IDC industry planning and project development head Rian Coetzee; and IDC legal services manager Russell Wallace, with agreement copies exchanged at a gathering attended by executive dignitaries. This is the first agreement of its kind between ACWA Power and the IDC, but the parties have previously collaborated for equity in a renewable energy plant in South Africa. The potential value of this MoU is estimated at $10-billion. ACWA Power will function as the developer for green hydrogen and its derivatives in South Africa, with the IDC acting as co-developer and equity partner in the proposed projects. South Africa has set a 2050 net-zero target and plans to become a significant producer and exporter of green hydrogen and its derivatives. Accordingly, the South African government has mandated the IDC to lead the development and commercialisation of the green hydrogen economy. The IDC, in partnership with the Green Hydrogen Panel, is in the process of finalising the South African Green Hydrogen Commercialisation Strategy (GHCS). “The IDC recognises the substantial value and benefits that the green hydrogen economy will bring to South Africa. The green hydrogen economy presents new economic, skills, employment and community opportunities for the country. We are pleased to explore potential partnership opportunities with ACWA Power, given its pedigree and expertise in this industry,” says IDC COO Joanne Bate. Given ACWA Power’s experience in the South African renewable energy industry and in green hydrogen projects abroad, the company posits that it can play meaningful role in supporting the objectives of the GHCS. The parties will carry out a feasibility study, potentially cooperate, jointly develop and co-invest in projects in the green hydrogen value chain in South Africa. This MoU with ACWA Power will support the implementation of the GHCS and is expected to contribute towards the country’s green hydrogen production targets. ACWA Power has had a footprint in South Africa since 2016 and currently has two solar energy plants – Bokpoort and Redstone – in the country. Both projects use concentrated solar power technology.
Mobility platform Uber has about 20 000 drivers and delivery people earning an income through the Uber and Uber Eats apps in South Africa, which has more than 2.1-million active platform users, says newly appointed Uber sub-Saharan Africa GM Kagiso Khaole. Uber, and Uber Eats, which focuses on restaurant deliveries, have collectively reached more than 30-million riders and eaters in sub-Saharan Africa since 2013, he adds. Uber is available in more than 61 cities across seven countries in sub-Saharan Africa, namely South Africa, Ghana, Nigeria, Ivory Coast, Kenya, Uganda and Tanzania. Drivers on the platform have recently completed one-billion trips in Africa. “As we gear ourselves to mark our tenth anniversary next year, we are excited about moving into more cities, enabling people to go anywhere or get anything,” says Khaole. In the last month, Uber has become operational in Owerri and Akure, in Nigeria; Eldoret, Kisumu, Nakuru and Naivasha, in Kenya; and Tamale and Sunyani, in Ghana. “Every country is unique, so we take the time to understand each market’s needs so we can be responsive and adapt accordingly,” says Khaole. “This has seen us launch new products across sub-Saharan Africa.” These products includes UberX Share in Ghana and Nigeria, and Uber ChapChap Share in Kenya, all aimed at reducing rider costs and increasing demand for drivers. These shared rides offerings allows users to save up to 30% of the trip fare when matched with a co-rider heading in the same direction. Where a match is not possible, users will still be able to save 5% from their ride. “The introduction of UberX Share allows us to demonstrate the power of our platform – understanding the ability to match rider destinations while delivering convenience and affordability,” explains Khaole. “We are a global company that builds locally. In Ghana and Nigeria we tapped into the local culture of car-pooling when moving around, which makes this product a great fit for the market.” The new UberXL and UberVAN offerings also allow a number of people to travel together. UberXL, launched in Nairobi, Kenya, provides seating for up to six people. In South Africa, riders can now reserve their group travel 30 days in advance with UberXL Reserve and UberVAN Reserve. “Core to introducing this product was the understanding that the lifting of Covid restrictions has fuelled local and international travel,” says Khaole. “In South Africa, the convenience of booking your ride in advance, at the same time as booking for your flight, enhances one's travel experience.” Uber Comfort, which is currently only available in South Africa and Côte d’Ivoire, is set to expand to Ghana. “This bespoke offering is designed for riders looking for an upgrade to their everyday ride with extra comfort,” says Khaole. “Uber Connect is one of the app’s most popular products available in South Africa, Kenya, Nigeria, Tanzania, Uganda and Ghana,” he adds. “Uber Connect is an on-demand delivery solution that allows users to send and receive packages with speed. The feature comes built-in with a pin verification, providing users peace of mind that their package is being delivered to the right person.” Congestion, Safety Concerns As one of the fastest-growing regions in the world, African cities present very real challenges when it comes to congestion, says Khaole. “Safety is another challenge that we continue to face on the continent, which is why we are continuously looking at ways to innovate in response to the safety risks that come with moving around.” Some notable safety features available in South Africa include the Emergency Assistance Button and Follow My Ride. “We are also piloting our new Audio Recording feature that allows drivers and riders to record their trips and submit the recording to our support team in the event of a safety incident,” notes Khaole. “We also have an incident response team which is available 24/7 to respond immediately to any reported incidents, and a law enforc...
South Africa lost the opportunity of moving R65.3-billion worth of goods during the recent 11 days of industrial action at the country’s ports, says South African Association of Freight Forwarders (SAAFF) CEO Dr Juanita Maree. “Some of that will possibly move later, but the rest is gone – and gone forever.” In contrast to this, the wage increase cost – if adopted across the board for all workers at Transnet – is R1.5-billion. SAAFF represents more than 300 clearing and forwarding agents, accounting for more than 80% of the trade goods moving in and out of South Africa. Maree says there is a need in the country for growing maturity in resolving matters amicably, in a timely and efficient manner, and to strengthen the partnerships between government and strategic stakeholders through early consultation to enable prevention rather than cure, “as risk mitigation is our joint responsibility to the smooth running of our national economy”. “We must learn the stark lessons provided by these operational disasters, or we are going down an endless spiral with the worst possible outcome,” warns Maree. “If goods can't move, the economy stops. And if the economy stops, the impact is hugely negative for anything related to the movement of cargo – including time, cost and service reliability. “With the economy's circular flow, ordinary South Africans will suffer in the end – the very individuals who went on strike against a wage offer way below the inflation figure.” One Day Strike Action = Ten Days Recovery Maree says while SAAFF is” very pleased” that a wage agreement has finally been reached in the ports sector, the association must stress that the hard work only starts now. “According to our consolidated reports, most port terminals are operating at productivity levels that are somewhere between medium and normal. “So, although it might seem that we are making a return to full operational status, we are certainly not there yet,” she emphasises. “In the aftermath, beyond the strike, barring any further destruction, a complete restoration of normal functionality will only happen in early 2023, as the consequences of one day's worth of stoppage have been shown to result in anything up to ten days needed for recovery.” SA Can Do Better South Africa must learn from this experience and adopt better operational practices to improve the country’s logistics performance, notes Maree. “We reiterate that this can only be achieved by close collaboration between all the parties – business, labour and government.” Maree proposes a number of solutions to grease the wheels of the South African logistics sector. “We need backup port facilities to evacuate the ports. “We have a high freight demand, therefore, only a multi-modal approach – with all parties operating efficiently – will have a chance of satisfying our demand.” This means South Africa needs a robust functional rail sector, especially when moving goods from the country’s ports. The country also needs precise policy alignment to allow for the practical execution of moving goods. “The functioning of the supply chain, nor the economic extent of policies and actions that affect it, is clearly not fully understood by decision-makers,” says Maree. “The government often asks the private sector to assist in picking up the cost, such as increased taxes and levies, but this help must be reciprocated with the private sector's . . . meaningful involvement in operations.” Maree adds that South Africa needs port efficiency to improve in terms of the time, cost, and service reliability involved in moving goods. “This approach must include inter and intra-port competition, and all functions must be overseen by a strong, independent ports regulator.” All role-players are also to be held accountable for their performance, including business, labour and government, notes Maree. In the end, South Africa needs to “evolve and mature as a nation” she adds. “We cannot allow for ideology and self-interest to drive th...
The board of the South African National Roads Agency Limited (Sanral) has announced the appointment of Reginald Lavhelesani Demana as the entity’s new CEO. Demana’s appointment is subject to standard clearance and verification procedures. Sanral has been without a permanent CEO since November last year. Demana is currently a divisional executive at the State-owned Industrial Development Corporation (IDC), where he is responsible for a portfolio that covers the mining, metals, infrastructure and energy sectors. He is a trained engineer and has more than 20 years’ working experience, including in the investment banking sector. Demana’s expertise includes mergers and acquisitions, the structuring of empowerment deals, capital raising and general strategic corporate finance. He was also the former CEO of JSE-listed coal mining and trading company Wescoal, which was recently renamed Salungano. Demana began his professional working career as a mining engineering trainee with Anglo American Platinum, and then as a mine health and safety inspector with the Department of Mineral Resources and Energy. He holds a BSc in Mining Engineering from the University of the Witwatersrand and a, MSc in Mining Engineering (with distinction) from Exeter University in the UK. The Sanral board believes Demana will contribute towards the stabilisation of the road agency’s finances, particularly the toll portfolio, and that he will continue implementing the company’s mandate to plan, build and maintain the national road network “with the excellence associated with Sanral”, given his “impressive educational qualifications, experience in senior strategic positions and the leading roles he has played in corporate finance in general”. Current acting CEO Lehlohonolo Memeza will continue in her role until Demana assumes responsibility. “As soon as formal communication is received from the Minister of Transport, the board will finalise all processes relating to the appointment,” notes board chairperson Themba Mhambi.
As Rand Water increases its abstraction of water beyond its licence, it is pleading with consumers to use water wisely as the water it is currently over abstracting from dams needs to last multiple seasons and not just one. The water trading entity, on average, supplies 4 642-million litres of water a day to municipalities, with a capacity to peak at 5 036-million litres a day, which is beyond its abstraction licence, to ensure 17.9-million consumers across four provinces are provided with water. The Department of Water and Sanitation (DWS) temporarily increased Rand Water’s bulk water allocation as an emergency measure to address water shortages in South Africa’s economic hub. The self-funded bulk water trading entity, with more than a 3 000 km interconnected network, has, year-on-year produced more water than has been budgeted for as it delivers bulk water supply to 18 municipalities, which accounts for 80% of water use as it reticulates and distributes to consumers. In recent weeks, consumer water demand, particularly across Gauteng, has surged, reaching as high as 300 litres per person a day, with higher non-drinking water use, well above the worldwide average of 173 litres and South Africa’s average of 233 litres a day. Just in the first quarter of 2023, water use climbed 5.2%. This high demand amid a heat wave with late rainfall, in addition to excessively high nonrevenue water and leaks, with a loss of up to 40% in the distribution system, is placing strain on Rand Water’s ability to keep apace and ensure a buffer at its reservoirs. “Every suburb has water,” says Rand Water CEO Sipho Mosai. However, he notes that, with low-lying areas using excess water for non-drinking purposes, high-lying areas face shortages, owing to an inability to pressurise water supply upwards as reservoirs are depleted. Further, he says that should the country experience a drought, there needs to be enough water in the dams to feed the reservoirs during any potential dry period. At the rate water is being consumed, there will be no buffer for next season, despite the dams currently being full. “The water we have will not last until next season,” he tells media during a briefing at the entity’s headquarters on Friday, noting that the current high water requirements and over abstraction is just not sustainable. “We have provided and we have planned for the demand; however, we need to use what we have responsibility,” he says, citing a drop in water use during the rainfall this week as there was no need to use drinking water for irrigation. “The easiest way out is to use less water or build more infrastructure now and pay more money for water.” Rand Water has a significant pipeline of infrastructure projects designed in line with predicted demand; however, the current demand requires unplanned additional infrastructure should it continue. This will cause the price of water to surge, an extra cost already cash-strapped consumers will not be able to shoulder. The reservoirs are also required to be at a safe zone in case of power outages, which is also causing significant concern for the water trading entity, as following a power outage, it takes about four to five days for a reservoir to recover. He cites the recent power outages that left many Johannesburg suburbs without water. On September 23, a power failure at Rand Water’s Vereeniging water works resulted in a 50% reduction in bulk water supply to the Eikenhof pump station, impacting the high-lying areas of the Crosby, Brixton and Hurst Hill Supply zones. Before the system could recover fully, Rand Water’s Vereeniging works experienced a total power failure on September 25 just after midnight, following which, on September 29, Rand Water experienced a pump trip at their Eikenhof system for about three hours, reducing the pump station capacity by 40%. Further, Rand Water had a power supply issue on September 30 at their Zuikerbosh purification works, which again had a 60% impact on the supply...
Engineering News Editor Terence Creamer discusses the latest developments with regard to South Africa's Just Energy Transition Partnership Investment Plan; Cabinet's endorsement of the plan; and the ongoing debate about the best uses of these concessional funds.
Enviro Automotive is set to launch its first battery electric panel van in the local market – the DFSK EC35. Enviro Automotive is the importer and distributor of Chinese-made DFSK electric vehicles (EVs). MD Gideon Wolvaardt says his company aims to assist transport operators and entrepreneurs who wish to convert to commercial electric vehicles (CEVs) and EVs, be it for cost and/or environmental reasons. “The company’s approach shows the market that going electric is simple, accessible and sustainable.” The current focus is on CEVs, adds Wolvaardt. At this stage, the South African market has access to the DFSK EC-series electric panel van and 1-ton bakkie. The first big shipment of panel vans is already on the water, and the bakkies – a workhorse, not a lifestyle vehicle – are in their final testing cycle, notes Wolvaardt. “The bakkie will most probably be launched in the first quarter of 2023. “Next year first semester will see the launch of a four-ton EV truck.” Following this, Enviro Automotive will introduce what it calls “an affordable EV mid-sized car. We are currently in the process of final negotiations.” Wolvaardt tells Engineering News Online that the company’s business model is not solely focussed on DFSK EVs, as it includes more than one brand, so as “to offer different products to different target markets with different mobility needs”. “The truck is from Dayun, for example. At this stage, however, it is only Chinese brands.” “We don’t want to announce the EV car brand yet, because of a nondisclosure agreement and of where we are with the contract negotiations,” he adds. Wolvaardt says Enviro Automotive currently has two dealer outlets in Gauteng. “We are finalising our distribution strategy and dealer/agent list, which will be announced at the official launch of the panel van later this year, or early next year. “Customers will be supported by our technical teams at dealer level and head office level,” he notes. “The great thing about CEVs is that they need minimum maintenance, so we don’t need a lot of traditional dealerships with lots of service and maintenance parts and people.” When considering the South African market, Wolvaardt believes the local CEV sector will gain momentum “very quickly because of the massive cost savings and efficiencies” made possible through electrification. “It is a rational decision-making process with cost benefits, while it also assists companies in reducing their carbon footprint. “On the passenger EV side, however, it will take longer to see the use of products by the masses because it is expensive at this stage. “The buying motivators for an EV for private use and a CEV are very different,” says Wolvaardt. “For EVs it will be emotional, but for CEVs it is primarily cost-driven.” The EC35 Chinese automaker DFSK (Dongfeng Sokon Automobile) is a joint venture between Dongfeng Motor Company and the Chongqing Sokon Industry Group. Following the introduction of its C-Series range of delivery bakkies and panel vans in 2009, the company extended the range by introducing the battery-electric EC35 panel van and EC31 bakkie in 2018. The load compartment of the two-seater EC35 to be launched in South Africa is accessible via sliding doors on both sides of the panel van, as well as the tailgate. The vehicle offers a payload of 1 015 kg and a loading space of 4.8 m³. The EC35 is equipped with a single synchronous electric motor that produces 60 kW and 200 Nm of torque. It also features a 38.7 kWh lithium-iron phosphate battery. Charging the battery will cost R56.50, promises Enviro Automotive, yielding a travel distance of up to 270 km, depending on the load and traffic conditions. With a fast charger, the battery could be charged from zero to 80% in less than an hour. The EC35 features antilock braking and electric power steering. The panel van also has air-conditioning, a reverse camera, rear parking sensors, Bluetooth and a touchscreen infotainment system. It is backed by DFSK’s three-...
Steel producer ArcelorMittal South Africa (AMSA) on October 20 launched its newly acquired ArcelorMittal Rail and Structures (AMRAS) facility. This follows the successful acquisition of the former Highveld Structural Mill in eMalahleni, a transaction which was effective from August. The official launch of the AMRAS facility was undertaken by Trade, Industry and Competition Minister Ebrahim Patel, who commented that, with this being the sole mainline rail production facility in South Africa and on the continent, it showcased the country and region’s ambitions to be a globally competitive player in the steel market and to bringing back its past mainline rail production capacity. He congratulated all stakeholders for bringing this to fruition, especially given that the facility was slated to be lost following the closure of Highveld Steel and Vanadium. Patel also highlighted the localisation benefits the facility would provide, with it slated to produce R500-million worth of products and displace close R1-billion of products that would otherwise have been imported. The facility already produces rail line products for sale to mining companies and the products are also set to be exported. The importance of localisation was reiterated by AMSA CEO Kobus Verster, who said the products needed for railway infrastructure development and rolling stock could all be sourced and developed in South Africa. Since 2017, while operating the heavy structural mill under contract, AMSA localised about 80 000 t/y of heavy structural sections, replacing about R10-billion a year of imported steel with local South African production for the past five years. With the conclusion of this acquisition, AMSA will create about 250 quality and permanent manufacturing sector jobs. Patel explained that this constitutes 200 temporary jobs becoming permanent ones, and 50 additional jobs being created. Patel lauded the impact this job creation would have on individuals, as well as the positive impact this would have on building the local community. The acquisition of this facility is posited to provide AMSA with an African edge to producing heavy-gauge mainline rail products to high-quality standards and to facilitate extended opportunities to address the critical railway infrastructure programmes in the region. Verster said the acquisition would enable the company to deliver global research and development and best-in-class operational practices of heavy structural rolling mills in South Africa. This would be leveraged from the group’s expertise in manufacturing heavy structural sections and rails, with global plants around the world supplying specialised structural steel products. GROWTH PROSPECTS Verster also touched on AMSA’s restructuring process and strategy from the past few months, noting that this was aimed at returning the company to profitability and creating sustainable operations. He said AMSA has enjoyed reasonable success in this regard; however, this had entailed the difficult process of adjusting its footprint and closing down some operations. Verster highlighted some positive as ASMSA having diversified its raw material base, which has enabled access to the network for smaller companies. “A sustainable and profitable steel industry, which includes several players, is vital to ensure growth of the South African economy and for it to be a key player as the country looks to reindustrialise,” he outlined. Verster also emphasised the importance of decarbonisation to AMSA, with the company largely in alignment with the global ArcelorMittal group’s targets of a 25% reduction in carbon emission by 2030, and to be carbon neutral by 2050. Verster said this would entail a three-pronged approach, mainly, a focus on renewable energy and energy efficiency; operational efficiency; and carbon capture. “AMSA will look to pursue growth opportunities as they arise; and will also support South Africa in its development aims,: Verster outlined. In this vein, Patel ...
Cabinet has officially endorsed the Just Energy Transition Partnership Investment Plan (JETP-IP) following a presentation it received at its latest meeting, held on Wednesday October 19. “After welcoming a presentation on the JETP and the JETP-IP, Cabinet endorsed the JETP-IP and expressed its appreciation for the detailed work undertaken to develop it,” the Cabinet statement released on October 20 reads. The statement notes that the JETP-IP outlines the investments required to achieve the decarbonisation commitments made by government, while promoting sustainable development, and ensuring a just transition for affected workers and communities. In a post-Cabinet briefing Minister in the Presidency Mondli Gungubele said that more details on the JETP-IP - which is backed by France, Germany, the US, the UK and the European Union and which is expected to be formally endorsed at the COP27 climate negotiations in Egypt next month - would be provided during a briefing that will be hosted soon by the Inter-Ministerial Committee on Climate Change. At COP26 in Scotland last year the JETP partners made an $8.5-billion offer to support South Africa’s transition away from coal and to support workers and communities that could be negatively affected by such a shift. Following COP26, South Africa established a Presidential Climate Finance Task Team, headed Daniel Mminele, to finalise the JETP-IP, which is expected to focus primarily on electricity sector projects, including much-needed investment into the grid, but also include funding support for the development of electric vehicle and green hydrogen industries. This week, Eskom CEO André de Ruyter again stressed the need for the bulk of the funding to be directed the way of the electricity sector and questioned the desirability of diverting concessional funds to the other two sectors. In the case of green hydrogen, he noted that surplus green electrons were a precondition for the industry’s development and that that precondition was currently absent in a context where Eskom was having to implement loadshedding to stabilise the grid. De Ruyter also questioned whether concessional funding should flow to automotive companies and their shareholders. Forestry, Fisheries and the Environment Minister Barbara Creecy noted that the $8.5-billion would translate to about R150-billion, which fell well short of the more than R1-trillion South Africa required over the period to transition to an energy system aligned with the decarbonisation pledge. However, she expressed the hope that the funding would serve as a catalyst for further private investment in support of the transition and encourage stakeholders to comment on the JETP-IP, which she said would be released for public consultation before year-end.
Eskom told lawmakers on Wednesday that a fire in the gas air heater of Kusile Unit 5, which occurred during a commissioning exercise on September 17, represented a major “setback” and could delay the 800 MW unit’s entry into commercial operation by up to a year. Under the revised scheduled for the much-delayed Kusile build programme, Unit 5 was expected to enter into commercial operation in December 2023. Addressing a Standing Committee on Public Accounts meeting, COO Jan Oberholzer said the cause of the fire had not yet been determined by the contractor, Mitsubishi Hitachi Power Systems, which he referred to as MHI, but that sabotage was not currently suspected. He noted that a similar incident had occurred during the commissioning of Kusile Unit 2, which had delayed the introduction of the unit by 12 months, and that a similar delay was, thus, being assumed preliminarily for Unit 5. Eskom expected to receive details outlining MHI’s new commissioning plan for the unit by Sunday, October 23, but Oberholzer confirmed that the fire represented a major setback, particularly in a context where the utility urgently required additional generation capacity to reduce the risk of loadshedding. “Unfortunately I have to be open that unit number five will not be placed into commercial operation by December 2023,” he said, signalling that initial indications were that the unit might achieve that milestone only in December 2024. “Again, I need to emphasise that this was during the commissioning of that specific component and we don't believe that there was any foul play.” The commercial implications were still being calculated, but it was estimated that it would add some R150-million a month to Kusile’s interest during construction (IDC). Work on Unit 6, meanwhile, was continuing and it remained on schedule for commercial operation by the middle of 2024, with efforts under way to bring that date forward to May 2024. MEDUPI UNIT 4 At Medupi meanwhile, where all six units were in commercial operation prior to a catastrophic hydrogen explosion at Unit 4 in 2021, Eskom was planning to return Unit 4 to service only in September 2024. This, together with extended maintenance at the Koeberg nuclear station – which had been further prolonged because the replacement of the three steam generators at Unit 2 had to be postponed earlier this year owing to Eskom’s failure to complete the required containment facility on time – would increase the risk of power cuts. The energy-short grid would be without at least one unit of Koeberg for a period of about a year and a half, which would increase the intensity of loadshedding by one stage every time it was implemented. Nevertheless, Oberholzer expressed confidence that Koeberg would secure its life-extension licence before the current licence expired in mid-2024. Oberholzer again confirmed that the Koeberg life-extension capital expenditure was far higher than the R20-billion announced in 2010, but said he could not yet provide the new value. Lawmakers were also provided an update on the cost and cost to completion of both Medupi and Kusile, which were set to cost R145-billion and R161.4-billion to complete respectively, before IDC. The remaining cost to complete Kusile was stated as being R14-billion, while the figure for Medupi was pegged at R18.95-billion. The Medupi figure excluded the cost of installing flue gas desulphurisation (FGD), which could involve an additional R35- to R40-billion and remained a condition of a World Bank loan that had been raised to help fund the project. CEO André de Ruyter reported that the FGD technology installed at Kusile was a single point of failure and that trips associated with the plant were a key reason for Kusile’s poor energy availability factor (EAF) currently. Eskom was pursuing an operations and maintenance contract with General Electric, which supplied the FGD to Kusile, in an effort to improve the plant’s performance. The utility, which has never before oper...
South Africa’s Just Energy Transition Partnership (JET-P) investment plan, which will seek to unlock $8.5-billion in concessional funding for decarbonisation projects as well as for coal worker and community support programmes, is currently in the Cabinet process ahead of its anticipated launched during the COP27 climate negotiations to be held in Sharm El Sheikh, Egypt next month. Addressing a Standard Bank climate conference on Tuesday, Forestry, Fisheries and the Environment Minister Barbara Creecy also reported that the JET-P investment plan, once launched, would be released for public comment. “We are obviously urging that you would look at it, that you would understand it, that you would see how it lays out a vision for the way in which we would want to support the transition in these three sectors [of electricity, electric vehicles and green hydrogen]. “And what we're very sincerely hoping is that [the plan] would create appetite from the private sector and would begin to mobilise the significant quantities of financing that we're going to need over the next ten years,” Creecy said. She again stressed that, while the $8.5-billion being offered by the JET-P partners of France, Germany, the US, the UK and the European Union would translate to about R150-billion, it nevertheless fell well short of the more than R1-trillion South Africa required over the period to transition to an energy system aligned with the decarbonisation pledge it made at COP26 in Glasgow, Scotland in 2021. Creecy underlined the economic risks of not moving fast enough to decarbonise, highlighting that both Italian and Indian buyers of South African forest fibre used in garment manufacturing had cautioned her as the minister responsible for forestry that they would seek alternative sources of supply unless South Africa halved the carbon content of its forest fibre by 2030. While some of the country’s main trading partners were planning to impose carbon border adjustment measures from 2026, Creecy warned that, even absent such restrictions, South Africa’s top exports by value would become vulnerable to changes in global demand as countries decarbonised. That said, she stressed that the country’s recently adopted Just Transition Framework insisted on the transition being implemented in such a way as to ensure that it not only enhanced energy security but also assisted the country in dealing with economic inclusion, job creation and poverty alleviation. “The climate transition has to assist us with our overall challenges as a developing country.” TRANSITION ‘INEVITABLE’ BUT NOT A ‘BINARY DEBATE’ Speaking on the same platform, Eskom CEO André de Ruyter described the energy transition as inevitable, saying “you just cannot hold back this wave with your bare hands, it is going to happen”. Nevertheless, he contested the proposition that the transition was a “binary debate” between coal and renewables. “Eskom, and hence South Africa, will be a very substantial consumer of coal for a very long period of time to come. “So the notion that somehow we will succumb to pressure from the ‘Global North’ to sterilise all of our natural resources to satisfy pressure from international lenders is simply not substantiated by the facts.” Instead, as South Africa’s old coal fleet reached retirement age it was uneconomical to extend their lives in a context where renewables provided the lowest-cost new electricity and could be built faster than any of the alternatives. There was also appetite, De Ruyter noted, from investors to make “risk-based investments” in renewable energy, without government guarantees, pointing by way of example to the recently announced Eskom land-lease deal in Mpumalanga for a possible 2 000 MW of new capacity. He then challenged South African bankers to “start taking more risk” and wean themselves off their “addiction to National Treasury guarantees”. “Now I know that it's tied up with a single-buyer model, [but] as soon as we open up the market,...
JSE-listed group Sasol and ArcelorMittal South Africa (AMSA) have announced a joint development agreement to advance studies into two potential green-economy projects, including the potential production of green hydrogen in Saldanha Bay, which could be used to produce green steel. The two companies will also pursue a Vaal carbon capture and utilisation (CCU) study, whereby renewable electricity and green hydrogen could be used to convert captured carbon from AMSA’s Vanderbijlpark steel plant into sustainable fuels and chemicals. AMSA believes the initiatives have the potential to position AMSA as Africa’s first green flat-steel producer. At its Saldanha Works, which is currently mothballed, green hydrogen could be employed to produce direct reduced iron (DRI) through the mill’s Midrex facility. The Vaal CCU study, meanwhile, will explore capturing 1.5-million tonnes a year of unavoidable industrial carbon dioxide captured from the Vanderbijlpark Works and transporting it to Sasol’s Sasolburg and Ekandustria operating facilities where, together with green hydrogen, it could eventually replace natural gas as a feedstock to produce sustainable chemicals. Sasol also announced that it has signed a memorandum of understanding with Freeport Saldanha Industrial Development Zone to develop a globally competitive green hydrogen hub and ecosystem within Saldanha Bay. “These potential projects are an important kick-start to our decarbonisation journey and create an exciting opportunity to contribute to the South African government’s aspirations to transition to a green economy,” AMSA CEO Kobus Verster said in a statement. “Just as importantly, by maximising the utilisation of our installed assets, we will also be stimulating economic growth in our host communities,” he added, noting that the projects could drive the re-industrialisation of both the Saldanha and the Vaal regions. Sasol energy business executive VP Priscillah Mabelane expressed enthusiasm for the prefeasibility and feasibility studies, which she said could unlock South Africa’s potential to be a global green hydrogen and derivatives producer. “These studies are anchored by the local need for green hydrogen and sustainable products, cementing Sasol as the leading contributor to the development of Southern Africa’s green hydrogen economy,” Mabelane said. Both industrial groups have stated goals of achieving net-zero carbon emissions by 2050.
The Automotive Industry Development Centre Eastern Cape (AIDC-EC) has entered into partnerships with the Automotive Component Manufacturing Association of India (ACMA) and the Japan International Co-operation Agency (JICA). In terms of the agreements JICA and ACMA will assist the AIDC-EC to roll out technical training programmes to automotive component suppliers in the Eastern Cape. The Eastern Cape automotive sector is responsible for 38% of South Africa’s total vehicle production and 50% of the country’s auto exports. AIDC Eastern Cape CEO Thabo Shenxane says that one of the goals of the partnerships is to embed a culture of Kaizen into the supply chain. Kaizen is a global management method that drives quality and productivity improvement (QPI). “Kaizen will bring measurable competitive improvement outcomes that will capacitate suppliers to access new markets, attain international benchmarks and develop new opportunities,” explains Shenxane. “The development of Tier 2 to Tier 4 suppliers will make a major impact on South African Automotive Masterplan 2035 objectives, which targets an increase of 20% of locally produced components in vehicles made in the country.” Empirical results from JICA on Kaizen programmes at eight Tier 1 South African manufacturers between 2016 and 2019 showed that productivity more than doubled; on-time delivery improved from 73% to 95%; overtime work dropped on average from 13.8 hours a week to 4.6 hours a week; and lead times, on average, improved by 40%. “The results clearly justify scaling up of Kaizen in the automotive manufacturing sector,” says Shenxane. “And, like JICA, we believe that South Africa can compete with India and Thailand’s automotive component industries – but we must have a vision and plan for this.” As a key activity of the partnership, the AIDC-EC and JICA are introducing a QPI Kaizen programme to Tier 2 and 3 automotive suppliers across the country’s major auto manufacturing hubs. “We have started the process to work with 120 Tier 2 and 3 component suppliers over the next three years,” notes Shenxane. Additional training will also be implemented in terms of the AIDC-EC’s partnership with ACMA, aimed at addressing knowledge gaps and low competence through continuous skills transfer. ACMA In terms of the AIDC-EC’s partnership with ACMA, highly structured cross-functional skills development and training programmes; blended physical training; cross-countries knowledge exchange; simulation techniques; and shopfloor project implementation will be included in training programmes for the Eastern Cape supply chain, says Shenxane. “It has been noted that suppliers of all sizes have realised the effectiveness of blended learning approaches, where employees have the opportunity of engaging in both hands-on and virtual-based learning. “This provides unique opportunities for training, and will enhance networking and automotive-related activity between India, Japan and South Africa.” Toyota Wessels Institute for Manufacturing Studies director Dr Justin Barnes underlines the importance of nurturing the manufacturing sector in South Africa. According to Barnes, manufacturing value added per capita barely grew in the 30 years between 1990 and 2019. Manufacturing contributed 12% of South Africa’s economy in 2019, 17% in 2000 and 21% in 1990. Moreover, Barnes says South Africa’s manufacturing sector employed more people in 1969 than it does today. “If we had kept manufacturing at 1990 levels we would have employed over a million people more. “The sector is shedding jobs and becoming more capital intensive at a time of an employment crisis. To achieve a high-income society, the driving force is manufacturing productivity and good jobs, whereas the economy is now welfare dependent.” Barnes notes that the local auto industry has performed better than the manufacturing sector at large, increasing vehicle production from 376 000 units in 1995, to 632 000 in 2019, but adds that the “dark cloud” is t...
Volvo Trucks South Africa (SA) has started assembly of Euro 5 specification trucks at its plant in Durban, KwaZulu-Natal. Euro-5 truck variants have been available in South Africa since 2012, but are now for the first time assembled locally. “More customers have ambitions to improve their environmental footprint, which is driving the uptake of Euro-5 models locally,” says Volvo Trucks SA sustainability manager Eric Parry. “In general, the Euro-5 engines have a lower fuel consumption than an equivalent Euro-3 unit, which means that even though total costs are roughly the same because of the need for AdBlue diesel exhaust fluid in the vehicle, the carbon dioxide emissions are reduced with the lowering of fuel consumption. “There is also the significant reduction in poisonous gases from the exhaust, which in turn improves the environment around the vehicle,” notes Parry. Euro-5 assembly at the Durban plant adds to the current production line-up at the facility. Volvo Trucks SA has kicked off Euro-5 assembly with FH truck-tractors, the company’s long-haul icon, as this is the most requested Euro-5 model with local customers. More models and configurations will be added over time according to fleet owners’ demands. “The need for local assembly also arose to reduce the import duty that is applied to full imports,” says Parry. “This allows Volvo Trucks the opportunity to offer the cleaner technology in a more competitive way.” Euro-5 assembly required some layout changes at the plant to accommodate AdBlue filling, as well as for storage. Additional floor layout adjustments were also made to allow for new procedures like the assembly of AdBlue tanks and special exhaust systems. “Operators have also received advanced training to assemble the new features connected to the Euro-5 specifications,” explains plant director Aubrey Rambau. “Specialised training was also provided for road testers and product auditors to ensure the highest standards are maintained.” Solar Energy Volvo Trucks SA has installed a new solar power system to generate renewable energy for its Durban plant. A total of 440 solar panels and two solar inverters generate 243 kW of power, which meets around 60% of the plant’s energy requirements. “At Volvo, environmental care is fundamental to how we do business, and this project is another step in our energy efficiency journey,” says Rambau. Volvo trucks are assembled in 13 countries across the globe.
The Department of Water and Sanitation (DWS) is temporarily increasing Rand Water’s bulk water allocation as an emergency measure to address water shortages in South Africa’s economic hub. Rand Water abstracts 4 400 megalitres of water and has already exceeded this allocation by over 1 600 megalitres since the start of the spring season to meet the rising use and demand across the Gauteng metropolitans, district and local municipalities. Owing to this, Rand Water last week imposed a water supply reduction of 30% to safeguard the integrity of the system and to ensure continued water supply, further applying the flow control management of its reservoirs to stabilise and avoid the emptying of the reservoirs and a complete system crash. “We note the increase in water use and restrictions imposed by Rand Water in response to deteriorating water levels in their reservoirs, therefore we will increase temporarily the allocation for abstraction of bulk water to Rand Water’s system in order to meet the demand,” says Water and Sanitation Minister Senzo Mchunu. This had followed an emergency meeting on Monday where the DWS engaged with Rand Water, representatives of the three metropolitans, and district and local municipalities affected by Rand Water’s water restrictions. “This should bring relief to some metropolitans, namely Johannesburg, Tshwane and Mogale City district municipality, however the measure is for a period of 9 months while we seek more permanent solutions to water use and management,” he points out. However, municipalities need to come up with measures to deal with those wasting water, including imposing penalties and addressing the challenge of water leaks on municipal reticulation systems. “As a country we are experiencing the scarcity of water, yet we allow for up to 40% of our water to be lost to leaks. This undermines our efforts to address water challenges.” A Water Room committee, comprising DWS, Rand Water and all Gauteng municipalities as well as the business sector, will be set up to provide holistic coordination, provision and management of the water system in the province. Water use has increased over the past few weeks owing to a continued heatwave and delayed summer rains in the inland provinces, which has resulted in potable water being used for watering gardens and car wash enterprises, which typically would have been taken care of by rains, as well as water losses owing to leaks in the reticulation part of the system. “There continues to be overuse in the province which puts a strain on the system that led to Rand Water having to inform their customers of the need to restrict. This does not imply that there is a crisis of water availability but is rather a means to manage the system through reduction and therefore bringing balance to the system,” Mchunu concludes.
The Master Builders Association (MBA) North has issued a practice note for its members aimed at helping them fight back against what it calls unethical contractual practices that have become prevalent in the industry. MBA North executive director Mohau Mphomela says the association has noted with concern that a growing number of its members are finding themselves in trouble owing to unethical contractual practices forced on them by some professionals and employers. “When you start to see contractors and subcontractors who have been in business for decades having to go into business rescue, then it’s clear there is something wrong,” he says. “We convened a meeting with some of our leading members – contractors and subcontractors – to hear from them what challenges they were facing when it comes to contracts. The practice note is the fruit of that meeting.” The note provides guidance about best practice when it comes to contracting for both contractors and subcontractors. Brad Boertje, a construction risk management consultant and alternative dispute resolution practitioner for the MBA North, says that standard industry contracts, such as Joint Building Contracts Committee (JBCC) contracts, are the gold standard and should be followed to the letter. These standard contracts should ideally not be amended, but, if amendments are made, they need to be agreed to by both parties and not one-directionally imposed by the developer or principal agent. It is also vital that contractors and subcontractors take the time to populate the contract with all the relevant data. If a dispute arises later, an incomplete contract could prejudice the contractor, says Boertje. The contract should be the full and complete record of all parties’ obligations to each other, he adds. Contractors should not accede to requests to take on out-of-scope work on the promise that they will be “looked after” at a later stage – only to find that the client will not honour that payment. The JBCC contracts are necessary because the Common Law does not cater for issues specific to the construction industry, says Boertje. Another challenge is the issuing of incorrect payment certificates, or the non-issue of payment certificates. Boertje cautions that “negative” payment certificates have become common, but they often do not reflect an accurate certification of the works. “Contractors often find themselves having to litigate to get their money, which greatly impacts their cash flow.” Construction or performance guarantees are yet another area where contractors are experiencing issues. Boertje points out that contractors have the right to choose the kind of security they wish to offer. He advises that construction guarantees are preferred to retentions. In the latter case, if the main contractor runs into business difficulties, the subcontractor may find that his or her retention is at major risk of being released. “Because business conditions are so tough, contractors and subcontractors often find themselves being forced to condone unethical contractual practices, and then find themselves in trouble,” notes Mphomela. “Yet they find it hard to fight back for fear of being precluded from future tenders. “As an association, the time has come to say enough is enough. We must present a united front to demand adherence to ethical practices – to the benefit of all stakeholders.”
Four independent power producers have been named as successful bidders for the lease of grid-ready Mpumalanga land, which is being made available by Eskom as part of efforts to accelerate the development of wind, solar and storage projects in the province – investments that should, in time, help lower the risk of loadshedding and provide new employment and business opportunities in the region as coal plants are decommissioned. The entities identified as having secured the 25- to 30-year property leases for parcels covering a total of 6 184 ha of land near the Majuba and Tutuka coal stations are HDF Energy South Africa, Red Rocket, Sola Group and Mainstream Renewable Power Developments South Africa. The bidders, which were selected following a competitive process initiated in April, are now expected to finalise comprehensive feasibility studies to determine which technologies, and at what scale, they will build on the sites. In addition, they will need to secure private offtakers for the electricity, which will not be bought by Eskom and will, thus, attract no National Treasury guarantee, as is currently the case for the utility-scale projects procured under the government-run Renewable Energy Independent Power Producer Procurement Programme. Instead, the private generators will sign bilateral power purchase agreements (PPAs) with private offtakers, and the projects should, thus, pose little or no financial risk to taxpayers or Eskom. The final technology mix and size of the projects is yet to be determined, but Eskom CEO André de Ruyter stressed that the leases include a “use-it-or-lose-it” clause so as to ensure that the utility retains some control should projects fail to meet certain developmental milestones over the coming months. Speaking at a signing ceremony, De Ruyter expressed confidence that the inaugural leasing of Eskom land would result in the development of wind and solar projects with a combined capacity of at least 2 000 MW over the coming 24 to 36 months, as well as the development of some battery storage capacity. The electricity would also be wheeled across the Eskom grid, generating revenue for the cash-strapped utility from existing assets in the province. It was also confirmed that Eskom would be issuing new tenders for other land parcels every quarter and that up to 30 000 ha could eventually be made available. The next phase, to be initiated in the coming months, will focus on properties around the Kendal and Kusile power stations in Mpumalanga, as well as the retired Ingagane power station in Newcastle, KwaZulu-Natal. Efforts would be made, with the assistance of Operation Vulindlela, to ensure that various land-use and environmental authorisations were secured on an expedited basis that projects could proceed as soon as possible. “By making Eskom land available close to the power stations, where there is sufficient grid capacity, we have taken an innovative step to find the quickest way possible and within our scope of influence to boost the country’s generation capacity,” De Ruyter said.
Engineering News Editor Terence Creamer talks about the public hearings that were due to be held this week by the National Energy Regulator of South Africa (Nersa), but which had to be rescheduled owing to a poor response; what Nersa will do next; and the overall trend of waning interest in Nersa hearings.
The National Energy Regulator of South Africa (Nersa) has announced new dates for public hearings regarding its concurrence with three Ministerial determinations opening the way for the procurement of 18 771 MW of new electricity capacity, having initially cancelled hearings scheduled for this week, owing to a lack of response. In a notice issued on October 13, Nersa announced that the time for public comment regarding its concurrence with the determinations had been extended and invited stakeholders to attend rescheduled virtual hearings on October 20 and 21, between 13:00 and 17:00 on both days. Members of the public and stakeholders wishing to attend or present their views were requested to notify Nersa by October 19. The fact that no stakeholders had approached the regulator to make input on the determinations came as a surprise, given that some questions had been raised recently about a determination for 3 000 MW of gas-to-power. Initially, Nersa said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019, or IRP2019. It later circulated an erratum on September 12 clarifying that the 3 000 MW arose from an Eskom application to deviate from the IRP2019 for a combined cycle gas power plant at Richards Bay, in KwaZulu-Natal. It was anticipated that this deviation request would attract stakeholder comment, particularly given that some environmental groups had approached the Gauteng High Court recently to have the environmental authorisation for the project reviewed and set aside. In a judgment delivered on October 6, Judge Anthony Miller dismissed an application for the granting of the environmental authorisation to be reviewed and set aside. However, he ordered that a copy of the authorisation and the conditions attached, which had been published in English, be translated into isiZulu and published in at least two newspapers that circulated widely in the Richards Bay area of KwaZulu-Natal. The other two determinations delivered to Nersa in August by Mineral Resources and Energy Minister Gwede Mantashe are for 14 771 MW of wind and solar photovoltaic (PV) generation allocated for in the IRP2019, but not yet catered for in an existing Ministerial determination for wind and solar PV, and 1 000 MW of ‘Other Distributed Generation, Co-Gen, Biomass, Landfill’ capacity for 2023 and 2024 also outlined in Table 5 of the IRP2019. In confirming the extension for comment, Nersa cautioned that should it not receive any requests to present at the advertised public hearing by the closing date of this notice, it “retains the right not to hold the scheduled hearing”.
As the impasse between Transnet and its two recognised unions – the United National Transport Union (Untu) and the South African Transport and Allied Workers Union (Satawu) – continues, organised business has called for a “swift, sustainable resolution”, as mining exporters warned that they were losing R815-million every day the strike continued. In a joint statement, Business Unity South Africa (Busa) and Business Leadership South Africa rejected short-term solutions, such as temporarily increasing levies, which they said could have unintended consequences. “We need a quick, sustainable resolution to this strike, not ad hoc solutions,” Busa CEO Cas Coovadia said. “The strike risks severe damage to the economy not just in the short term but also the longer term if it drags on and South Africa’s reputation for logistics gets further tarnished.” Both organisations rejected earlier media reports suggesting that they would support a so-called ‘Avoidance of Strike Levy’. They also expressed anxiety over the prospect of the strike enduring for more than a few days, warning that cargo ships would not only skip slots at South African ports but start taking South African ports out of schedules in the months ahead. “This will add significant costs to either airfreight items or truck goods to and from other African ports – which will add to the inflation pressures South Africans are facing.” Minerals Council South Africa, meanwhile, estimated that bulk mineral exporters were losing R815-million daily, because they had been unable to rail and load 357 000 t of iron-ore, coal, chrome, ferrochrome and manganese onto ships. “On average, South Africa exports about 476 000 t of bulk minerals a day worth R1.06-billion. “We estimate that just 120 000 t of minerals worth R261-million are being exported daily, [given that] mineral export harbours are operating at between 12% and 30% of their daily averages,” the council said in a statement. As with the other orgnaised business formations, the council also warned that the damage caused by the strike was not only limited to the immediate losses and could have longer-term consequences, including damaging South Africa’s reputation as a reliable supplier to global markets. “The Minerals Council is deeply concerned that the labour action at Transnet will compound the losses our bulk mineral exporting members are already experiencing because of Transnet struggling to meet targeted annual tonnages on its rail network and throughput at ports.” The council has estimated previously that there had been an export loss of R50-billion on an annualised basis this year for iron-ore, coal, chrome, ferrochrome and manganese exporters as measured by delivered tonnages against contracted rail volumes. “In contrast, R151-billion could be gained in additional exports, with the concomitant benefits of employment in mining increasing by 40 000 jobs to 500 000, the fiscus benefiting from improved tax revenue and higher revenues for Transnet if all rail and ports systems were optimally and efficiently run at design capacity.” EXTREMELY CONCERNED In a separate joint statement, Ministers Pravin Gordhan, Thulas Nxesi and Thoko Didiza said they were “extremely concerned” about the negative impact of the strike on the South African economy. “It is the view of government, that it will be in the interests of the country to find a speedy resolution to this impasse and for parties to continue to engage and, where appropriate, to employ the facilitation services of the Commission for Conciliation, Mediation and Arbitration (CCMA). “Our country cannot afford further job losses in other sectors of the economy and the interruption of imports and exports to and from South Africa,” the three Ministers said. Despite this growing pressure, Untu and Satawu have indicated they were likely to reject the latest three-year offer tabled by Transnet following two days of CCMA-facilitated negotiations. The wage offer, which Transnet said would b...
The National Energy Regulator of South Africa (Nersa) cancelled two days of planned hearings called to receive public comment on the regulator providing its concurrence to three Ministerial determinations opening the way for the procurement of 18 771 MW of new electricity capacity. Nersa said that the hearings had been cancelled as no requests were received from stakeholders to make representations on the matter. In terms of Section 34 of the Electricity Regulation Act, the regulator is required to provide its concurrence prior the conclusion of the determination process by the Minister of Mineral Resources and Energy. It is also required to consult the public before offering such concurrence. This was confirmed in 2017 when the Western Cape High Court declared “unlawful and unconstitutional” government’s 2013 and 2016 determinations relating to the procurement of 9 600 MW of new nuclear on the basis that they had not been subjected to Nersa-led public consultations. Three consultation papers were published by the regulator on August 26 regarding its concurrence with proposed Ministerial determinations delivered to it by Minerals Resources and Energy Minister Gwede Mantashe for the procurement of 14 771 MW of wind and solar photovoltaic (PV) generation, 3 000 MW of gas-to-power and 1 000 MW of ‘Other Distributed Generation, Co-Gen, Biomass, Landfill’ capacity. The lack of concurrence on the new renewables Ministerial determination resulted in the National Energy Crisis Committee deciding recently to reduce the size of Bid Window Six of the renewables procurement programme from 5 200 MW to 4 200 MW. President Cyril Ramaphosa initially announced that the size of the round would be doubled from 2 600 MW, but the solar PV allocation provided for by a previous determination was insufficient to allow for a doubling in the PV allocation to 2 000 MW. Therefore, only the wind allocation was doubled to 3 200 MW, while the solar allocation was held at 1 000 MW. The potential opportunity cost became apparent after the bid submission deadline of October 3, when the IPP Office confirmed that the PV allocation was more than five-times oversubscribed with the combined capacity of the 33 solar PV bids being about 5 550 MW. By contrast the wind allocation was only 30% oversubscribed with the 23 bids having a combined capacity of about 4 100 MW. GAS DEVIATION In addition, Nersa circulated an erratum on September 12 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. In its original consultation paper, the regulator said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019. In the erratum, however, it clarified that the 3 000 MW arose from an Eskom application to deviate from the IRP2019 for a combined cycle gas power plant at Richards Bay, in KwaZulu-Natal. It was anticipated that this deviation request would attract stakeholder comment, particularly given that some environmental groups had approached the courts recently to have the environmental authorisation for the project reviewed and set aside. That application failed. The fact that no requests were made to make oral submissions also raised questions as to whether the hearings had been sufficiently advertised, as notice of the hearings could not be found on the Nersa website, nor on its social media platforms. There had been newspaper adverts, however. Engineering News was unable to immediately confirm whether or not Nersa planned to readvertise the public hearings for a later date.
The Passenger Rail Agency of South Africa (PRASA) is being totally rebuilt, says PRASA strategy GM Anna-Marie Lubbe. “We are hard at work rebuilding PRASA. It is not a recovery, it is not a rehabilitation [process] – it is a total rebuild.” Lubbe adds that PRASA is focused on building a new rail system that will allow it to consistently offer a service that is fast, reliable and safe. “I think that has been our downfall in the past; that we could not provide a consistently good service.” PRASA operates a commuter passenger rail service, as well as a long-distance passenger rail service. Lubbe says that PRASA saw destruction at a massive scale prior to Covid-19 and during the pandemic, especially on Cape Town’s central line and the Mabopane line in Gauteng. Overhead traction equipment disappeared, substations were vandalised and signalling and telecommunications systems were destroyed. “People also carried away our perway – our rail tracks. This is not someone who needs to buy bread, this is organised crime,” says Lubbe. All of this meant that PRASA could only restart some services – six out of 40 lines – following the hard lockdown related to Covid-19. “We are currently sitting at 15 lines, with 10% of the trains we normally run. Even where we introduced trains, we have limited service,” notes Lubbe. She explains that PRASA cannot currently increase train frequency and speed and, therefore, ridership, because of the faltering signalling systems that must be rebuilt. Lubbe says PRASA is rebuilding the commuter rail system corridor by corridor, with a focus on those lines carrying the most commuters first. The first phase is to restore the service with a peak and offpeak service, but without fully functioning signalling systems and stations. Phase 2 aims to revitalise and upgrade stations, build footbridges and have a programme of cleaning around the stations. A war room that meets every week and reaches down to provincial level has been created to execute this programme. “With the war room we have also been able to unlock some of our procurement issues,” adds Lubbe. The corridors that PRASA wishes to still tackle this year includes the Central line from Langa to Nyanga. In Gauteng, the aim is to retore the Johannesburg to Naledi corridor; Johannesburg to Leralla; and Pretoria to Johannesburg. In KwaZulu-Natal the goal is to restore the Durban to KwaMashu and Durban to Umlazi lines next. Lubbe adds that there is a strong focus on strengthening security systems within the new PRASA. “We do not have a closed [rail] system – one of the few in the world. This open system leaves us vulnerable to theft and vandalism, so we want to close off our system.” This means that all the depots are currently being walled off, with the rail corridors to follow, with the Mabopane service first in line. “This is to protect commuters and our fare revenue,” says Lubbe. “This will all contribute to enabling us to run a consistent service with people who pay for the service they are using.” Lubbe spoke at a Transport Forum event.
The Presidency insists that progress is being made to implement the plan outlined by President Cyril Ramaphosa on July 25 to tackle load-shedding, which breached 4 100 GWh by the end of September – a level that is materially worse than the 1 776 GWh shed in 2021, the country’s previous worst load-shedding year. However, The Presidency’s Rudi Dicks cautions that rotational power cuts are likely to remain a reality for at least another 18 months. In a presentation delivered during the Chartered Governance Institute of Southern Africa’s recent conference, Dicks reiterated government’s acknowledgement that the power crisis represented the “single most important constraint on economic growth and job creation”. He said that was why Ramaphosa had taken direct political responsibility for driving the interventions announced in July and was personally chairing the National Energy Crisis Committee (Necom). The committee also includes Minister in the Presidency Mondli Gungubele, Mineral Resources and Energy Minister Gwede Mantashe, Forestry, Fisheries and the Environment Minister Barbara Creecy, Public Enterprises Minister Pravin Gordhan, Finance Minister Enoch Godongwana and Trade, Industry and Competition Minister Ebrahim Patel. Dicks himself oversees Operation Vulindlela, officials from which are performing secretariat functions for Necom, together with officials from the Department of Mineral Resources and Energy and the National Joint Operational Intelligence Structure. The plan includes both supply and demand interventions designed to close the gap between daily peak demand of about 33 000 MW and the 28 000 MW that was available for supply on average on most days. Dicks reported that 20 of the plan’s 49 milestones – which ranged from efforts to improve Eskom’s plant performance and the procurement of surplus private and regional power, to the streamlining of regulatory processes to allow for the accelerated construction of private generation capacity – were progressing but that more time was needed to ensure that the interventions could make a sustainable impact. “I'm not going to promise that load-shedding is going to end tomorrow; I don't think load-shedding is going to end in six months or even within 12 months. “But we are working towards ensuring that we reduce the risk of load-shedding and, if we are able to implement this plan, we think in 18 months’ time we will be able to [stabilise the grid],” Dicks said. He highlighted in particular Operation Vulindela’s success in unlocking the market for investment in new embedded generation capacity, reporting that it has supported, or is currently supporting, the fast-tracking of regulatory approvals for some 97 projects with a combined capacity of over 8 000 MW. Most of these were solar photovoltaic projects, but there were also battery storage, biomass, diesel and wind projects in the pipeline. The implementation of the plans under Necom, which is being supported by capacity from the private sector, were being driven by nine workstreams, including: Workstream 1, which is focusing on improvements in the performance and availability of existing Eskom plant, as well as expanding and strengthening transmission infrastructure; Workstream 2, which is aiming to cut red tape and expedite authorisations for independent power producers and embedded generators through an automated ‘one-stop shop’; Workstream 3, which is focusing on expediting the connection of generation capacity from existing and future procurement rounds, as well as on measures to enable private investment and small-scale embedded generation; Workstream 4, which is seeking to enable the emergency procurement of electricity and maintenance; Workstream 5, which will develop a detailed plan to improve demand management and ensure implementation of energy efficiency and customer response measures; Workstream 6, which is overseeing a coordinated plan by law enforcement agencies to address sabotage, theft and fraud at Eskom; W...
A judgment handed down by the Makhanda High Court on Friday [October 7] found that Transport Minister Fikile Mbalula and his Eastern Cape counterpart have failed to fulfil their legal obligation with regards to stopping the attacks on long-distance coach company Intercape. Intercape turned to the courts after it “repeatedly requested” government to intervene and stop the ongoing attacks on the bus service by taxi associations. The company reports that it has been the victim of widespread and ongoing acts of violence and intimidation since 2015. During this time, it has lodged more than 150 criminal cases with the police, with more than 70 of those in the Eastern Cape. Judge John Smith has ordered Mbalula and Transport and Safety MEC Xolile Nqatha to liaise with the South African Police Service to formulate an action plan “to ensure that reasonable and effective measures are put in place to provide for the safety and security of long-distance bus drivers and passengers in the Eastern Cape”. Smith ordered that the action plan must be delivered within 20 days – October 28. He also slammed the Mbalula and the office of the MEC for having “persistently and unjustifiably breached their legal duties to intervene in the current crisis” facing Intercape. “I am of the view that the evidence clearly establishes that [former] MEC Weziwe Tikana-Gxothiwe has failed to intervene in the current crisis in any meaningful way. Insofar as the Minister is concerned, the sum total of his contended intervention was to attend a single meeting in the Eastern Cape. “[The parties] have consistently failed to respond to various requests for intervention from Intercape,” Smith found. “And it is manifest that nothing will happen if they are not compelled to comply with their constitutional and statutory obligations under court supervision.” In addition to the order for the Minister and new MEC Nqatha – appointed in August – to come up with an action plan within 20 days, Judge Smith also awarded costs in Intercape’s favour. Commenting on the judgment, Intercape CEO Johann Ferreira says it is a “shocking indictment” on both Mbalula and Tikana-Gxothiwe. “Minister Mbalula has shown no political or administrative will to intervene in the critical public transport sector which resides under him,” notes Ferreira. “He never took any of the issues we raised seriously and this amounts to gross negligence and an abdication of his constitutional responsibilities. “That it has taken an order of court to compel him and the provincial minister to take responsibility for their portfolios is outrageous.” Deliberate Strategy Smith also found that “the violence (directed at Intercape) is not random, but part of a deliberate strategy on the part of certain taxi associations. “The violence is aimed at intimidating and coercing Intercape into agreeing to the unlawful demands of those taxi associations, which, among others, are that Intercape must [increase] its prices and [reduce] the number of buses operating on different routes and must pay levies to operate in certain areas. “Intercape's dogged refusal to agree to those unlawful demands were met with further acts of violence directed at their buses, drivers and passengers. “One of these incidents led to a fatality, and the instigators of the violence have succeeded in establishing no-go zones, making it impossible for Intercape to operate in certain areas,” noted Smith. The judge also found that Tikana-Gxothiwe had “acted unlawfully” when she directed Intercape to enter into negotiations with the minibus taxi industry, and to suspend its services in certain towns in the Eastern Cape, pending the outcome of these negotiations. “That we could be instructed by an officer of the State to do something that was patently illegal to benefit a criminal enterprise is an outrage,” says Ferreira. “Our lawyers told the MEC so at the time – this was a complete dereliction of duty by an elected office bearer who took an oath of office t...
The strike by employees at Transnet’s port and rail operations is going to cost the economy billions of rands and will likely set back the country’s efforts to drive a recovery, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso. Some Transnet employees have downed tools in a dispute over wage increases. Mavuso describes the strike as an act of economic sabotage that will damage government revenue, robbing it of the resources needed to provide poverty relief. Industry body the Steel and Engineering Industries Federation of Southern Africa (Seifsa) states that the South African economy is already on its knees. "Our economy is under siege as it battles a jobs, growth and hunger crisis. A devastating 63.9% of South Africans under the age of 24 are unemployed, consumer inflation is at a 13-year high and one-in-four people live below the food poverty line. "A full-blown strike at Transnet will add to the damage suffered by the South African economy. This will be as bad as load-shedding in terms of economic impact. For an economy battling to maintain momentum, this could well be the final nail in the coffin," Seifsa CEO Lucio Trentini says. The strike has forced Transnet to suspend all activity in its ports, snarling up imports and exports for the whole country. Miners and many other companies are losing billions while this goes on, with early estimates putting the costs at R6-billion a day, Mavuso states. The unions have said the strike is indefinite and 15 000 workers are not going to be working today. All ports and freight rail are not expected to operate, she adds. "This is disastrous not only to obvious sectors linked to direct imports like the medical sector, and exports, like the mining sector, but to the entire, interconnected economy. It further damages South Africa’s brand, with global cargo operators likely already moving on to other ports and further deprioritising South Africa. This is very bad news indeed," Mavuso asserts. "The decision by United National Transport Union (Untu) and the South African Transport and Allied Workers' Union (Satawu), to go on strike last week, in the middle of negotiations that were ongoing at the Commission for Conciliation, Mediation and Arbitration (CCMA), is another severe blow to the economy. “The strike is, at the very least, an act of bad faith, given that negotiations were under way at the time and several court cases are testing its legality. It caught both Transnet and government off guard," she adds. Seifsa has appealed for a constructive approach that seeks to advance the interests of the country. "Transnet, as with Eskom, is crucial to the country’s economy. Transnet’s rail and port facilities are key to exporting the country’s bulk commodity exports such as coal, iron-ore, chrome and manganese. A full-blown strike at Transnet, which seems unavoidable, will have a serious effect on the economy, as it will halt exports and put thousands of jobs on the line," Trentini notes. Exporters rely heavily on efficient rail networks and ports, but Transnet has been operating below capacity for years as it grapples with a shortage of locomotives, cable theft, vandalism, poor maintenance and outdated and slow port infrastructure. This substandard service has had a significant impact on the local steel industry and its ability to manufacture steel to meet its customers’ demands. In some instances, primary steel producers have had to shut down operating plants due to the unavailability of raw materials, at great cost to their businesses and the economy, states Seifsa. "We know that it will not be easy to make compromises, but we appeal nevertheless for a win-win approach to the negotiations, as opposed to a winner-takes-all approach. Our plea to all the negotiators, and to those from whom they obtain their mandates, is that you rise above your narrow interests and put the interests of the South African economy first, and look to settle quickly," Trentini says...
The Atterbury group and Truworths have inked a deal for the creation of a new distribution centre in Cape Town. The clothing retailer’s new facility will be built in King Air Industria, which is an Atterbury Property and Old Mutual Properties development. Truworths will lease the new building, which will consolidate all of its various Cape Town facilities under one roof. The development’s 53 000 m2 initial phase consists of a 3 000 m2 office and 50 000 m2 warehouse, and includes the option to expand to 70 000 m2. Designed to target an internationally recognised EDGE sustainability certification, the development will break ground this month, with the building scheduled for completion in September, next year. “As a result of business growth we have spent some time looking to build a larger, state-of-the-art distribution centre to accommodate our future requirements,” says Truworths CFO Emanuel Cristaudo. “This positions us well for the future and we are looking forward to the completion of this project.” The value of the development is not disclosed. Atterbury’s King Air Industria development manager Arno du Plessis adds that the development roll-out of King Air Industria is making “excellent progress and attracting a high calibre of businesses that want to be near the airport, but also seek quality, efficient premises that support both their business and sustainability goals”. King Air Industria is located between Airport Approach, Borcherds Quarry, Robert Sobukwe and Pallotti roads, and connected to the city and inland region with access to the N2 and R300 freeways. The 72 ha development is already home to The Courier Guy, operating in a 10 112 m2 facility, and Morgan Cargo, operating in a 7 500 m2 provincial head office building that includes a specialised cold storage facility. “We are enjoying great leasing momentum in the Western Cape, not only at King Air Industria, but also at other properties, including Richmond Park, where the demand-driven development roll-out is proceeding at an exciting pace,” says Atterbury leasing manager Mia Kitshoff. Atterbury has signed a deal with online retailer Takealot for a 20 400 m2 second phase of its Richmond Park distribution facility, which will take the total size to 44 000 m2 when it is completed in June next year. The property group has also signed hardware retailer Brights for a 6 000 m2 facility, which will be completed in November next year.
The Shoprite group says it has increased its installed capacity of solar photovoltaic (PV) systems by 82%, to 26 606 kWp, over the past 12 months. The 143 674 m2 of solar panels at 62 sites is equivalent to the size of 20 soccer fields. This is sufficient to power the equivalent of 3 735 households for a year, thus easing the pressure on the national electricity grid, notes the retailer. Shoprite says it is focused on further expanding its solar-powered and renewable electricity installations, while also improving energy efficiency to reduce its environmental footprint. Initiatives here include a drive to reduce electricity consumption by installing LED lights at all of the group’s sites, which has saved 399-million kWh to date. In the last financial year, Shoprite has increased its total renewable installations from 32 to 62. These installations currently produce 40 894 MWh – 11 614 MWh more than in November last year. At the same time, the group has increased its fleet of solar-powered trailers by 234, to a total of 1 041 trailers. “We are incredibly proud of our increased use of renewable electricity, and we intend to build on this in the coming years to meet our science-based emission reduction targets, including net-zero greenhouse gas emissions by 2050,” says Shoprite group sustainability manager Sanjeev Raghubir. “Furthermore, we’ve saved more than R16-million in electricity costs in the past year through our solar PV systems, and these additional savings are passed on to our customers.”
Engineering News Editor Terence Creamer talks about the closing of bidding for Bid Window 6 (BW 6) of the Renewable Energy Independent Power Producers Procurement Programme; the response to the BW 6 tender; what the outcome of this round is likely to be; the ongoing difficulties in getting energy procurement going again; and what impact this is likely to have on South Africa's energy crisis.
Sun International has broken ground on its latest development: the R295-million expansion of its Sun Vacation Club (SVC) – one of South Africa’s leading timeshare models – at the group’s iconic Sun City resort, in the North West. The group’s first significant expansion at the resort since the development of the Aviary in 2004, the Lefika Villas comprises 58 luxury villas – 48 three-bedroom villas and 10 four-bedroom villas – as well as a recreational area with a resort pool, family restaurant and kid’s play area. “We are experiencing significant demand for SVC accommodation at Sun City and this expansion will help satisfy this demand. We are confident that this development will achieve above market returns,” Sun International CEO Anthony Leeming told media during the sod-turning event this week. The development forms part of Sun International’s multimillion-rand masterplan that includes the potential development of another 200 two-bedroom units. This will be fully dependent on the success of Lefika Villas and driven by demand. The addition of Lefika Villas, which will be able to accommodate up to 400 additional guests, will increase the SVC at Sun City to 478 units once it is completed by November 2023. “Sun City remains perennially popular and post-Covid, we have seen an increase in demand from leisure, conference and sporting guests. We have invested significantly in the property and the Resort is in great condition. We are also seeing great demand for self-catering units at the Sun Vacation Club,” Leeming continues. “The Lefika Villas were born from the market demand for a high-end luxury, self-catering product at Sun City Resort. The SVC Lion suites and the three-bedroom units sold out in record time, highlighting the appetite for more space and more luxury,” explains SVC Group GM Janita Donaldson. As part of the development, there will be significant inclusion of surrounding communities in upliftment and knowledge and skills transfer projects, with a stipulated 30% build value to be allocated to local contractors, Sun City Resort GM Brett Hoppe adds. According to the development team, the design of Lefika Villas, which means “stone” in the local Setswana language, draws inspiration from the adjacent stone-walled Itlholanoga heritage site. The settlement, located on the northern face of the hill overlooking the entire valley, is rated as a level five for historic significance and is a designated provincial heritage site. Sun International enlisted the assistance of leading archaeological and heritage experts, including University of the Witwatersrand archaeology professor and Origins Centre director Mandy Esterhuyzen, who will assist with the management and preservation of this and surrounding historical heritage sites. The villas are also designed with as little intrusion of the surrounding natural landscape as possible, with all the units arranged to accommodate existing natural features, typography and views. “Special attention was also given to the preservation of existing natural features on site. The new villas have been located around existing natural topographies such as existing rock outcrops and existing trees as far as possible. The serene bush setting feels miles away from the heart of the bustling Sun City Resort which is literally two minutes away,” says Sun International development manager Mark Pitchers. Meanwhile, Sun International is continuing with several current upgrade projects at Sun City, which is home to the iconic 327-room The Palace of The Lost City Hotel, the 241-room five-star Cascades hotel, the 380-room Cabanas and the Bush Bungalows with 14 chalets, as well as the 340-room four-star Sun City hotel. The group embarked on a complete R208-million refurbishment of the The Palace of The Lost City, including the installation of a Spa and gym, which will be completed in November when the hotel celebrates its thirtieth birthday. The exclusive Salon Privé in the Sun City Hotel has also been given ...
The shortage of electricity in many African countries is about equivalent to 1% of the global average and if this energy poverty gap is to be bridged by renewable energy in line with carbon-neutral targets, Africa will need to deploy an additional 2 354 GW of renewable generation by 2050 to bring the continent up to the world average for electricity access and meet decarbonisation commitments, professional services firm PwC estimates. This increase of nearly 40 times the current installed renewables capacity of 59 GW is estimated to cost Africa about $2.6-trillion – about the current size of Africa’s gross domestic product. Exacerbating this is a rapidly changing global landscape, including climate change policy pressures, geopolitical tensions such as the Ukraine conflict, societal changes triggered by the Covid-19 pandemic and a greater awareness of planetary boundaries and social justice, PwC highlights. However, it says Africa still has great energy potential, both in fossil fuel and renewable energy resources. “The continent needs to optimise value from its fossil fuel endowments through a just transition to support the sustainable development of a green energy base. The potential for increased investment and foreign earnings from the export of fossil fuels, especially natural gas, is evident. “Africa also has high-quality renewable resources across solar, wind, geothermal and hydro. Despite the quality of renewable resources, Africa has less than 1% of global installed solar photovoltaic (PV) capacity as an example,” PwC points out. “Addressing energy poverty and transitioning to green energy will be unaffordable to Africa if it is left to self-fund and forced to forfeit its fossil fuel endowment — or to phase down its fossil fuel sectors under global policy and market pressure. “The developed world needs to support Africa’s energy growth as part of its just transition commitment. Although it has made significant commitments to climate reparations for Africa, the speed and scale of execution remains insufficient,” PwC Africa Energy, Utilities and Resources leader Andries Rossouw emphasises. He says that, to turn the tide on the continent’s energy poverty and achieve a sustainable energy transition, a significant increase in energy sector investment is required. More than 59 GW of installed capacity is present in Africa (based on the 2021 baseline). Hydropower and pumped storage, together, account for 63.8% of the continent’s installed capacity and provide most of the continent's renewable energy. Solar and wind installed capacity makes up 19.3% and 12.4%, respectively. The remaining 4.5% of the installed capacity is made up of various other renewable energy sources, including geothermal, biofuels and others. However, renewable energy growth in Africa has slowed over the past five years, with lower growth attributed to disruptions in construction owing to Covid-19 and delays to South Africa's large-scale Renewable Energy Independent Power Producer Procurement Programme. UNSERVED ENERGY COST Many African countries are grappling with power shortages despite having a wealth of energy generation resources. PwC’s ‘Africa Energy Review’ outlines the cost of unserved energy (CoUE). For example, in South Africa, the State-owned power utility shed 2 276 GWh of power in the first half of the year, to maintain a stable power grid. PwC estimates this CoUE at between $2.54/kWh and $2.88/kWh. When these values are applied to the actual load-shedding that was implemented during 2021, the loss of real gross domestic product growth was between 2.4 and 2.9 percentage points — which would have equated to an additional 290 000 to 350 000 potential jobs being created. This highlights that reliable and affordable access to electricity is the single biggest economic growth and job creation lever for Africa’s most industrialised economy, which is likely to hold true for other economies on the continent, PwC points out.
Leading South African mineral sands producer Richards Bay Minerals (RBM) has entered into a 20-year power purchase agreement (PPA) with independent power producer Voltalia for the supply of wheeled renewable energy from a 148 MW solar photovoltaic (PV) facility in Limpopo to its smelting and processing facilities in KwaZulu-Natal. Voltalia and its black economic empowerment partners, the identities of whom have not yet been disclosed, will begin construction of the Bolobedu solar project in 2023 at a site that is about 120 km east of Polokwane. The project value has also not yet been disclosed, but Voltalia CEO Sébastien Clerc reports that South African banks have shown a strong appetite for funding the project. “These banks of course will provide funding in South African rand, which is essential since the cash flows of the power plants are in the same currency with very long-term debt.” Once completed in 2024, the facility will be able to deliver 300 GWh yearly into the national grid and supply electricity to RBM through a 130 MW wheeling agreement in line with recent reforms to South Africa’s Electricity Regulation Act. MARKET REFORMS The reform allows embedded generation plants, including those wheeling electricity over Eskom and municipal networks, to proceed without a licence and to, instead, register such plants with the regulator. In 2021, the licence-exemption threshold was raised from 1 MW to 100 MW, but President Cyril Ramaphosa announced the full lifting of that limitation on July 25 when unveiling a range of interventions aimed at tackling intensifying load-shedding. Several mining companies have either announced or are pursuing similar opportunities, with the Minerals Council South Africa having reported that 29 of its members have 89 projects with a combined capacity of 6 500 MW and an investment value of more than R100-billion at various stages of development. Earlier this year, another mineral sands producer, Tronox, announced that it had entered into a PPA with the SOLA Group, which would build 200 MW of solar PV capacity in the North West for wheeling to its mines and smelters in South Africa. RBM, which is owned by Rio Tinto (74%) and a consortium of empowerment and community investors known as Blue Horizon (24%), reports that the solar electricity to be supplied will cut its yearly scope 1 and 2 greenhouse-gas emissions by at least 10%, or 237 000 t/y. “This agreement is a first step towards reducing RBM’s carbon emissions through the use of renewable solar power, so that we contribute to a net-zero future,” RBM MD Werner Duvenhage says. ELECTRICITY CURTAILMENT He reports that it will also improve security of supply in a context where Eskom, which has ramped up load-shedding this year on the back of major breakdowns across its coal fleet, was currently curtailing RBM’s consumption to 215 MW. At full capacity and when RBM runs all four of its furnaces, the company has an overall power demand equivalent to about 400 MW. It is currently operating only three furnaces, with the fourth closed during disruptions associated with the July riots in KwaZulu-Natal in 2021, and is managing within the 215-MW restrictions by operating these at a lower power rating. Rio Tinto also suspended the proposed $463-million Zulti South expansion at RBM, owing to security concerns including the murder of GM Nico Swart, who was shot on his way to work in 2021. Duvenhage reports that the tariffs secured from the Bolobedu plant will be lower than Eskom tariffs, even after Eskom’s wheeling costs are included. RBM is, thus, considering further renewables opportunities both to meet the decarbonisation commitments of its parent Rio Tinto, which aims to cut its emissions by 50% by 2030, as well as to lower the cost of its power bill. Voltalia’s Clerc said the company was pleased to support RBM in its decarbonisation journey and noted that the Bolobedu plant would be Voltalia’s biggest and its first in South Africa, where it has a signif...
Eskom data has confirmed that South Africans endured their worst-ever month of load-shedding in September 2022, with a total of 1 503 GWh estimated to have been shed and with 572 hours of the month’s 720 hours directly affected. Analysis by Eskom Research, Testing and Development’s Dr Ulrich Minnaar also shows that, besides 2021, there were more power cuts in September than had been experienced in any other entire year since load-shedding started in 2007. For the year to October 5, an estimated 4 115 GWh has been load-shed, which is materially worse than the 1 776 GWh shed in 2021, which previously held the unhappy distinction of being South Africa’s most intensive load-shedding year. The country’s next worst month was July 2022, when 397 hours were affected by rotational power cuts and 938 GWh was shed. “This period has been unique not only for the duration of load-shedding but also the intensity of load-shedding. “We have had load-shedding at higher levels (Stage 4 and up) for extended periods,” Minnaar explains. The period from September 6 to October 6 was also the first time that Eskom had implemented load-shedding continuously for 30 days, and with cuts having been confirmed until at least Saturday October 8, that unfortunate record will be broken too. Minnaar tells Engineering News that there were stretches during May and June/July this year of up to 20 consecutive days, but never for more than 30 consecutive days. Therefore, he anticipates that the economic data for the third quarter, covering July to September, will be significantly impacted by load-shedding when compared with the previous quarter, during which power cuts were less intensive. “The major lesson is that the performance of a significant portion of the coal fleet can be quite unpredictable [and] the addition of new generation is a critical component for eliminating load-shedding. “It is, however, not the only component: reliability maintenance and Eskom having access to the required funds to do it properly is a key element to the reliability of the grid going forward.” Government has announced several interventions to tackle the worsening load-shedding, but has warned that some of these will take time to have an impact. “With the President’s establishment of a National Energy Crisis Committee we are likely to see more changes and an even greater focus on addressing the load-shedding,” Minnaar says.
JSE-listed Aveng has entered into an agreement to sell Trident Steel as a going concern for R700-million, following what it acknowledges to have been a “protracted and difficult” disposal process that was first initiated in 2017. The buyer is Trident Steel Africa (TSA), a company specifically formed for the acquisition, and which is funded by a consortium of local and US private capital, including Ambassador Enterprises, of the US, Joseph Investments, Arbor Capital Investments and Trident Steel’s management. “The disposal of Trident Steel has been protracted and difficult, however the board and management are satisfied that this transaction represents the best value for Aveng and shareholders,” Aveng CEO Sean Flanagan said in a statement. The proceeds generated from the transaction will be used to settle Aveng’s remaining R406-million South African debt. The group had external debt of R3-billion when the turnaround strategy was first initiated in 2017; a strategy that involved noncore disposals with a combined value of R1.1-billion. Flanagan expressed confidence that the business, which supplied steel products primarily to the South African automotive, rail and mining industries, was being sold to a “credible consortium” that could continue Trident’s growth trajectory and secure the future of its employees. The purchase price of R700-million, plus an amount of R264-million which represented the cash portion from the business, as well as a monthly ‘ticking fee’ of R7.45-million, will be payable by TSA on or before the transaction’s closing date – the first day of the calendar month following the date on which the remaining conditions precedent, including competition authority approval, were fulfilled or waived. Aveng would provide R210-million of funding to a separate company in order to subscribe for 30% of TSA equity, which will be warehoused for the earlier of either a year from the closing date or the finalisation of an empowerment deal. Once the Trident disposal is concluded, Aveng will have two remaining core businesses: McConnell Dowell, which operates in Australasia and South East Asia, and Moolmans, which has contract mining activities in southern, central and west Africa. Aveng is also considering a foreign listing given that a significant portion of the combined revenue of McConnell Dowell and Moolmans is derived from outside of South Africa.
Global solar leasing platform, Sun Exchange, has announced that South African automotive platform Cars.co.za has bought into a project that provides off-grid solar power, plus battery storage, to the Karoo Fresh commercial farm. By using the Sun Exchange platform to buy more than 16 000 solar cells, valued at more than R2.5-million, Cars.co.za says it hopes to leverage its balance sheet to drive sustainable energy, while also creating an alternative income stream for its business over the 20-year lifespan of the solar project. The 332.1 kW solar project, plus 640 kWh storage, which is already generating electricity, is Sun Exchange’s first fully off-grid project. The project provides power to Karoo Fresh’s irrigation system, enabling the farm to expand its production of brassica and saffron, while reducing its reliance on diesel power. The project is expected to replace about 90 000 l of diesel a year, while also avoiding an estimated 240 t of carbon dioxide emissions a year. This is equivalent to about 960 000 km driven in an average passenger vehicle. Sun Exchange says it is in the planning stages of the next phase of the project, which will eliminate the farm’s reliance on diesel altogether. “Our belief that business can be a powerful force for good is one of Cars.co.za’s core values and essential to our culture,” says Cars.co.za cofounder Alastair MacMurray. “We are proud to be associated with Sun Exchange and the Karoo Fresh solar project as part of our vision to protect our environment and be a carbon negative business.” “The Sun Exchange platform is all about enabling access to the benefits of the clean energy economy for all,” adds Sun Exchange CEO Abe Cambridge. “Having Cars.co.za buy solar cells to power Karoo Fresh through the Sun Exchange platform, demonstrates the vital role the private sector can play in addressing some of today’s most pressing sustainability challenges.” Sun Exchange has, since 2015, enabled solar power for more than 65 businesses, farms, schools and other organisations in Southern Africa. Individuals and businesses from 180 countries across the world use the Sun Exchange platform to buy and own solar cells, produce clean electricity and “earn with purpose”.
Digital automotive marketplace AutoTrader and Smarter Mobility Africa have produced their third study that focuses on South African consumers’ perceptions of electric vehicles (EVs), as well as their preferences in considering EVs as a mode of transport. Unpacking the 2022 AutoTrader Electric Vehicle Buyers Survey reveals that the initial cost of purchase remains one of the vehicle type’s biggest drawbacks. “EVs in South Africa have the added disadvantage of incurring substantial taxes,” notes AutoTrader CEO George Mienie. “Internal combustion engine (ICE) imports incur an 18% duty, versus 25% on EV imports, which pushes the cost of an EV to twice that of the average price of a new ICE vehicle (of a similar make/model),” he explains. “It is interesting in the survey to note that the initial cost of purchase has become an even bigger disadvantage to consumers,” says Mienie. The survey also highlights that the early adoption of EVs is decreasing in South Africa as consumers are becoming more educated about what the future holds for EVs as a mode of transport. As battery technology continues to develop, it will not only reduce the initial cost of EVs, but also increase the range of these vehicles. “The data shows that consumers are pushing out their purchase intent and almost taking a wait-and-see approach,” says Mienie. According to the report, the number of people willing to pay more for an EV upfront, even given its lower running costs, fell from 68.2% in 2021, to 64.6% in 2022. According to the report, an EV costs about 75% less to ‘refuel’, on average, compared with an ICE car. Battery efficiency, safety and price have emerged as the most important considerations when purchasing an EV. Reduced carbon emissions and air pollution, followed by cheaper running costs, were cited as big advantages of owning an EV. EVs are still out of reach for more than two-thirds of consumers in South Africa, notes the report. However, 64% of respondents indicate a willingness to spend up to R500 000 on an EV. Range Anxiety Vehicle manufacturers are currently producing EVs that travel further than 700 km on a single charge. In South Africa, EVs like the Jaguar I-Pace can travel up to 470 km on a single charge. Range anxiety declined in 2022, according to the AutoTrader survey, and respondents appear to be more realistic about range (300 km to 500 km) than they have been in the past. Still, insofar as purchasing intent is concerned, range expectations remain higher, with the majority of respondents (37%) stating they would consider buying an EV if it had a range of between 500 km and 700 km. On a more positive note, charging infrastructure worries, cited as the main disadvantage in the previous AutoTrader report, have declined. The number of people who have driven an EV locally has also increased, up from 12% in 2021, to 15% in 2022. Disadvantages Given South Africans’ love of driving, self-driving technology came in as the least influential factor in the purchase of an EV, states the AutoTrader report. Charging time emerged as the second most noted disadvantage, increasing from 58% in 2021 to 59%. However, 81% of respondents stated that they would consider purchasing an EV if it could be fully charged in under an hour at a fast charging station, while more than 70% of respondents with a higher disposable income want home charging of four hours or less. Respondents cited the three most trusted EV brands as BMW, Tesla and Toyota. (Tesla does not have a presence or offering in South Africa.) Supply & Demand EV searches continue to surge, says the AutoTrader report. In the first half of 2022, EV searches on AutoTrader using the fuel-type filter increased by 99.95% year-on-year, while hybrid searches soared by 129%. EV views rose by 133%, with the Audi RS e-tron, Audi e-tron and Porsche Taycan the three most viewed EVs. Views for hybrids, with their combination of combustion engine and electric motor, increased by 61.28%, with the BMW i8, locally ...
A total of 56 wind and solar projects have been submitted by prospective bidders under the sixth bid window (BW6) of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which has been expanded to 4 200 MW from an initial allocation of 2 600 MW. The bids, which are split across five provinces, including 24 in the Western Cape province alone, have a combined capacity of more than 9 600 MW across 23 wind and 33 solar photovoltaic (PV) bids. The wind projects have a combined capacity of more than 4 100 MW, with several projects bidding to supply 240 MW. The solar PV projects have combined capacity of 5 550 MW, with a number of individual projects also bidding to supply 240 MW. Besides the Western Cape, the other provinces represented include the Free State with 11 bids, the North West with eight and the Northern and Eastern Cape with six apiece and Limpopo with one. The IPP Office tells Engineering News that the bid evaluation, which will be conducted by an independent evaluation committee, will formally begin assessing the bids on October 5. “At this time, we expect the evaluation process to take about six to eight weeks, whereafter the bid announcements will follow once all governance approvals have been secured,” the IPP Office said in response to an enquiry. No price information was provided and it was, thus, unclear how current inflationary pressures were reflected and how the bids compared with those received during the troubled BW5, when the average tariff bid was 47.3c/kWh. Anton Eberhard, who is Emeritus Professor and Senior Scholar at the Power Futures Lab at the University of Cape Town’s Graduate School of Business, noted that bids for the 1 000-MW solar PV allocation were more than five times oversubscribed, which should result in some competitive prices. However, the doubling of the wind energy capacity on offer, from 1 600 MW to 3 200 MW, coupled with grid constraints, had resulted in a bid oversubscription of only 30%. "Less competition will likely see price increases compared to BW5," Eberhard warned. BW5 was the first initiated under the current Integrated Resource Plan and followed a seven-year disruption, precipitated by a refusal by the previous leadership at Eskom to enter into new power purchase agreements on the basis that the utility had surplus capacity. South Africa has subsequently descended into its worst-ever period of load-shedding, power cuts having been implemented at up to 6 000 MW, or Stage 6, during several days during 2022. To date, only three wind projects out of the 25 wind and solar PV projects named as preferred bids in October last year have signed project agreements and none have reached financial close. The IPP Office has set a deadline for the end of October for the remaining 22 bidder to sign their project agreements, but commentators have warned that some casualties should be expected. The BW6 bids were submitted by the October 3 closing date, which was delayed from an initial deadline of August 11 after President Cyril Ramaphosa announced that the round would be expanded as part of several interventions unveiled on July 25 to tackle worsening load-shedding. Ramaphosa announced that BW6 would be doubled to 5 200 MW, involving 3 200 MW of wind and 2 000 MW of PV. However, the National Energy Crisis Committee, which was also established in July, later reduced the allocation to 4 200 MW, owing to the fact that the National Energy Regulator of South Africa had not yet provided concurrence with a Ministerial determination allowing for the doubling of the solar PV allocation, which was limited to the 1 000 MW catered for under a previous determination. Meanwhile, the IPP Office confirmed a delay to the release of a request for proposals (RFP) for energy storage projects, which was expected to be published at the end of September. It reported that the RFP was in the final stages and would be released to the market as soon as governance processes had ...
Total domestic new-vehicle sales in September, at 47 786 units, were 10.8% higher than in the same month last year, while year-to-date sales, at 391 396 units, were 13.4% up on the figure for the first nine months of 2021. Passenger car sales showed an improvement of 9.7% in September, while light commercial vehicles were up 14.9%. Medium and heavy-truck sales increased by 15.3% and 1.8%, respectively. Total new-vehicle sales for September continued to run ahead of the corresponding month last year, says National Automobile Dealers’ Association (NADA) vice chairperson Alex Boavida. “The numbers were aided by a strong showing from Toyota, which is making immense strides in recovering from flood damages that knocked out its plant in April.” Boavida regards September’s numbers as encouraging, considering they were achieved in tough trading conditions, and on top of a fresh round of load-shedding and yet another interest rate hike. “These [trading conditions] included an ongoing stock supply shortage and a stock mix that is not ideal. “With factories struggling to keep new-vehicle production on schedule, delivery times are becoming increasingly difficult to predict, and in turn, dealers are finding it difficult to keep clients interested in specific models.” Boavida adds that household costs continue to increase owing to the current extensive load-shedding experienced throughout the country. Energy bills now include fuel for generators, with electricity costs set to rise significantly soon. Boavida believes that some clients are putting off new-vehicle purchases to buy solar-panel and battery backup systems for their homes and businesses. “Shipping and logistics remain problematic too, although they are improving monthly,” she notes. “However, as cargo trade normalises, we are faced with shrinking markets and fears of a potential world recession. “There are also some limitations on local vehicle transport with a shortage of carriers as exports ramp up.” Boavida says that there is increased local interest in new-energy vehicles (NEVs) in South Africa – including the growing number of fully electric models that are coming to market. “Clients are eager to learn more about these vehicles before making purchasing decisions, and while we anticipate a relatively slow transition from internal combustion engines, more and more electric offerings from a variety of brands are entering the market. “The demand for used vehicles remains strong, and the availability of good used vehicle stock is improving,” adds Boavida. More good news is a 104.6% improvement in the export of built-up vehicles in September, and a substantial increase (18.9% of new passenger-car sales) in the acquisition of rental and fleet units as the industry gears up for the holiday season.
The South African government is “moving painfully slowly” in finalising its policy on new-energy vehicles (NEVs), says Naamsa | The Automotive Business Council CEO Mikel Mabasa. Since the unveiling of the green paper on NEVs in May last year, “we have not seen meaningful progress” in the finalisation of the next step, which is the drafting of a White Paper, he notes. Mabasa says the deadlines determined by Europe and the UK to no longer allow the sale of new, traditional internal combustion engine vehicles are set for 2035 and 2030, respectively, which “is a real challenge” for South Africa. “We are nervous about 2030 – Europe is our biggest customer.” Exports account for 64% of vehicle production in South Africa, with 77% of this number going to Europe and the UK. “We are becoming irritators of those moving slow,” declares Mabasa. In contrast to South Africa, other countries such as China and India, and even countries within Africa, such as Morocco, are moving “at aircraft speed” to develop NEV policies, he adds. “The world is not waiting for South Africa to wake up.” Mabasa says the South African automotive industry is also in danger of losing significant ground to other African countries in terms of vehicle production. South Africa was responsible for 62.3% of vehicle assembly in Africa in 2020, but that number has slipped to 53%. “This will soon dip to below 50%,” says Mabasa. “Egypt and Morocco want to eat our lunch.” He warns that South Africa is also bleeding engineering skills to assembly operations in Africa and the rest of the world. Demand vs Supply Mabasa notes that the Department of Trade, Industry and Competition has signalled its intent to offer a production-based incentive as a first phase of its NEV support programme. However, while Naamsa welcomes that initiative, “we also want to make sure that demand is stimulated”, he says. Mabasa says it is important for the local industry to “socialise” NEV technology, “to get as many people as possible to adopt it”, which is only possible if demand is stimulated in a “firm and compelling” manner. “[The South African auto industry] can produce NEVs on one hand, but what if no one buys what we are producing? “We cannot only rely on export-led business.” NEVs made up 0.19% of the total new-vehicle market in South Africa in 2021, says Mabasa.
Economic and energy advisory company Meridian Economics is warning that the immediate implementation of Eskom’s proposed retail tariff plan could severely disincentivise investment into the large distributed generation plants required to reduce or end load-shedding. The plan, which the utility says is necessary to rebalance variable and fixed charges in light of technology changes under way in the sector, has already met with stiff opposition from some residential customers and opposition political parties after the plan was submitted to the National Energy Regulator of South Africa for approval. There has been particular anxiety over reports that Eskom customers with solar systems will be charged a ‘levy’ of more than R930 a month to remain grid connected; reports that Eskom has refuted, stating the restructuring will apply to all customers and forms part of a ‘revenue neutral’ effort to modernise the tariff structure to be more cost reflective. The utility has acknowledged, however, that individual customers may pay more or less, depending on the changes approved and their consumption profiles. In a new briefing paper, Meridian Economics says it supports the restructuring of Eskom's tariffs to become more cost-reflective. However, it raises concerns about what impact the proposed changes will have on the nascent distributed generation market, and in particular on those large independent power producer (IPP) facilities that intend wheeling electricity to multiple smaller customers. This market has been stimulated only recently by a reform that initially raised the licence-exemption threshold from 1 MW to 100 MW – a cap that is in the process of being eliminated entirely in line with interventions announced by President Cyril Ramaphosa on July 25 to tackle the worsening load-shedding crisis. However, Meridian warns that a large portion of the wheeling market for IPP power could “grind to a halt for several years” if the tariff restructuring being sought by Eskom were to be implemented from April 1, 2023, as proposed. The paper asserts that, while the rebalancing might be appropriate in a market that has sufficient supply, it is “fundamentally counterproductive” in a market that is short of energy, as it sends the incorrect pricing signals to generation investors and purchasers of power. It also presupposes that Eskom is indeed able to provide generation “backup” to customers when it patently is not able to do so, Meridian adds. The analysis shows that under the prevailing tariff structure, there is sufficient margin for a customer entering into a power purchase agreement (PPA) with a wheeling solar photovoltaic (PV) or wind IPP to achieve a meaningful saving of at least 10% on their electricity bill for both PV and wind wheeling projects. Should the new tariff structure be implemented next year, however, there will be a 25% decrease in the value of PV energy that is wheeled, and a 15% decrease in the value of wheeled wind energy. The calculations emerged from an analysis of how changes to time-of-use periods and the introduction of fixed standby or generation capacity charges, together with commensurate reductions to the energy charges, will affect 100 MW wheeling wind and PV IPPs. “This reduced value proposition has the potential to delay investments towards the end of the decade, once the overall Eskom tariff has increased and the market PPA range has decreased sufficiently to offer a meaningful saving to the customer.” To address this unintended consequence at a time when the country is seeking to accelerate rather than retard investment in distributed generation, Meridian says Eskom should commit not to implement the restructuring “overnight in 2023”. To further reduce the regulatory uncertainty for investors created by these proposals, clarity should be provided on how and when these reforms will be implemented in a way that does not undermine the required market expansion. “While further detailed work will be required...
Naamsa | The Automotive Business Council has received nine bids from companies interested in rolling out public charging infrastructure for electric vehicles (EVs) in South Africa. The council issued the request for bids in June. According to the document, the successful candidate will provide direct charging (DC) infrastructure along the N1, N2 and N3 highways. This candidate will be supported financially by the Automotive Industry Transformation Fund (AITF), “ensuring a positive business case in response to the growth of EVs within the South African market”. To align to the AITF’s requirements, the winning bidder must be at least 51% black-owned, with its primary business operations to be within the South African automotive value chain. The tender includes the possibility of establishing microgrids at the charging sites, which will feed the charging points with green energy, thereby negating the use of Eskom’s coal-generated electricity and the energy supplier’s propensity for load-shedding. Payment should allow for credit cards, with the planned 20 to 30 sites to be at 100 km to 300 km intervals. EV vehicle manufacturers and charging service providers previously each rolled out their own network of charging stations, often built to varying specifications, while also employing different payment systems. “We are now going to provide charging infrastructure together as an industry,” says Naamsa | The Automotive Business Council CEO Mikel Mabasa. “We have put all our money into one basket, to make sure we increase the scale and impact of the infrastructure we roll out.” Mabasa notes that the nine parties who responded to the tender are a mix a local and international companies. He adds that Naamsa is also engaged with the National Regulator for Compulsory Specifications to approve specifications for charging infrastructure, to ensure that all charging stations in South Africa function to a similar level. Mabasa emphasises that more than 70% of EV owners charge their vehicles at home, but that a countrywide charging grid is needed for when this is not possible, such as during long-distance travel.
The BMW Group plans to launch its first vehicles featuring completely vegan interiors next year. It will be available in both BMW and Mini models. The German manufacturer says this advance is made possible primarily through the development of materials with leather-like properties. “It will be possible to also use these materials for steering wheel surfaces, which must fulfil demanding criteria when it comes to feel, premium appearance and wear resistance,” notes the group. BMW believes the demand for vegan and leather-free interiors is set to increase further in the near future, especially in the US, China and Europe. The launch of such interiors will also aid the manufacturer in its ambition to reduce carbon dioxide (CO2) emissions over the lifecycle of a vehicle as it move towards climate neutrality, which is to be achieved by 2050 at the latest. “Replacing raw materials of animal origin makes a significant contribution to increasing sustainability in vehicle production,” notes BMW. “The introduction of a new surface material for steering wheels will see the proportion of vehicle components that contain traces of raw materials of animal origin fall to less than 1% in the respective BMW and Mini vehicles. “As a result, these materials will now only be found in areas that are not visible to the customer, for example in various waxy substances such as gelatine used in protective coatings, lanolin in paints, tallow as an additive in elastomers and beeswax as a flux for paints.” The new steering wheel surface material reduces carbon dioxide equivalent emissions along the value chain by about 85% compared with leather, says the company. Up to now, most of the emissions linked to leather – about 80% – were in the form of methane gas from cattle rearing. The remaining 20% was accounted for by processing of the cowhide, which is highly energy- and water-intensive. Climate Neutrality To achieve the group’s goal of climate neutrality, BMW says it is relying on the use of green electricity in production and in the supply chain, a consistently increased proportion of secondary materials and natural raw materials, efficient electric motors and combustion engines and a high recycling rate. For example, the floor mats for various models are made from mono-material, thus avoiding material mixes that are difficult to recycle. As a result, BMW saves around 23 000 t of CO2 and an additional 1 600 t of waste a year, since the recycled floor mats and waste material are also reused within the production process. Research and development in the field of secondary raw materials and sustainable materials are also a priority. BMW says it is working with start-up companies to develop bio-based materials. Compared with the synthetic leathers previously used, these result in about 45% lower CO2 emissions. Mirum, which is 100% bio-based and petroleum-free, has the potential to mimic all the properties of traditional leather. Another new material, Deserttex, is made from pulverised cactus fibres with a bio-based polyurethane matrix. “With these materials, replacing raw materials of animal origin can be combined with a significant reduction in CO2,” says BMW.
Public Enterprises Minister Pravin Gordhan has unveiled the names of the much-anticipated new Eskom board, which includes five engineers and a trade unionist, and which will to be led by Mpho Makwana, who was appointed executive chairperson at the utility in late 2009 following a previous leadership crisis. The board, whose three-year appointment begins on October 1, comprises 13 nonexecutive directors, including Dr Rod Crompton who has been retained from the previous board, and two executive directors, CEO André de Ruyter and CFO Calib Cassim. The five engineers included on the board are: Dr Busisiwe Vilakazi, who holds a DPhil in Engineering Science from the University of Oxford and who is also head of research and innovation at government information technology agency SITA; Lwazi Goqwana, who has 25 years of working experience in manufacturing, construction, financial services, logistics, energy and government, and who has worked at Unilever, Tiger Brands, Barclays Africa, Transnet, and the Department of Public Enterprises; Clive Le Roux, who is an former Eskom chief nuclear officer and who also previously served as a power station manager at Matimba and Koeberg; Mteto Nyati, who holds a BSc in Mechanical Engineering from the University of KwaZulu-Natal, and who is the former CEO of JSE-listed Altron; and Dr Tsakani Mthombeni, who has a PhD in electrical engineering, is a past chairperson of the Energy Intensive Users Group and who is currently the sustainable development executive at Implats. Former Congress of South African Trade Unions general-secretary Bheki Ntshalintshali is an interesting new inclusion. His appointment coincides with recent industrial relations difficulties at the utility, which contributed to the implementation of Stage 6 load-shedding in June and July when some workers at the coal stations embarked on an illegal strike for higher wages. The other members of the board are accountants Fathima Gany, Ayanda Mafuleka and Tryphosa Ramano, as well as lawyer Leslie Mkhabela and former Institute of Internal Auditors of South Africa CEO Dr Claudelle von Eck. Makwana succeeds Professor Malegapuru Makgoba and takes up a role that he occupied previously as an executive chairperson; an appointment made after then CEO Jacob Maroga and then chairperson Bobby Godsell both stepped down following a public dispute over Maroga's proposed future strategy for the utility, which was rejected. Gordhan said that the board had been appointed following a Cabinet meeting and a vetting process that had not involved any other structur, including the African National Congress deployment committee. "I appeared before the Cabinet, we compile these names from various sources and professional bodies and what I'm announcing today is the result of carefully checking out all the candidates that we thought are able to make a contribution and that's what we have in front of us."
Engineering News Editor Terence Creamer talks about the South African government expressing its support for the shift from internal combustion engine vehicles to new energy vehicles; the approach the South African government is planning to take in this regard; the industry's response to this approach; the impact of load-shedding on the shift to electric vehicles; and when and where things are likely to settle.
The business community in the Steve Tshwete local municipality of Mpumalanga, which encompasses Middelburg, have been urged to align their product and service offerings to the opportunities being created by the energy transition and the associated socioeconomic initiatives aimed at cushioning vulnerable coal communities and workers. The Middelburg Chamber of Commerce and Industry convened a conference this week under the theme ‘Just Energy Transition – Just for Business’ with a focus on the potential spinoffs for Mpumalanga firms from Eskom’s repowering and repurposing of those coal stations that are scheduled to close in the coming few years. Besides Komati, which will shut entirely later this year and which has been designated as the flagship site for Eskom’s so-called Just Energy Transition (JET) strategy, the utility is also preparing to close Hendrina, Camden and Grootvlei before the end of 2027. Middelburg Chamber of Commerce and Industry CEO Anna-Marth Ott tells Engineering News that business remains anxious about the implications of the closure of coal mines and power stations, but that there is also a growing appreciation of some of the possible business opportunities. She is concerned, however, that most of the JET debates continue to take place outside of areas such as the Steve Tshwete municipality, which is “surrounded by the coal mining industry and Eskom power stations”. “We believe many of the conversations are being held with the wrong people and that there are existing businesses and individuals with skills in this area that don’t only have ‘skin in the game’ for the long term, but the skills needed to translate the opportunities into real enterprises and jobs.” Eskom senior manager Sumaya Nassiep, who addressed the conference, argued that there was potential to use the JET strategy to reignite local manufacturing and stimulate enterprise development in the province. Opportunities could arise directly from the repowering initiatives by, for instance, creating factories to produce components for new wind and solar facilities, as well as through the provision of services to these power plants. Nassiep said there was specific potential in the manufacture and assembly of photovoltaic (PV) modules, inverters, transformers, battery energy storage system components, steel PV mounting structures, transmission and distribution poles and towers and, in the medium term, in battery recycling. Maintenance services would also be required at the new renewable-energy plants, such as non-destructive testing of components or the cleaning of PV panels. Certain existing supply-chain products and services would also remain relevant, such as the provision of high-voltage yard components and maintenance, as well as services such as general cleaning, catering, hospitality, the provision of personal protective equipment and security. Eskom also saw a role for local business in supporting the socioeconomic interventions that would be pursued under the JET to support vulnerable communities, including skills upliftment programmes and the incubation of small firms linked either directly to repowering initiatives, or to repurposing projects in other sectors, such as agriculture. At Komati, for instance, the repurposing embraced technical training for the renewable industry, agrivoltaics and aquaponics projects and the assembly of microgrids for sale and deployment in areas where it was too expensive to extend the national grid. The repowering initiatives, meanwhile, include solar, battery and wind projects and possibly a gas-to-power facility. In Mpumalanga more broadly, Eskom was releasing useable land parcels around its power stations for renewables projects and was in negotiation with an initial 18 successful bidders that responded to its first request for proposals issued in April. However, Nassiep also said there was a risk that existing businesses in the area failed to diversify timeously and align their product and/or service of...
President Cyril Ramaphosa has acknowledged that the current load-shedding crisis is a “calamity of enormous proportions” but has backed Ministers Gwede Mantashe and Pravin Gordhan after the leader of the opposition asked why the two Ministers had not been dismissed in light of their role in the “most costly failure in our country's history”. Highlighting that the country was in the midst of its worst-ever year for load-shedding, despite an assurance given by Ramaphosa in 2015 that the problem would be all but “forgotten” within 18 to 24 months, Democratic Alliance leader John Steenhuisen asked at “what level of sustained load-shedding” would the President consider firing the Mineral Resources and Energy and Public Enterprises Ministers respectively. In response, Ramaphosa insisted that the rotational power cuts were “not the wilful or planned intention of anyone who works in the State system” including the two Ministers. “This has been a calamity of enormous proportions, which we all admit. “I mean just two weeks ago to have almost 50% of our electricity generation capacity just collapsing, one after the other and the next and the next, it's not something that was planned by the Ministers or the CEO,” the President said, while also acknowledging that mistakes had been made. “Everybody is focused [on solving the crisis], from the two Ministers . and including all the executives that have been put under tremendous pressure to address this. “We are going to be making some announcements, and we hope and trust and believe that will then take us forward,” he said, without giving details but most likely in reference to the upcoming reconstitution of the Eskom board. He stressed that he had genuinely believed in 2015 that load-shedding would be brought under control in the period outlined and that his confidence had been based on information at the time which suggested that Medupi and Kusile would bring relief to the strained system. “Lo and behold where we are today. “But it has not been the wilful and clearly planned intention of anyone that I work with,” he stressed, adding that the crisis had been exacerbated by corruption and criminality, including the theft of cables. “Nobody in the country is happy with load-shedding, including myself, and we are working on it.” PUBLIC GOOD Ramaphosa also asserted that electricity would remain a “public good” regardless of the restructuring under way at Eskom and the fact that more electricity was being produced by private companies and independent power producers (IPPs). The restructuring of Eskom, he outlined, would ensure that the transmission grid and the system operator, which he described as the backbone of the electricity industry, remained under full State ownership and control, while additional private and public generators and distributors were introduced. Plans were also under development to ensure that Eskom grew its own renewables footprint, but that the utility’s debt burden was constraining it from immediately building such capacity. “In order for Eskom to do that, it needs the financial resources. “And right now, the financial resources are with the private sector,” he said. However, the policy space had also been opened for municipalities to either generate electricity directly or to procure electricity from IPPs. Ramaphosa described the restructuring and unbundling of Eskom as a way of de-risking the electricity supply industry from its current reliance on the performance of a monopoly business. “We are living through that risk right now, because we've got only one company that generates for the whole nation. “As I fly at night from Cape Town to Pretoria, or from Pretoria to Cape Town, I just see the lights on in the many towns in our country and the fear I continue to have is that it's only one company that is generating that. “I say this is very risky, extremely risky, whichever way you look at it; even if you look at it ideologically, it is a real dangerous risk. “And th...
The Smart Energy Solutions for Africa (SESA) consortium has launched its first ‘SESA Call for Entrepreneurs’ funding round. Small and medium-sized enterprises, particularly women-led, with a focus on sustainable energy solutions in Ghana, Malawi, Morocco and South Africa, are encouraged to apply. As a consortium partner, Siemens Stiftung will provide the selected entrepreneurs with funding ranging from €50 000 (R850 000), up to €70 000 (R1.2-million) per business over an 18-month period, and an opportunity to join the SESA Incubator Programme. “The call leverages social entrepreneurs’ talents, skills, and innovations to not only address climate change, but to also pave the way for social and economic development in rural areas,” says Siemens Stiftung MD Dr Nina Smidt. “Women are at the heart of this transformation. Supporting female-led enterprises enables the inclusion of vulnerable groups more at climate risk, and in the process accelerates the realisation of the United Nations’ Sustainable Development Goals.” Reliable, affordable, and sustainable energy access has been a challenge for rural communities in Africa. SESA, a European Commission-funded project, aims to test, validate and later replicate innovative solutions, as well as business models, to accelerate the green transition across Africa. The SESA project was launched in October, 2021, with a duration of 48 months and is operational in nine African countries, namely Ghana, Kenya, Malawi, Morocco, Namibia, Rwanda, South Africa and Tanzania. “The uYilo e-Mobility Programme is a SESA partner and the lead for the South African validation project,” says uYilo director Hiten Parmar. “South African entrepreneurs successful in securing their place in this project will benefit from access to funding for scaling technology solutions, but also development through the incubator programme and technical and business mentorship." "[It] is an opportunity for entrepreneurs to provide sustainable solutions that improve access to energy in remote areas,” adds uYilo programme manager Edem Foli. “This funding is available in a focused, goal-oriented environment which can propel a small business much faster than it could possibly achieve working alone. We encourage all entrepreneurs to make application for this project.” The ‘Call for Entrepreneurs’ programme closes on November 20.
Zero Carbon Charge (ZeroCC) is unashamedly pro-electric vehicle (EV), but believes that driving an EV only makes a difference when charged by renewable energy. ZeroCC director Andries Malherbe says that charging an EV through the conventional energy on tap in South Africa – in other words, Eskom power, generated from its fleet of coal-fired plants – will do very little to alleviate the poor air quality in the country. “Currently in South Africa, a diesel car emits 8.6 t carbon dioxide equivalent (CO2e) a year and a petrol car 4.4 t, based on an average driving distance of 25 000 km a year,” he explains. “As it stands, an electric car powered by the current South African grid would emit more CO2e (5.8 t) than a petrol engine car (4.4 t), driven over the same distance of 25 000 km a year.” By contrast, an EV charged with green power would emit zero CO2e, says Malherbe. “This means every EV recharged with green chargers will save 5.8 t of CO2e a year on average.” In ZeroCC’s case, green chargers refer largely to chargers powered by solar energy. Generating and using solar energy will also circumvent the highly unreliable Eskom grid, prone to frequent load-shedding – one of the reasons cited most by consumers for their unwillingness to shift to EVs. The team of Malherbe and ZeroCC co-founder and director Joubert Roux aims to roll out 120 solar-powered charging stations across the country’s highways and regional routes, at about 150 km apart, all with ultra-fast EV chargers. While EV sales are currently rather dismal in South Africa, at 218 battery electric units last year, the world is rapidly moving to electric mobility, and South Africa is set to follow suit, says Roux. ZeroCC believes there could be as many as 1.3-million to 1.5-million passenger and light commercial EVs on South Africa’s roads by 2032, should visible, extensive and tangible fast-charging infrastructure be put in place. “This volume will represent 15% of all registered vehicles and will save more than 2.7-million tons of CO2e a year," says Roux. To date, ZeroCC has visited more than 200 possible charging sites. Most of them are located at established small businesses like farm stalls, hotels and restaurants, situated along several routes criss-crossing South Africa. The aim, explains Malherbe, is for EV users to have access to fast charging across the country, and not just the main metropoles or national highways. “Should this be the case, EV use will remain restricted to cities.” Roux says ZeroCC has already engaged the relevant landowners on a number of sites, and that various environmental assessments and applications are in process in all nine provinces. “We plan to start with construction of the first four charge stops in the first quarter of next year.” The first two will be in Klipheuwel and Dassiesfontein, in the Western Cape. Some of the sites will be greenfield projects, while others will make use of existing infrastructure, such as farm stalls/rest stops. Any surplus power generated at the sites can be used by the land owner. The general aim is for an EV to charge from 20% to 80% in 25 minutes, and for the car user to pay cash, or per credit or debit card, with no special card or payment method as is currently the case at EV chargers, notes Roux. ZeroCC, founded in 2021, is funding the project internally, and is seeking the aid of development finance institutions and new partners as they roll out their network. It is estimated that every charge station will cost around R10-million. Each site will have bathrooms, a food and retail offering, four vehicle chargers and around 1 500 m2 in solar panels. Site security will be paramount, notes Malherbe, as is job creation within local communities. Roux estimates that it may take between four to six years before ZeroCC shows any profit. The partnership of Roux and Malherbe has its roots in the development of a solar farm in the Northern Cape, as well as two proposed wind farms in Round 6 of the Renewable...
Mercedes-Benz South Africa co-CEO Mark Raine has urged South Africa to move with greater speed in finalising its electric vehicle (EV) support framework, which he argues should be “holistic” and include measures that both sustain local production and stimulate domestic demand. The South African government has already indicated that it plans to support a manufacturing transition from internal combustion engine (ICE) vehicles to so-called new energy vehicles, including EVs, and is currently consulting on a roadmap for the sector. It has also indicated that its approach is likely to be production- rather than consumption-led and that it will seek to build on the Automotive Production and Development Programme rather than replace it. The immediate focus under the proposed roadmap will be on safeguarding the country’s export markets, which are aggressively transitioning away from the ICE vehicles that the South African industry currently assembles. The UK and the European Union currently absorb some 45% of South Africa’s yearly passenger vehicle production and both markets have announced that they will bar the sale of ICE vehicles and soft hybrids from 2030 and 2035 respectively. In an interview with Engineering News, Raine said that ongoing domestic production did definitely require attention. “[But] we need to look at it holistically. We need to look at production, but we also strongly need to look at the consumer market and everything that comes on the back of that.” He added that, given the high proportion of exports from the industry of about 95%, a greater balance was required by growing domestic consumption. PRICE PARITY Raine is particularly keen for South Africa to embrace “price parity”, by reducing the prevailing import duties on EVs from 25% to the 18% currently in place on ICE imports. “What we need to have in the South African context is not to put an EV at a disadvantage, and if we rule that out, I think we as manufacturers and sellers of these vehicles can convince any consumer of the benefits of electric vehicle besides the obvious environmental aspects.” The key argument in favour of EVs, once there was parity, would relate to the cost of ownership, which would “more than offset” the initial higher capital cost, or the higher monthly instalments. “Therefore, for me the main request is do not disadvantage electric vehicles.” Raine said the other element required for stimulating domestic demand related to infrastructure, especially charging infrastructure. Given South Africa’s current load-shedding crisis, he said the expansion of the EV market should be closely aligned with a domestic energy transition in which solar plays a far more prominent role in providing the energy required for charging. “South Africa has all the necessary prerequisites for the EV revolution, but it has to go hand in hand with solar energy. “We cannot rely on traditional electricity sources, there needs to be transformation in both areas and its vitally important to have solar energy, including solar charging stations,” he argued, reporting that about half of Mercedes-Benz EV customers were already self-sufficient with regards their electricity, while the other 50% were considering their solar options. Raine expressed enthusiasm for a speedy resolution to the policy debate, saying that while South Africa was in a good position to learn from markets that had already moved assertively to finalise their EV strategies, policy certainty was required to facilitate implementation and investment. He also argued in favour of government adopting a “holistic ecosystem” approach, whereby the value of automotive manufacturing was assessed not only by the economic value and jobs created in production, but also took account of the associated spinoffs in finance, sales, information technology, servicing and the aftermarket. Speaking ahead of the interview at an event hosted at the Gordon Institute of Business Science, in Johannesburg, acting director-gen...
Eskom has confirmed that the change to the schedule for replacing the six steam generators at the Koeberg nuclear power station, will have an impact on the cost of the life-extension project, which was originally estimated at R20-billion. This confirmation was provided during a joint meeting of the portfolio committees on mineral resources and energy and on public enterprises, convened to deliberate on a complaint made by the National Union of Mineworkers (NUM) regarding what the union claims to have been the unfair suspension of three senior Koeberg employees. Acting chief nuclear officer Keith Featherstone told lawmakers that the delays had not altered the scope of the overall life extension plan, of which the replacement of the steam generators is a “critical enabler”. Eskom is aiming to extend the life of the Koeberg power station for an additional 20 years beyond its current licence period, which expires on July 31, 2024. Featherstone reported that unexpected “compensation events”, including a R650-million payment ordered by the Constitutional Court, and contract price adjustment increases would have an impact on the cost of the specific steam-generator replacement allocation, which was still in the process of being finalised. The original cost estimate of R20-billion, he added, was done under 2010 parameters. “If reassessed in today’s values, it would be significantly different,” he reported, without providing a revised cost estimate. “Eskom takes foreign exchange (forex) annually, and forex is rolled over every year. “This has cost Eskom over R1.5 billion, [while] interest during construction charges are significant because of the extended project duration, influencing the overall cost,” Featherstone added. Koeberg Unit 2’s three steam generators were meant to have been replaced as part of an extended maintenance programme initiated in January, but the project was deferred to October 2023 after it emerged that Eskom had failed to finalise the construction of the facilities required to house the old steam generators once removed. Eskom attributed the delay to poor project management, inadequate contract management and a lack of financial discipline and placed three senior managers on precautionary suspension with full pay while an independent investigation was concluded. NUM represents one of those managers and disputes Eskom’s claims, alleging that the delays were largely the fault of the main contractor, Framatome of France. Eskom expects the investigation to be completed by the end of September, but lawmakers have convened meetings on the issue after NUM made a direct complaint of unfair and discriminatory actions against the suspended individuals. Featherstone said that both Eskom and the contractor had contributed to the project-execution deficiencies that had already trigger “compensation events” and several disputes, which were still being adjudicated. “The main arguments against Eskom by the contractor are associated with the facilities that were not ready. “This project has been on the go for a long time and there was actually no excuse from an Eskom point of view for these facilities not to be ready. “So, Eskom is finding itself in a very difficult position to actually defend some of these compensation events,” Featherstone admitted. However, NUM described the Koeberg life-extension project as one fo the few Eskom projects to have been “properly managed” and alleges that the fault lies with the Eskom executive, rather than the project manager. The union asserts that eh decision to delay Outage 225, during which the three Unit 2 steam generators were meant to be replaced, was not the fault of the projects managers, but was instead designed to facilitate a “payment agreement” concluded between Eskom and Framatome executives. Eskom disputes this arguing that the delay was the result of “several serious deficiencies in the front-end loading of the project that would have caused significant delays to the outage a...
Average carbon dioxide (CO2) emissions from new cars registered in Europe dropped by 12% in 2020 compared with the year before, says a new report from the European Environment Agency (EEA). The main reason for the sharp decline was a surge in the share of electric vehicle (EV) registrations compared with internal combustion engine vehicle sales. The share of EV registrations tripled from 3.5% in 2019, to 11.6% in 2020 (including 6.2% battery electric vehicles and 5.4% plug-in hybrid electric vehicles). Despite the shrinking overall market for new cars owing to the Covid-19 pandemic, the total number of new electric cars registered in 2020 increased to more than one-million. The EEA adds that about 1.4-million new vans were registered in Europe in 2020, with the average emissions 1.9% lower than in 2019. The share of electric van sales increased from 1.4% in 2019, to 2.3% in 2020.
Amid intense load-shedding, which has been under way continuously since early September and has at times been implemented at Stage 6, President Cyril Ramaphosa has warned that there is “no quick fix” to the problem, which he says has “a long history”. Writing in his weekly newsletter a week after having cut short a working visit abroad, notably his participation in the seventy-seventh Session of the United Nations General Assembly, the President acknowledged widespread public anger, which he described as “wholly justified”. While conspicuously refraining from criticising the current Eskom leadership, the President said: “Given the unpredictable performance of Eskom’s fleet of coal-fired power stations, we will not be able to eliminate loadshedding in the short term. This is the unfortunate reality of our situation, which has had a long history.” No elaboration was provided by Ramaphosa regarding this “long history”, but it has been widely reported that government’s failure to ensure that new capacity was built timeously in line with Eskom’s warnings that such capacity would be required before 2010 is a key cause of the current crisis. LONG HISTORY? Once the build programme eventually began in 2007, it soon emerged to be extremely poorly planned, with execution further hampered by design defects and corruption. By 2008, load-shedding was introduced as the old plants started feeling the effects of being operated at an energy utilisation factor well above the global average. The problem was amplified by massive delays and cost overruns at Medupi and Kusile and Ingula, leading to warnings by energy analysts in about 2014 that the energy availability factor of the old coal fleet would continue to decline unless new capacity was added to create the space needed to conduct maintenance. Instead, the then Eskom leadership at the utility doubled down by refusing to enter into new power purchase agreements with independent power producers, claiming a return to a surplus operating position. Policy inertia followed until 2018, when renewables projects that were procured in 2014 where eventually allowed to proceed. However, procurement of additional capacity was delayed by the finalisation of the updated Integrated Resource Plan, which was eventually Gazetted in October 2019. It then took months before Ministerial determinations required to facilitate further procurement were published and the fifth bid window of the renewables bidding round was eventually initiated only in April 2021. To date, only three wind projects of the 25 projects named as preferred projects in October, have signed power purchase agreements, but none have as yet progressed to financial close. All the while, the new Medupi and Kusile units have been underperforming, while the extended maintenance required to prepare Koeberg for a life extension has been poorly implemented leaving one unit out of operation for most of 2022, adding one stage of load-shedding whenever power cuts have been implemented. The crisis has been made substantially worse in recent years by strikes, sabotage and ongoing corruption at certain stations. 3.6 TWH OF CUTS ALREADY Eskom statistics plotted by Clyde Mallinson show that there has been 3.6 TWh of load-shedding for the 2022 year-to-date, double the 1.8 TWh of cuts for the whole of 2021, which was previously recorded as South Africa’s worst-ever year for load-shedding. Depending on the cost of unserved energy used, Mallinson estimates the cost to the economy for the year to date to be between R72-billion and R360-billion. The performance has ramped up pressure on government to intervene at Eskom, but Ramaphosa argued in his letter that addressing breakdowns represents a “significant challenge given the average age of power stations, and that in the past critical maintenance was not undertaken at the necessary intervals”. Nevertheless, he added that government was giving close attention to the skills, experience and capabilities of the Esko...
A group of entrepreneurs on September 23 launched Africa’s first credit ratings agency, Sovereign Africa Ratings (SAR), based in Centurion. The agency also published its first credit rating report on South Africa, grading it “BBB” with a stable outlook in the long term, and “B+” with a stable outlook in the short term, which constitutes investment grade. Standard & Poor’s credit rating for South Africa stands at ‘BB-’ with a positive outlook. Fitch’s rating was last reported at ‘BB-’ with a stable outlook. Moody’s Investor Service has a ‘Ba2’ rating with a negative outlook on South Africa. In its rating, SAR places emphasis on the South African government’s ability, capacity and proven track record to honour its debt obligations. SAR’s credit rating model comprises of 82 variables, which also translate into risk determinants, including fiscal, economic, environment, governance, climate change and wealth generated by natural resources aspects. SAR considered South Africa’ tax revenue generation, liquidity, external position and its amount of reserves relative to imports. The ratings agency finds that the country’s deteriorating and aging infrastructure hampers its economy and trade, as do its inefficient ports. The country’s rising interest rates, weak exchange rates and rising inflation all have a bearing on its creditworthiness and performance. SAR chief ratings officer David Mosaka finds South Africa’s economy is growing at a rate of 1.9% this year, and likely 1.4% next year, which is not conducive for meaningful employment creation or tax revenue generation. The agency prides itself on considering projections, contingent liabilities, historical performance of indicators and prospects of government expenditure as some of its differentiating factors as a credit ratings agency. Another differentiating factor of the agency is the significant weight it gives to mineral wealth as a performance indicator, especially for Africa and its well-endowed mineral resources. Mosaka says as the agency grows in the market, it will generate sub-ratings for African countries. He vows on behalf of the entity that it will not be characterised by conflict of interest, and will rather be prudent, thorough and objective in its research and analysis. SAR chairperson Portia Ravhuhali says the ratings industry has not seen new entrants in the market for more than a century. The three giant ratings agencies of Standard & Poor’s, Moody’s and Fitch have been around since 1860, 1909 and 1913, respectively, and have captured 95% of the credit ratings market. She affirms SAR will be a catalyst of change in the African economy and help to restart its economic outlook. Ravhuhali believes SAR will undoubtedly impact on Africa’s financial system. “Our credibility is our only real currency. SAR commits to quality control procedures, well-researched methodologies and ethical business practices.” SAR, with its nine board members, are at an advantage in that its permanent presence is in an emerging market and on the continent – close to the sources of information. Ravhuhali is confident that local experts have a deeper appreciation and insights into South Africa’s economic aspects, and can easily tap into more local understandings of assets. “SAR have a unique vantage point to evaluate emerging economies, especially since on-the-ground, informal activity does not often get factored into real gross domestic product figures,” she explains, adding that SAR will zoom in on all kinds of economic activity that bears significance to credit ratings and economic performance, without long-existing prejudice and colonial perspectives that are often prevalent with other ratings agencies. SAR CE Dr Sifiso Falala agrees, saying that hard-wired institutions often develop blind spots in evaluations, with some serving interest groups outside of the countries being evaluated. He explains that questions have been raised about the three giant rating agencies’ efficacy, especially a...
The City of Cape Town plans to build its first grid-connected solar plant next year as one of its interventions to end load-shedding over time. The city has issued the tender for the engineering, procurement and construction of a 7 MW solar photovoltaic (PV) facility in Atlantis. The facility will be connected directly to the city's electrical network. The city believes that the construction of similar plants across the metro could follow at a later stage. “The power plant would start generating electricity in 2024 and be in operation for 20 years, with a foreseen annual output of 14.7 GWh,” says Cape Town Mayor Geordin Hill-Lewis. “The city currently purchases most of its electricity from Eskom. High Eskom price escalations expected in future may not be financially sustainable for the city and its residents. “It is expected that the Atlantis solar plant will enhance the city's financial sustainability, as the cost of generating the electricity would be lower than the bulk procurement from Eskom.” Hill-Lewis says reducing the dependency on Eskom also means that the city can develop and explore more climate-friendly power sources than Eskom's coal-fired power stations. “Apart from the city's own build generation, strides have also been made to enable independent power production and small-scale embedded generation,” he adds. “In this financial year, R15-million has been allocated to pay for energy generated by small-scale embedded generators through the feed in tariff of 75.51c/kWh (excluding VAT) and the 25c/kWh incentive offered for small-scale embedded generators. “I recently announced a policy shift allowing qualifying commercial and industrial electricity generators to sell energy to the city. The city also issued its first tender in a new independent power producer (IPP) programme which entails buying 200 MW from IPPs within the city's electricity supply area.” The investment in construction of the Atlantis plant is expected to give the City of Cape Town a R47.2-million gross domestic product boost.
Over the past few days, a number of authorities have made urgent calls for the implementation of measures to address the recent spate of road crashes, says Road Freight Association (RFA) CEO Gavin Kelly. “The Deputy President has also called for an Imbizo to discuss these events.” The list of incidents include a truck illegally overtaking traffic and colliding head-on with a bakkie ferrying school children in Pongola, KwaZulu-Natal. Twenty people were killed. However, notes Kelly, if all the conditions of the National Road Traffic Act, Act 93 of 1996 (as amended) and proclaimed in 1996, had been implemented, monitored and enforced, “then these scenes would not be playing out on a regular basis”. “Add to that the requirements of the Labour Relations Act (LRA), which includes registration with the National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI), the reality that drivers are paid by load, and not as per the very clearly defined conditions of employment, and we would not be where we are today.” Kelly says the RFA was closely involved with the Department of Transport in the late 1980s and early 1990s when it crafted legislation that would “effectively and efficiently” regulate both freight and passenger operators. “This included mechanisms and requirements to deal with the very causes of what we have recently seen happening on our roads. “Unfortunately, through very poor and highly contentious traffic policing and management services, very weak implementation of regulatory requirements by both transport authorities and labour authorities, the ability for any individual to operate a fleet with very little chance of quality control, and the inaction to remove non-compliant fleet operators, we have arrived at the point where we are today.” Kelly says the RFA has “continuously called” for action to be taken against non-compliant operators since the announcement of the Administrative Adjudication of Road Traffic Offences legislation, as well as during the “violence and destruction” caused by those opposed to the employment of foreigners in the trucking industry. “Sadly, the authorities have not heeded our call.” He says those fleet operators who refuse to register with and abide by the NBCRFLI main agreement “must be held accountable and dealt with”. “As the RFA has noted to various Ministers of Transport on various occasions: non-compliant operators – as in not complying with the requirements of the NRTA and the LRA – must be removed from public roads.” Kelly says countries with good road-safety reputations share a number of traits, including professional, well-trained and uncompromising road traffic policing services; strict registration requirements for all public fleet operators; compulsory registration requirements with independent trade associations which check standards compliance before registration; and swift and targeted action against those who choose to be non-compliant. “There is no need for Imbizos and other gatherings. There is, however, a need to remove non-compliant operators from the road.”
State-owned Eskom, the South African Renewable Energy Technology Centre (Saretec) – based at the Cape Peninsula University of Technology (CPUT) – and the Global Energy Alliance for People and Planet (GEAPP) have signed a partnership agreement for the development of a new training facility to be established at the soon-to-be-decommissioned Komati power station, in Mpumalanga. The training facility is part of Eskom’s contribution to a just transition for the local community as the Komati power station is decommissioned. The facility will enable Eskom to reskill, retrain and upskill workers and communities, where needed, with a view to developing skills, among which would be skills aimed at serving in renewable energy generation projects that are planned for the future. “We do not have enough skills in the country to meet the jobs that will be created through the renewables value chain. Launching this skills training facility is part of meeting that need. When this training facility works, we will replicate it at all of our power stations,” Eskom Just Energy Transition GM Mandy Rambharos said at the signing ceremony held at the power station on September 23. In addition to the training facility, which is part of Eskom’s Komati Repowering and Repurposing project, Komati, which once had 1 000 MW coal-fired generation capacity, will now be repowered with 150 MW of solar, 70 MW of wind and 150 MW of batteries. Eskom has also established a containerised microgrid assembly factory at the mothballed power plant. The Komati Repowering and Repurposing project is one of the largest coal-fired power plant decommissioning, repowering and repurposing projects globally and it is hoped that it will provide a tangible case study on how to transition fossil fuel assets to cleaner sources of energy. “Mpumalanga is endowed with the best of resources for the just energy transition – wind, solar, skilled people and available grid capacity – and, therefore, has the potential to once again become the thriving energy hub of the country,” Eskom spokesperson Sikonathi Mantshantsha said at the signing ceremony. The funding for the training facility will be provided by the GEAPP. These funds will be used to establish the training facility and will enable Saretec – the only fully accredited training centre for renewable energy in South Africa recognised by the Quality Council for Trades and Occupations – and Eskom to educate, reskill and upskill Eskom Komati power station staff and qualifying beneficiaries from the surrounding communities in the Mpumalanga region. Upon completion, the training centre will be managed by Eskom’s Academy of Learning, which will be supported by Saretec to achieve accreditation over time, enabling Eskom to replicate this initiative in other locations. “South Africa can be a lighthouse for emerging markets, demonstrating the way to achieve a truly just, job-creating energy transition. This new training facility will focus on the upskilling of workers before decommissioning has even begun. It can inform reskilling programmes at other power stations and catalyse investment in South Africa’s energy transition,” GEAPP executive director Joseph Nganga highlighted. Rambharos said the partnership agreement presented a unique opportunity for the creation and scaling up of new industries across the renewables value chain. Taking full advantage of these opportunities would require the retraining and upskilling of parts of South African workforce. “This will mitigate the risk of job losses related to the decommissioning of coal-fired power stations and create new job opportunities, particularly for unemployed young people. The Komati Training Facility will serve as a blueprint for how these training requirements can be fulfilled,” she said, reiterating Eskom’s previously stated vision for Mpumalanga to remain the energy hub of South Africa. “Saretec is very different to other energy centres around the world and I know that we have the req...
Engineering News Editor Terence Creamer talks about society's growing anger over load-shedding, the National Energy Regulator of South Africa's public hearings into Eskom's request for a 32% tariff hike and the signing of project agreements for three wind projects under Bid Window 5.
Stellantis Middle East and Africa has unveiled its Dare Forward 2030 strategic plan for the region that will see it aim for 22% market share by 2030, boosted by the launch of around 55 new vehicles/derivatives. The Stellantis group includes the Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall, Free2move and Leasys brands. “Dare Forward 2030 will lead us to leadership in Middle East and Africa region,” says Stellantis Middle East and Africa COO Samir Cherfan. “Building on our current tailored and robust commercial and industrial setups in the region, we aim to consolidate our position in the Mediterranean Crown and the French Overseas Territories, while strengthening our position in sub-Saharan Africa and ramping up our market share in Middle East and South Africa.” Around 25% of the 55 new vehicle/derivatives to be launched by 2030 in the region will be low-emission vehicles (LEVs), which refer to battery electric, fuel-cell and plug-in hybrid vehicles, notes Cherfan. Also, by the same year, Stellantis plans for one-third of all sales to happen online, with a single digital marketplace available to all customers by 2027. Jeep is one brand that has already lifted the veil on its LEV future, noting it will introduce four all-electric sports-utility vehicles (SUVs) in North America and in Europe by 2025. Around 50% of Jeep sales in the US and 100% of sales in Europe will be battery-electric vehicles by 2030, says Stellantis. Two fully electric SUVs – the new Jeep Recon and new Wagoneer, code name Wagoneer S – are set to launch in North America and other regions around the world by 2025, while the all-new, all-electric Jeep Avenger will launch in Europe early next year. Stellantis South Africa currently holds a 1.54% share in the total domestic new-vehicle market.
The development of a regional five-year masterplan to nurture the engineering skills needed to support manufacturing in South Africa as the automotive industry transitions to future mobility, including electric vehicles (EVs), has started, says the Automotive Industry Development Centre Eastern Cape (AIDC EC). Shaped by policy makers, educational institutions, skills development practitioners and automotive industry role-players, and led by the AIDC EC, the masterplan framework identifies the key elements of a common, integrated engineering offering from high school to the institutions of higher learning in the Eastern Cape. The Eastern Cape houses several vehicle manufacturers, including Mercedes-Benz, Volkswagen, Isuzu, Ford and FAW, and contributes 38% of South Africa’s total vehicle production and 50% of its exports. “It is essential that we work closely with our manufacturers so that the projected employment opportunities presented by a reshaped value-chain for new-energy vehicles are exploited by locally skilled candidates,” says AIDC EC CEO Thabo Shenxane. The province needs to “refine its budgeting and focus, among other priorities, on an integrated engineering skills masterplan with urgency”. National Association of Automotive Component and Allied Manufacturers (Naacam) knowledge services project manager Beth Dealtry says Naacam’s vision for the masterplan will be to ensure that a lack of skills is not a barrier to transformation, localisation and inclusion in the next five years. “In the context of an anticipated global shortage of skills around new energy vehicles, the masterplan will play a critical role in growing and transforming South Africa’s automotive sector.” Shenxane says a number of immediate projects will be implemented in the Eastern Cape as part of the development of the masterplan. These are the drafting of a schedule of EV training courses to be offered to automotive role-players and students; the inclusion of e-mobility in the engineering curricula at both higher educational institutions and technical and vocational education and training (TVET) colleges in the province; talking to vehicle manufacturers about donations to TVET colleges of equipment that is required by these institutions as they deliver their curricula to students; and the upskilling of existing lecturers, both at universities and TVET colleges. “The transition in vehicle technology to e-mobility requires a revolution in automotive manufacturing, aftermarket and support processes, and that, in turn, demands a different skills-set,” explains Shenxane. “Without those skills South Africa’s automotive manufacturing sector will be severely threatened, along with the Eastern Cape economy.” Naamsa | The Automotive Business Council transformation and public policy executive Tshetlhe Litheko says the rise of electric and new energy vehicles has forced the automotive sector to rethink its approach to production. Naamsa expects that 40% of all European vehicle sales will be EVs by 2030, which could cost the South African automotive industry billions in export earnings a year should it not transition to EV manufacturing in time. No battery electric vehicles are currently produced in South Africa.
A deadline of the end of October has been set for the signing of power purchase and implementation agreements by the remaining 22 Bid Window Five (BW5) renewables projects, following the conclusion of the first such agreements with three wind projects, with a combined capacity of 420 MW and a combined investment value of R11-billion. IPP Office head Bernard Magoro reported on Thursday that all BW5 preferred bidders had now secured grid-connection Budget Quotes from Eskom, the absence of which had delayed the conclusion of the round from an initial deadline of April, and that “the next step is to now sign the agreements”. “It did take long to get these three project agreements concluded . . . but the base agreements that have emerged should make the process much easier for the remaining 22 projects. “So, we are ready for other projects to come forward and to sign by the end of October,” Magoro said at an event in Centurion, Gauteng, where wind project agreements were signed with EDF and black empowerment partner Gibb-Crede, including power purchase agreements with Eskom. “Given the current load-shedding, there is really no reason to delay and there will be other wind bid windows. “So, if you miss this bus, there is another bid window that’s coming,” he added, indicating that the IPP Office was prepared to move forward from the round even if some projects failed to conclude agreements. Likewise, he indicated that the deadline for the signing of project agreements for the remaining Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) preferred bidders, including the three power ship projects, had also been set for the end of October. “We have been looking at a few bid-optimisation requests that we received from the preferred bidders . . . and we have secured legal opinion on those so that the process is not compromised. “That, too, has been finalised and we now want to conclude both programmes [BW5 and RMIPPPP] by the end of October.” BATTERY STORAGE BID WINDOW Magoro also announced that a battery storage bidding round would be launched on September 30 and that bid submissions under BW6 of the renewables programme, which had been expanded from 2 600 MW to 4 200 MW, were anticipated on October 3. Lessons, he said, had been learnt from the BW5 delays, which had been extensive, with preferred bidders having been identified in October last year following the launch of the bid window in April last year. The projects were initially anticipated to reach financial close by the end of April this year, but when that deadline was missed, a staggered close process was announced for the end of July and the end of September. The initial three wind projects have been given 60 days to achieve financial close, while those that sign their project agreements at the end of October are likely to be given until the end of the year to progress to financial close. Most of the delays have related to securing Budget Quotes for access to the Eskom grid. To overcome those delays, Eskom’s Grid Access Unit had been beefed up and BW6 bidders had been instructed to secure cost estimate letters (CELs) from the unit before submitting a project bid. Eskom transmission group executives Segomoco Scheppers reported that the Grid Access Unit had issued CELs to prospective BW6 bidders relating to projects with a potential capacity of 32 000 MW. He said the market had also been informed of Eskom’s grid constraints, particularly in the Cape provinces, as well as to where residual capacity remained through the publication of the Generation Connection Capacity Assessment. Additional information regarding available grid capacity would be released when the utility published its latest Transmission Development Plan at the end of October. WORK UNDER WAY Meanwhile, EDF’s Tristan de Drouas announced that work had been under way since July on a self-build substation that would support not only the three 140 MW-apiece wind farms, but also other renewables ...
The affordability of the 32% tariff hike being sought by Eskom for implementation on April 1 next year came under intense scrutiny on the last day of National Energy Regulator of South Africa (Nersa) public hearings. The regulator, which adjudicated the first year of the three-year fifth multiyear price determination (MYPD5) in January, when it approved a 9.61% increase for the 2023 financial year against an Eskom request for 20.5%, expects to decide for the 2024 and 2025 financial years by November 7. The utility has applied for allowable revenue of R351-billion for 2024 and R382-billion for 2025, inclusive of the R15-billion a year arising from a court order stipulating that the utility be allowed to recover, over five financial years, the full R69-billion equity injection Nersa incorrectly deducted from its MYPD4 allowable revenue. If granted, the standard Eskom tariff would rise to 172.6c/kWh on April 1, or by more than 32%. Eskom argues that even after such a steep hike, the tariff would remain below a cost-reflective level, which it calculates to be 185.7c/kWh. TERRIBLE INJUSTICE The utility’s request was strongly opposed by all of the presenters on the third and final day of the hearings, including Cape Town Mayor Geordin Hill-Lewis, who urged Nersa to unequivocally reject the request and instead grant no increase above the current inflation rate. Warning that South Africans were being confronted with a cost-of-living crisis, Hill-Lewis argued that it would be a “terrible injustice” to expect electricity consumers to pay for previous mismanagement and corruption at the utility, particularly in the context of intensifying load-shedding. He noted, too, that all of the 70 bidders that responded to the city’s recent tender to procure an initial 200 MW of renewable electricity had been able to beat even Eskom’s lowest prevailing tariff. City of Johannesburg MMC Michael Sun added that the proposed tariff hike would have a “devastating impact” on the citizens of Johannesburg, erode business confidence and disrupt economic recovery. Sun added that City Power was of the view that Eskom could reduce its proposed revenue by R55-billion, for each of the years covered by the application, reducing the increase to a maximum of 18.4% for the 2024 financial year. However, Mogale City mayor Tyron Gray also called for an inflation-linked increase, indicating that ongoing load-shedding was resulting in water disruptions in the high-lying Gauteng city and that a price hike would exacerbate the problem, owing to the nature of the water/power cross subsidies in place. DISALLOW DIESEL REQUEST Energy Intensive Users Group (EIUG) CEO Fanele Mondi warned that a 32% increase would have a significant negative impact on its mining and heavy-industrial members, given that electricity represented up to 40% of their costs. Mondi made specific recommendations with regard to how Nersa should treat various cost components in Eskom’s application, including the utility request for R16.9-billion next year and R17.7-billion in the 2025 financial year to operate its diesel-fuelled power plants. The increase outlined by Eskom is based on deploying the plants at a load factor of 12%, rather than 5%, to offset the fall in the coal and nuclear fleet’s energy availability factor to 59% from 62%. “This represents a staggering R11.8-billion and R12.41-billion [additional cost for diesel] for the respective years,” he noted. The EIUG requested Nersa to disallow the request for higher diesel volumes, which made up 60% of the increase, and instead base any increased allowance on real diesel price increases. “Nersa should get a better explanation for the seemingly excessive volume increase. “If it is due to poor generation performance, rather consider investing more money in maintenance and demand-side-management incentives. “Such a reallocation will be a more sustainable investment financially with an opportunity to decrease the costs in the medium term,” Mondi argue...
Volvo Trucks has started series production of the battery electric versions of the company’s heavy-duty FH, FM and FMX ranges. These trucks can operate at a total weight of 44 t (gross combination weight). With these new additions, the Swedish truck manufacturer has six electric truck models in series production globally. “This is a milestone and proves that we are leading the transformation of the industry,” says Volvo Trucks president Roger Alm. “It’s less than two years ago since we showcased our heavy electric trucks for the very first time. “Now we are ramping up volumes and will deliver these great trucks to customers all over Europe, and later on also to customers in Asia, Australia and Latin America.” In South Africa, local customer KDG Logistics has signed a letter of intent to purchase two Volvo FM 4x2 electric truck tractors. These units are expected to arrive during the second quarter of next year. They will be used by KDG Logistics – an auto carrier – in a port-to-factory operation in Durban. “This marks the first steps locally in embracing electric vehicles as part of sustainable transport solutions here in South Africa,” says Volvo Trucks South Africa MD Waldemar Christensen. “Volvo Trucks and our customers are taking on the challenge to embrace zero tailpipe-emission transport, despite a lack of the necessary infrastructure and legislation to drive more progress in this area locally.” Series production of Volvo’s heaviest electric trucks will start in the Tuve factory in Gothenburg, Sweden, and next year in the factory in Ghent, Belgium. Volvo produces its electric trucks on the same line as its conventional trucks. The batteries are supplied by Volvo Trucks’ new battery assembly plant in Ghent. The demand for electric trucks is rapidly increasing in many markets, notes Volvo Trucks. The company says around 45% of all goods transported in Europe today typically travel a distance of less than 300 km, which means its electric portfolio could cover almost half of the continent’s road logistics market. “We have sold around 1 000 units of our heavy electric trucks and more than 2 600 of our electric trucks in total,” says Alm. “We expect volumes to increase significantly in the next few years. By 2030, at least 50% of the trucks we sell globally should be electric.” Volvo Trucks’ electric line-up of six truck models covers a range of applications, including city distribution, refuse handling, regional transport and construction work.
Eskom told the regulator on Tuesday that its immediate focus was on returning 14 coal units to service over the coming four days, in an effort to recover 8 012 MW of coal generation so as to ease load-shedding, which was being implemented at Stage 5. Although the National Energy Regulator of South Africa’s (Nersa’s) hearings are concerned primarily with the State-owned utility’s request for a 32% tariff hike, regulatory members had requested an update on load-shedding and its implications for the utility’s costs during the first day of hearings on Monday. Members were particularly concerned about Eskom’s newly-published energy availability factor (EAF) assumption of 59% for the coming two financial years, which would result in a heavy reliance on the open-cycle gas turbines (OCGTs). Eskom is currently assuming that the load factor of the OCGT plants will rise from 5% to 12%, which would trigger a surge in its diesel costs to R16.9-billion in 2023/24 and R17.7-billion in 2024/25. For the year to date, a period that coincides with South Africa’s worst-ever load-shedding, Eskom has already spent R7.7-billion on diesel and has been operating the OCGT plants at an average load factor of 14%. On the second day of hearings, Eskom generation executive Eric Shunmagum revealed that the utility was aiming to return eight units, with a combine capacity of 3 990 MW, during the course of Tuesday, September 20. It was targeting three more, representing 1 115 MW, on Wednesday and another three units, with a combined capacity of 1 837 MW, on Friday, so as to ramp down rotational cuts to Stage 2 by the weekend. Shunmagum said the generation unit’s operational recovery plan was geared towards improving the EAF from 59% to at least 70% from the end of March 2024 onwards, by when some older stations would have been decommissioned and Kusile completed. Until then, the OCGTs would be used extensively, as had been the case since the start of the current financial year on April 1, when the load factor had dipped below 10% in just a single month (August) and had been as high as 18.8% during June. Questioned about the prudency of using the OCGT plants so extensively, Eskom argued that the cost to the country was “much cheaper when compared to higher levels of load-shedding”. Beyond the immediate return to service plan for the current week, Shunmagum said the recovery plan would focus on the ‘Top 6 priority stations’ of Tutuka, Duvha, Majuba, Kusile Matla and Kendal. “All our efforts will be going into those stations as we begin shutting the oldest stations in the next two to three years.” After March 31, the focus would shift to the next set of priority stations of Matimba, Lethabo, Medupi, Kriel and Arnot. “These stations were specifically selected as they are amongst the highest contributors to the unplanned load losses and any improvement at these stations will see a massive change in the EAF,” Shunmagum asserted. Priority would also be given to a successful execution of the steam generator replacement projects at Koeberg Unit 1, following serious difficulties at Unit 2. Koeberg Unit 2 was returned to service in August without the steam generators having been replaced because of a lack of project preparation by Eskom and had since tripped, further intensifying September load-shedding.
Intergovernmental organisation the International Energy Agency (IEA) in its 'Breakthrough Agenda Report 2022' says international collaboration will be critical to successfully transition to sustainability, given the global scale and fast pace of change that is required. "Action by governments and businesses individually is necessary, but not sufficient. Well-targeted international collaboration can make low-carbon transitions faster, less difficult and lower cost. “By aligning and coordinating actions internationally, countries and businesses can accelerate innovation, create stronger signals for investment and larger economies of scale, and establish level playing fields, where needed, to ensure that competition is a driver of the transition and not a brake," it says. "International assistance, finance and the sharing of best practice can support widespread adoption of effective policies and available technologies. International infrastructure can enable cross-border flows of clean energy. Without international collaboration, the transition to net-zero global emissions could be delayed by decades," the IEA emphasises. The IEA Breakthrough Agenda Report 2022 focuses on actions in five sectors – power, hydrogen, road transport, steel and agriculture, which account for more than 50% of global greenhouse-gas emissions, and for which the signatories have so far agreed on goals under the Breakthrough Agenda. "Clean technologies and sustainable solutions are not yet the most affordable or accessible options in these sectors, except in the power sector, and even in the power sector, this is not yet the case in all countries. "Meeting the Breakthrough Agenda goals in these sectors will require concerted action from governments, businesses and civil society, while doing so could enable all countries to make faster progress, greatly increasing the chances of avoiding more dangerous levels of climate change and meeting the United Nations Sustainable Development Goals," the IEA says. SECTOR RECOMMENDATIONS The power sector accounts for about 13 Gt of carbon dioxide equivalent (CO2e), or 23%, of total emissions, which has risen by about 10% since 2010 and needs to fall by more than 50% by 2030. Investment will need to grow 25% each year, reaching $2-trillion a year by 2030. Hydrogen production and use, meanwhile, accounts for about 0.9 Gt of CO2e, or 1.5% of total emissions. Renewable and low-carbon hydrogen production currently accounts for less than 1% of total production. Targets and commitments to use low-carbon and renewable hydrogen are equivalent to 3% of current total hydrogen demand. Currently, 15% of ammonia and 28% of methanol is internationally traded, the IEA report indicates. "Governments and companies should coordinate internationally to increase commitments for the use of low-carbon and renewable hydrogen in sectors where hydrogen is currently used, supported by specific policies and purchase agreements to collectively send a strong demand signal and mobilise investment in production. "In new priority application sectors, countries should share learning to accelerate early deployment. This should be done in a manner that ensures a level playing field in international trade," the IEA recommends. Further, the road transport sector accounts for about 6 Gt of CO2e, or 10% of total emissions, which has risen by 13% since 2010 and needs to decrease by nearly 33% by 2030. "Public charging infrastructure needs to increase ten-fold by 2030. If major markets align their policies with zero-emissions vehicle (ZEV) sales by 2035, cost parity between ZEVs and internal combustion engine vehicles could be reached several years earlier. “Further, more than 60% of the vehicles added to the roads in Africa each year are imported used vehicles," the IEA report highlights. Meanwhile, the steel sector accounts for about 3 Gt of CO2e, or 5% of total emissions, which has risen by about 15% since 2010 and needs to fall by about 25% by 2030. Glob...
President Cyril Ramaphosa, who cut short his international engagements as South Africa once again descended into Stage 6 load-shedding, has acknowledged that priority has to be given to solving the electricity crisis if the country aims to attract the investment required to raise growth and tackle high levels of unemployment. Writing in his weekly newsletter following a meeting in Washington DC with US President Joe Biden, where it was agreed that a joint task force on trade and investment be established to increase business ties between the two countries, Ramaphosa said: “First and foremost, we have to overcome the electricity crisis”. “Solving the electricity crisis is necessary if we are to realise the potential of our economy. “In 2018, we launched an ambitious investment drive to raise R1.2-trillion in new investments over five years. “To date, and with still a year to go, we have raised more than 90% of that amount in commitments from both domestic and foreign investors. “Of these commitments around R330-billion has already flowed into the economy, opening new factories, expanding production lines and creating new jobs,” he wrote, highlighting Ford South Africa’s R16-billion investment to expand the local production of the new-generation Ford Ranger, as well as recent plant openings by Sappi and Hesto Harnesses. Notably avoiding any criticism of the current Eskom leadership, the President said the severe load-shedding of recent weeks was a reminder of how unstable Eskom’s ageing power stations had become. It had also given “greater urgency” to the measures announced on July 25 to stabilise electricity supply. “On Sunday, I held an urgent virtual meeting with Ministers and officials on the reasons for the current load-shedding and the steps being taken to reduce the severity and frequency of load-shedding in the coming days and weeks. “Eskom has already announced some of the measures it is taking, and we will remain seized with this issue until the situation is resolved.” The State-owned utility had received board and shareholder approval to buy 1 000 MW of existing surplus capacity from existing independent power producers (IPPs), industrial businesses with generating capacity and from countries in the region that were in a position to export electricity to South Africa. Eskom and Public Enterprises Minister Pravin Gordhan indicated that the first power arising from IPPs and co-generators should be available soon, with the utility indicating that it aims to sign the first power supply agreement during the course of the current week. “Additionally, Eskom has the go-ahead to procure over 200 MW from the Southern African Power Pool, as part of our immediate solutions to our energy shortfall,” Gordhan announced. He also reported that Eskom had recruited experienced former employees and energy experts who responded to the call to assist Eskom, reporting that in the past week alone 18 seasoned energy specialists had re-entered the Eskom system to assist with operations.
A signing ceremony will be held on Thursday for three wind projects that were selected in October last year as preferred bidders under Bid Window Five (BW5) of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). In total, 25 wind and solar photovoltaic (PV) projects were named as preferred bidders by Mineral Resources and Energy Minister Gwede Mantashe following a bidding process that was launched in April last year. The Department of Mineral Resources and Energy has confirmed that the ceremony will take place at the IPP Office in Centurion, Gauteng, where project agreements will be signed for the Coleskop, San Kraal and Phezukomoya wind farms. No mention was made about the nature of the agreements to be signed, but it is anticipated that actual financial close will follow at a later stage. In addition, the department reports that information will be provided on Thursday regarding the “status of the preparations to sign with the remaining 22 preferred bidders under the REIPPPP BW5”. The bid window was the first bidding round to be held following a seven-year disruption to the REIPPPP after Eskom refused to enter into contracts to buy electricity from projects procured in 2014. There was an initial expectation that the projects would reach financial close by the end of April at the latest, but the process has been hampered by slow delivery of grid connection Budget Quotes from Eskom, as well as difficulties solar projects had in meeting the local-content stipulation placed on PV panels. In addition, there have been several reports indicating that the commercial viability of several of the projects has been severely undermined by steep inflation in energy markets, fuelled by Covid lockdowns in China and by Russia’s invasion of Ukraine.
The Brunel Solar Team from the Netherlands has won the 2022 Sasol Solar Challenge, followed by the Agoria team, from Belgium, with the Tshwane University of Technology (TUT) team placed third. Brunel won with a distance of 4 228.2 km, with Agoria at 4 189.9 km, and TUT some distance back, at 2 682.4 km. The solar challenge is a distance-based race, and not a timed race, with the team harvesting the most kilometres from the sun during the event declared the winner. The race started in Johannesburg on September 9, with the teams driving across five provinces and through 18 towns to reach Cape Town on September 16. “A key focus of the Sasol Solar Challenge is to bring our youth closer to science, technology, engineering, maths, and alternative energy innovations and, in so doing, give them the opportunity to experience these concepts hands-on in order to have a better understanding of how these sectors can benefit our society,” says Sasol group communication and brand management VP Elton Fortuin. “In the past eight days this is exactly what the teams have done and we are proud to have touched many young minds and hopefully inspired curiosity and passion in science and technology.” Other awards for the 2022 event include the navigation award, won by the University of the Free State solar car team, with Agoria again on the podium for winning the award for covering the longest distance in a day, at 609.4 km. The biennial Sasol Solar Challenge is now in its fourteenth year.
Eskom is requesting the National Energy Regulator of South Africa (Nersa) to approve diesel costs of R16.9-billion for its upcoming financial year in line with a material upward revision in the assumed load factor of its diesel-fuelled open cycle gas turbines (OCGTs) from 5% to 12%. The increase is designed to accommodate a steep reduction in the expected energy availability factor (EAF) from the State-owned utility’s coal-dominant fleet, which has been reduced to 59%. In Eskom’s original fifth multiyear price determination (MYPD5) application, submitted in June last year, the assumed EAF was 72%, which was lowered to 62% in January during Nersa’s adjudication of Eskom’s 2023 tariff request. The regulator is currently hosting public hearings into Eskom’s application for a 32% tariff hike for the 2024 financial year, followed by a 9.74% increase for 2025. Nersa granted the utility a 9.6% increase in January for the 2023 financial year, which began on April 1, against an Eskom request for a 20.5% hike. The diesel costs in the application before Nersa represent a significant increase on the R5-billion outlined in January. CFO Calib Cassim told Nersa on Monday that the change was premised on a 60% increase in the volumes of diesel that Eskom was now expecting to consume next year, together with a 40% increase in the price of the fuel, which had risen sharply following Russia’s invasion of Ukraine. During the first six months of the current financial year, Eskom has spent more than R7.7-billion on diesel as it resorted to using its OCGT plants intensively to avoid or limit load-shedding. Rotational power cuts have been implemented for more than 100 days so far in 2022 to close gaps left by the poorly performing coal fleet and the prolonged unavailability of Koeberg Unit 2, which has tripped again following a recent extended maintenance. Eskom has a R500-million diesel budget remaining, but has already indicated that it expects to spend a similar amount on diesel during the second half of the financial year to the end of March as it has year-to-date. Overall, Eskom is seeking R101-billion for primary energy next year to cover expected coal costs of R69-billion (slightly down on the R70-billion outlined in January), diesel cost of R16.9-billion, and start-up fuel oil costs of R6.8-billion (more than double the R3.1-billion assumed in January). Nersa regulatory member Muzi Mkhize questioned Cassim on why consumers should be expected to pay for the additional diesel costs when such costs would not have been incurred had Eskom sustained an EAF of 72%. In response, Cassim argued that resorting to the OCGT plants as a “last resort” was prudent to reduce the cost to the economy of power interruptions. Eskom’s application also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32% being sought. The utility argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by Nersa in a 2021 tariff decision, whereby the regulator reduced Eskom’s RAB from over R1.2-trillion to about R550-billion. Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination. In total, Eskom is requesting allowable revenue of R351-billion, which includes R15-billion arising from a settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom’s MYPD4 revenue, be recouped. It also includes an amount of R1.7-billion arising from a R3.4-billion Regulatory Clearing Account amount awarded to Eskom, which had not yet been liquidated. The Eskom request is facing strong opposition from business and civil society groups, with the Organisation Undoing Tax Abuse (Outa) calling on Nersa during the first day of hearings to limit any increase to the consumer price index. “If the economy...
State-owned power utility Eskom is developing a crowdsourcing digital platform to allow it to supplement its existing skills base to help address its operational challenges. It has invited organisations and individuals, including experienced engineers and technical experts, to participate. The platform will act as a skills database for Eskom to acquire additional expertise and to resolve its urgent business needs. Skills that are needed include, but are not limited to, mechanical, nuclear, electrical, system and maintenance skills, as well as senior artisans and plant operators for coal and nuclear power stations. Skilled individuals interested in assisting Eskom will be able to register on the digital platform once it is developed. In the meantime, they are being asked to contact Eskom human resources executive Elsie Pule at crowdsourcing@eskom.co.za. “Eskom looks forward to collaborating with South African citizens to address the current electricity supply challenges facing the country,” Eskom CE André de Ruyter says. “A diverse cross-section of South Africans have sent enquiries and made themselves available to respond to the call to national service. Eskom is in the process of matching the skills that have already been made available to its needs and will be recruiting the suitable candidates imminently,” he adds. Crowdsourcing is the practice of obtaining information or input into a task or project by enlisting the services of a large number of people, either paid or unpaid, typically through a digital platform. As South Africa has a pool of skilled persons, crowdsourcing of these skills may offer a unique opportunity for available and willing citizens to support Eskom to resolve its business challenges. “In order for Eskom to reap the highest benefit from this diversity of skills, it must also develop a governance mechanism and a platform that will provide equitable opportunity to all those willing to be considered for service,” says Pule. “The process will be driven by the needs of Eskom and will follow a standard governance process for fixed-term contracting.” The crowdsourcing initiative will also leverage partnerships with statutory and non-statutory bodies, such as the Engineering Council of South Africa and others, to ensure Eskom is able to access the best candidates in the electricity supply industry, engineering and technical professions. In recent months, Eskom has received an overwhelming response to its call for skilled personnel to come forward to assist in rebuilding skills inside the organisation, and numerous organisations and individuals have come forward to respond to this critical call for national service. This crowdsourcing initiative was prompted by several offers and submissions received from organisations and individuals, including experienced engineers and technical experts, who have indicated that they could potentially assist Eskom.
The Department of Mineral Resources and Energy (DMRE) has moved to clarify a statement made by Minister Gwede Mantashe that a Bid Window Five (BW5) project under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) had reached financial close earlier this week. Mantashe made the statement in response to a question posed during a briefing held to provide an update on the implementation of the Economic Reconstruction and Recovery Plan, which includes energy security as a priority intervention. In response to an Engineering News enquiry regarding the identity of the project in question, the DMRE made the following statement: “The Minister was referring to confirmation received from the first cohort of projects under BW5 in relation to signing the project agreements by the end of the month.” “The BW5 projects are currently preparing for legal close, to be followed by commercial and ultimately financial close.” In October last year, Mantashe announced the names of the 25 wind and solar projects that emerged as preferred bidders following BW5; the first bidding round to be held following a seven-year disruption to the REIPPPP after Eskom refused to enter into contracts to buy electricity from projects procured in 2014. At the time, there was an expectation that the projects would reach financial close by the end of April at the latest. Progress was hindered, however, by slow delivery of grid connection Budget Quotes from Eskom, as well as difficulties solar projects had in meeting the 100% local-content stipulation placed on photovoltaic (PV) panels. An exemption was later provided lowering the threshold to 35%. The viability of the projects, which were bid at an average tariff of 47.3c/kWh, was also rocked by component and input inflation, which arose as a result of supply-chain disruptions associated with Covid lockdowns in China and which was further amplified following Russia’s invasion of Ukraine. The IPP Office initially announced that the financial-close deadline had been shifted to the end of July for the first 14 BW5 projects and to the end of September for the remaining 11. After the July deadline was missed it was confirmed that the projects had until the end of September to reach financial close. However, DMRE’s latest statement indicates that this too is unlikely, referring only to “signing the project agreements by the end of the month”, without specific reference to financial close. In the meantime, the IPP Office is gearing up for BW6, which has been enlarged from 2 600 MW to 4 200 MW as part of a larger plan announced in July to tackle intensifying load-shedding and close an estimated 6 000 MW supply gap. President Cyril Ramaphosa initially announced that BW6 would be expanded to 5 200 MW. However, the National Energy Crisis Committee reported on September 11 that the decision to proceed with a 4 200 MW round instead had been made to ensure that the procurement process was not delayed by the fact that the energy regulator still needed to concur with a Ministerial determination opening the way for the procurement of more solar PV. On September 16, the National Energy Regulator of South Africa’s public comment period closed in relation to it providing concurrence with Ministerial determinations allowing for the procurement of an additional 18 791 MW of new electricity capacity, including 14 791 MW of new ‘Storage’, ‘PV’ and ‘Wind’. The BW6 submission deadline, meanwhile, is September 22, which was itself shifted from August 11 following the announced enlargement of the round. The National Energy Crisis Committee said government may still seek to procure the full 5 200 MW, but that BW6 would proceed with a 4 200 MW allocation so as to ensure that the round was not delayed.
Engineering News Editor Terence Creamer discusses power utility Eskom's revenue application for the 2024 and 2025 financial years; how the declining performance of the utility's coal fleet is reflected in the revenue application; and the likely outcome.
It’s been an interesting six months,” says Metair CEO Riaz Haffejee as he reflects on his company’s financial results for the six months ended June 30. CFO Sjoerd Douwenga is perhaps a bit less diplomatic as he describes dealing with the Covid-19 pandemic as mere preparation for a culmination of events that saw Metair’s operating profit drop by 73%, to R144-million. Revenue was down 2%, to R5.8-billion, compared with the previous six months. The automotive component and energy storage specialist’s perfect storm was driven by a number of events. The first is hyperinflation in Türkiye, which houses battery producer Mutlu, one of its biggest subsidiaries. June inflation reached 78.6%. Hyperinflation also triggered hyper wage demands, which led to a ten-day strike at Mutlu, explains Douwenga. The strike made a R30-million dent in operating profit. The impact of hyperinflation on profit after tax for the six months under review amounted to R95-million. In Romania, Metair’s Rombat battery business is being impacted by consumer concern, and subsequent frugality, around the war in Ukraine. Rombat is located only 100 km from the Ukranian border. The conflict has also seen a surge in energy prices in Europe, with energy costs roughly three times more than they were 12 months ago, notes Douwenga. Rising energy costs took an almost 4% bite out of operating profit at Rombat for the six months to June 30. Locally, flooding in KwaZulu-Natal earlier this year shut down the Toyota plant for four months, which took a heavy toll on its supplier network, Metair included, bruising the group’s cash flow and liquidity. Douwenga notes that Metair expects to reach the R500-million cap on its business interruption insurance for this event. A sum of R150-million has already been received. Looking ahead, Haffejee says production at Toyota is returning to normal after the plant reopened, while new and expanded production of the new Ford Ranger pickup range will buoy Metair’s component business in the coming months. Metair is also working to deal with hyperinflation in Türkiye on a day-to-day basis, he adds. The energy crisis, however, is likely to intensify, he notes, especially with the European winter on the horizon. “Energy costs can go to three, four times more on top of what they are now,” says Douwenga. It is unlikely that the Ukranian war will be resolved soon. Douwenga notes that 80% of the input costs at Mutlu in Türkiye are hard-currency based, as well as up to 60% of its sales, which lessens the impact of the local inflation cycle. Other good news is that global supply chain costs and predictability are both stabilising. Haffejee says logistics costs are coming down, and that they are now “three to four times” more than pre-Covid-19 conditions, compared with “seven to eight times” last year.
After updating some key cost assumptions, Eskom has confirmed that it will be applying for a 32% tariff hike for implementation on April 1, 2023. The State-owned utility is also applying for a 9.74% increase for its subsequent financial year. The increases are outlined in an addendum to Eskom’s fifth multiyear price determination (MYPD5) application, which contains changes to various key assumptions, including those relating to the cost and use of diesel for its open-cycle gas turbines (OCGTs), as well as independent power producer (IPP) costs. The addendum also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32.02% being sought. Eskom argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by the National Energy Regulator of South Africa (Nersa) in a 2021 tariff decision, whereby the regulator reduced Eskom’s RAB from over R1.2-trillion to about R550-billion. Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination. The 2024 financial year hike outlined in the addendum is slightly below the 38.1% increase contained in a Nersa consultation paper released in July. That paper was published following a court order stipulating that Nersa adjudicate at least Eskom’s 2024 financial year application under the existing MYPD methodology and make a final determination by December 24. Written comments had to be submitted by September 8 and public hearings will be held from September 19 to 23, with Nersa indicating that it plans to make a decision on November 7. Following a court order in 2021, the Energy Regulator adjudicated only the first year of the three-year MYPD5 application, which was submitted in June 2021 and covered the three financial years of 2023, 2024 and 2025. A 9.61% hike was approved for 2023 financial year and was implemented on April 1, 2022, raising Eskom’s allowable revenue to R264-billion for the year. Eskom had applied for a 20.5% increase. The Nersa consultation paper published in July in relation to the 2024 and 2025 financial years also arose following a court order stipulating that Nersa adjudicate at least the 2024 financial year application under the existing MYPD methodology, as a new methodology was yet to be finalised. The increase outlined by Eskom in its updated MYPD5 submission is still based on the allowable revenue figure of R335-billion included in the original 2021 application. After RCA and court-ordered revenue allowances, however, the figure rises to R351-billion. That larger revenue figure includes R15-billion arising from settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom’s MYPD4 revenue, be recouped. In terms of the settlement, the outstanding R59-billion would be recovered during the financial years from 2024 to 2027. The R351-billion revenue figure also includes an amount of R1.7-billion arising from a R3.4-billion RCA amount awarded to Eskom, which it has not yet liquidated. Despite a slight upward adjustment to assumed sales for the year, the standard tariff would need to rise by 32% next year for Eskom to secure the full allowable revenue being sought. As has become the norm, the request will be strongly resisted by stakeholders during public hearings. Besides the large depreciation amount outlined, the other two major contributors to the 32% requests relate to primary-energy costs, which make up 7.85% of the increase being sought and IPP costs, which comprise 9.05% BIG RISE IN DIESEL COSTS OUTLINED The main driver behind the primary energy cost rise is a revision to Eskom’s assumption regarding diesel, the price of which has increased materially since Russian’s invasion of Ukraine. The utility is also expecting to rely more heavily on its OCGTs over the coming two years...
A R7.7-billion expansion and environmental upgrade project at paper and pulp company Sappi’s Saiccor mill was officially opened by President Cyril Ramaphosa, on September 13 in Umkomaas, KwaZulu-Natal. Sappi said the project – which was first announced at the 2018 Presidential Investment Conference – was in response to Ramaphosa’s call for investment into the South African economy. The President was joined in the ceremonial ribbon-cutting ceremony by a delegation of representatives, including Trade, Industry and Competition Minister Ebrahim Patel, KwaZulu-Natal Premier Nomusa Dube-Ncube and Economic Development, Tourism and Environmental Affairs MEC Siboniso Duma. They were joined by Sappi chairperson Sir Nigel Rudd, Sappi CEO Steve Binnie and Sappi Southern Africa CEO Alex Thiel. The expansion and upgrades included a new evaporator, recovery boiler, screening and washing plant, as well as upgrades to the bleach plant and pulp machines, improved recovery circuits and additional magnesium digesters. New technology employed incorporates improved washing technology to improve water and energy efficiency, better cooking technology for improved pulp quality control, the application of robotics to facilitate debottlenecking, as well as shop-floor digitisation for improved commissioning, control and operational efficiency. Upgrades to the woodyard were carried out as well to enable smooth logistics supply chain operations. This included the installation of offloading equipment, side-arm rail carriage chargers and new chipper lines. The expansion also resulted in the installation of the world’s largest sulphite recovery boiler, with the capacity to process up to 1 500 t/d of dry solids. Additionally, 110 km of cabling was installed, along with 56 km of piping. More than 2 000 trucks of concrete were used, amounting to about 30 000 t, as well as half the amount of steel that went into building the Eiffel Tower. Notably, the pipe bridge modularisation was a first for Sappi Southern Africa, which the company believed to be the largest of its kind in South Africa. “The board believes the South African forestry industry is globally competitive and can make further substantial contributions to the South African economy. This investment reflects our confidence in our South African operations,” Rudd said. Binnie noted that the reason for Sappi’s investment in dissolving pulp was that global demand continued to grow for renewable textiles derived from sustainable wood fibre. Fabrics made from cellulose differ from other feedstock fibres in that they are breathable, absorbent, recyclable and biodegradable. Woodfibre provides a sustainable alternative to other feedstocks. “Sappi supplies over 50% of the world’s Lyocell demand, the next-generation textile material made from cellulosic fibres. This expansion project not only meets customer demand for greater dissolving pulp production – and in particular Lyocell – but also significantly reduces the mill’s environmental footprint and supports Sappi’s decarbonisation journey, while also generating an additional R1-billion a year in direct benefit to the KwaZulu-Natal economy,” he explained. Binnie commended the Sappi role-players who had conceptualised the project and brought it to fruition, despite difficult conditions and interruptions resulting from Covid-19 restrictions. “By using renewable and sustainably sourced wood to produce circular, innovative biobased products, Sappi [is] reducing and replacing the need for fossil-based products,” he said. The Saiccor mill was acquired by Sappi in 1989 and extended its global reach into the international dissolving pulp markets. Since then, the mill has undergone three expansion projects to keep pace with global demand. Branded as ‘Verve’, almost all of the dissolving pulp produced at the mill is sold globally into the viscose staple fibres markets for use in textiles and clothing for various brands. The project will help Sappi achieve its target of r...
The National Energy Regulator of South Africa (Nersa) has confirmed that Eskom has not applied for a Ministerial determination for a 3 000 MW combined cycle gas power plant at Richards Bay in terms of the Integrated Resource Plan of 2019 (IRP2019), but is instead seeking permission to deviate from the IRP2019. On September 12, Nersa circulated an erratum to a consultation paper published for public comment on August 25 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. In its original notice and consultation paper, the regulator said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the IRP2019. The table shows the allocation of 1 000 MW of gas/diesel by 2024 and 2 000 MW by 2027, and the original consultation paper stated that the Minister had determined to procure the total capacity of 3 000 MW of gas before 2028. In the erratum, however, Nersa clarified that the gas determination under consideration for concurrence related to an application submitted by Eskom to Mineral Resources and Energy Minister Gwede Mantashe on January 13 and not Table 5 of the IRP2019. “The correction seeks to explain that the request for the determination had not originated from the IRP2019 as indicated but from an Eskom application to the Minister in terms of Section 10 (2)(g) of the Electricity Regulation Act (ERA),” Nersa told Engineering News in response to an enquiry, adding that it had mistakenly linked the determination to Table 5 of the IRP2019. The regulator noted that Section 10(2)(g) of the ERA required every application for a generation licence to include “evidence of compliance with any Integrated Resource Plan applicable at that point in time or provide reasons for any deviation for the approval of the Minister”. “Eskom had accordingly applied for a deviation from IRP2019 and in accordance with the prescripts of [the] ERA, Eskom is obliged to provide reasons for the need for such a deviation,” Nersa explained. Following the public comment process, the regulator would conduct its own analysis and “make a decision on whether to concur or not with the Ministerial Section 34 determination based on the legal prescripts and facts and evidence presented or collected by it”. Asked by Engineering News whether, given the late correction, Nersa felt the September 16 closing date for comment to be sufficient, the regulator responded: “Yes, since the change only applies to the origin of the capacity while everything else contained in the consultation paper remains the same.” The original consultation paper had an initial closing date for public comment of September 23, which was subsequently revised to 16:30 on September 16. The earlier deadline is also applicable to consultation papers related to two other Ministerial determinations for 14 791 MW of ‘Storage’, ‘PV’ and ‘Wind’, for the years 2024 to 2030 and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill’, for the years 2023 and 2024. The deadline for the renewables determination was shifted earlier to accommodate a doubling of Bid Window Six (BW 6) of the Renewable Energy Independent Power Producer Procurement Programme to 5 200 MW, for which a September 22 bid submission date was set. However, the National Energy Crisis Committee announced on September 11 that the BW 6 request for proposals (RFP) would be reduced to 4 200 MW, given that the Nersa still needed to concur with a Ministerial determination opening the way for the procurement of more solar photovoltaic (PV) capacity. “Rather than delay this RFP for all requests to be approved, government opted to issue the current RFP for 4 200 MW as opposed to delaying the entire Bid Window. “A further announcement regarding the remaining 1 000 MW of solar PV will be made following the conclusion of the Nersa process regarding the concurrence of the new determination,” the commit...
JSE-listed Metair Investments and its subsidiary, Hesto Harnesses, along with President Cyril Ramaphosa, on September 13 officially launched the new Hesto vehicle wiring harness manufacturing facility in KwaDukuza, KwaZulu-Natal. The new 35 000 m2 Hesto facility is one of five capital investment projects which resulted in a commitment of over R1.4-billion by Metair to support the expansion and localisation of the new Ford Ranger, through automotive component contracts. In partnership with global automotive parts supplier Yazaki Corporation, Hesto employs manufacturing skills and processes to produce wiring harnesses and instrument clusters for supply to South Africa-based, automotive original-equipment manufacturers (OEMs) Toyota South Africa Motors, Isuzu, Nissan, and recently added, Ford Motor Company of Southern Africa (FMCSA). The new facility will produce wiring harnesses for the latest Ford Ranger and Isuzu models, which will be sold locally and abroad. This follows a R15.8-billion investment by FMCSA in its Silverton assembly plant, in Pretoria, and major supplier factories, as announced in 2021, which will enable the company to support production of the next-generation Ford Ranger. Other subsidiaries involved in these projects include Unitrade 745, Automould, Lumotech and Supreme Springs, with a variety of wires, plastic and chrome plated parts, suspension parts as well as headlights and tail lights being produced. The investment commitment by Metair is an outcome of the South Africa Investment Conference held in 2020 and directly aligns with the objectives of the South African Automotive Master Plan to 2035 (SAAM2035), with the new facility posited to increase localisation, develop skills and create employment. Speaking at the launch, Ramaphosa said this investment showcased the long-term commitment by FMCSA and Metair to South Africa and underpinned their confidence in the country’s role in the global automotive value chain. Metair CEO Riaz Haffejee said the new facility took about nine months to complete, since the groundbreaking last year and that R804-million had been invested in the facility. A key benefit on the new facility that was lauded during the launch was the employment it has engendered, with 4 000 jobs created, more than doubling Hesto’s staff complement. Ramaphosa lauded this achievement, especially given that it includes the youth of the country, and further, boasts a 70% female representation. He also pointed out that the localisation targets would benefit the surrounding communities. Ramaphosa said such strides in localisation were aligned to aims outlined in the SAAM2035 and called for a continued drive in this area. Hesto MD William Hilditch pointed out that Hesto was the largest employer in the area and said it was proud of its role in empowering the greater iLembe district community. “The government support to both Ford and Isuzu unlocked this opportunity for Hesto to grow its operations, both in KwaDukuza and Tshwane, and contribute significantly to employment, economic growth, skills development and transformation. “Our drive to increase localisation across our business has enhanced this impact. Our country has the resources and skills available to localise more and we believe that, through closer collaboration across the value chain, there is much more that can be achieved on this front,” Hilditch commented. Haffejee echoed these sentiments, noting that the new facility was testament to the Metair group’s customer commitment and drive to support the sustainability of the automotive sector through enhanced localisation and global skills transfer. “I am extremely proud of what the team at Hesto has achieved and extend our appreciation to our partners and other stakeholders, specifically Ford and Yazaki, for making this project possible,” he outlined. Haffejee said Metair had driven several localisation projects in support of OEMs and the SAAM2035 agenda through its South Africa-based subsidi...
If South Africa does not start “to shift and change” to support the increased local production of new-energy vehicles (NEVs) in the next 18 months, the future of the industry is “absolutely under very serious threat”, says Naamsa | The Automotive Business Council CEO Mikel Mabasa. NEVs include hybrids, plug-in hybrids and battery electric vehicles. South Africa’s biggest new-vehicle export markets are the UK and Europe, with these centres set to ban internal combustion engine vehicle sales from 2030 onwards. Only two vehicle manufacturers out of the seven in South Africa currently produce hybrids and plug-in hybrids in South Africa. Speaking at the launch of the South African (SA) Auto Week in Johannesburg on Thursday, Mabasa noted that South Africa was currently the twenty-first-biggest vehicle manufacturer in the world, with the other 20 markets rapidly positioning themselves to take their up their place in the global NEV manufacturing chain. He said many of these markets had moved much faster than South Africa to develop policies around NEV sales and manufacturing. South Africa is still working towards finalising its NEV support policy. Mabasa said the main aim of the Auto Week was for the event to act as an engagement platform on NEVs for government, the local automotive industry, trade unions and all other key stakeholders, in order to “preserve the manufacturing base in the country”. “The main goal of the Auto Week is to accelerate and enhance our discussions around the future of the auto industry in South Africa.” The theme of the 2022 Auto Week is: ‘Reimagining the Future together | The Rise of the African Auto Industry: investing in new-energy vehicles, infrastructure, and people.’ The event will be hosted at the Kyalami convention centre in Johannesburg from 26 to 29 October. The Auto Week is endorsed by the International Organisation of Motor Vehicle Manufacturers, which will also host their general assembly during the occasion. The business-to-business event will include the Naamsa Accelerator Awards, a captains of industry dinner, a driving carnival and a three-day conference, with the latter acting as the anchor event. One of the “critical topics” on the conference agenda was how to “derisk” the local automotive industry’s logistics chain, noted Mabasa. This comes as Durban port, which is by far the industry’s main import and export hub, suffered from a number of stoppages owing to riots and floods over the last 18 months.
Engineering and contracting group Murray & Roberts (M&R) says its Southern Africa-focused business platform, which has shrunk materially and has been lossmaking for a number of years, is at the point of a “breakthrough”, underpinned by South African renewables and transmission activities that are starting to gain momentum. Known as the power, industrial and water platform, the unit is the smallest of the JSE-listed group’s three platforms by far and is also the only one leveraged entirely to project activity in M&R’s home market of South Africa and to the Southern Africa region. The platform’s order book of only R400-million is dwarfed by the R37.2-billion backlog of M&R’s energy, resources and infrastructure platform, which operates under the Australian Clough brand. It is also insignificant relative to the mining platform, which has a R21.9-billion order book. M&R has faced persistent questions about the platform’s ongoing relevance, particularly as it struggled in recent years to replenish its order book as construction activities at Eskom’s Medupi and Kusile coal projects tapered, and losses began mounting. However, CEO Henry Laas is optimistic that the platform, which reported a R155-million loss in 2022, could finally return to profitability during the 2023 financial year, particularly if projects associated with South Africa’s disrupted and delayed renewables procurement programme reach financial close. M&R has secured several contracts related to Bid Window Five of the Renewable Energy Independent Power Producer Procurement Programme, which were initially scheduled to reach financial close in April, but which had the deadline postponed after preferred bidders experienced delays in receiving grid connection budget quotes from Eskom. Platform CEO Steve Harrison says there is an expectation that at least some of the 25 preferred bidders will reach financial close during September and reports that the company has already started with early works for three wind farms and at a substation linked to the programme. The contracts are not yet reflected in the platform’s order book but are represented in what it describes as near orders worth R1.9-billion. Harrison reports that it is also receiving enquiries weekly with regards to distributed renewables projects, interest in which has increased significantly after President Cyril Ramaphosa lifted the licence-exemption cap. The cap was initially raised from 1 MW to 100 MW, but has since been lifted entirely. He also expects orders to begin to flow in light of the increasingly urgent need to strengthen the Eskom transmission grid, particularly in the Cape provinces where South Africa’s best wind and solar resources can be found. The platform is also eyeing a major public-private partnership in the area of water treatment, a market where significant pent-up demand has also developed. Overall, however, the group’s prospects are leveraged primarily to the fortunes of its mining and its energy, resources and infrastructure platforms, whose activities are focused mostly in markets outside of Southern Africa. In fact, only 17% of M&R’s R59.5-billion order book is located in Southern Africa, with all of the energy, resources and infrastructure platform’s R37-billion backlog located in international markets. In addition, most of its revenue and earnings will continue to arise from outside Southern Africa. In 2022, the group’s revenue increased to R29.9-billion, from R21.9-billion, and Laas said it would continue to rise and that he expected revenue to increase to about R40-billion. Nevertheless, Laas described the investments in developing utility scale renewables as an opportunity in South Africa “which we haven't had for a long period of time”.
Electricity utility Eskom told lawmakers on Wednesday that the risk of load-shedding remained high for the upcoming summer season, while confirming that there had already been 91 days of load-shedding during 2022. Eskom’s summer ‘base case’ is premised on there being 13 000 MW of onging unplanned breakdowns in addition to any planned maintenance, which rises substantially in the lower-demand summer months. Under that base scenario, the model shows that there will be 22 days of Stage 1 load-shedding for the period from September to the end of March. The monthly cost of generating electricity using the diesel-fuelled open-cycle gas turbines (OCGTs) to cover for the underperforming coal fleet will range from R517-million to R2-billion over the period. The risk of rotational cuts rises substantially, however, when stress-tested using unplanned breakdown scenarios of 14 500 MW and 16 000 MW respectively – thresholds that were breached during the winter period, particularly during an illegal strike at some coal stations in June and July. Under the 16 000 MW scenario, the Eskom outlook indicates that Stage 3 rotational cuts could have to be implemented on most days between September and March. In addition, monthly diesel costs could theoretically surge to between R3.9-billion and R8.9-billion. However, Eskom system operator GM Isabel Fick, who presented the outlook during a joint meeting of the portfolio committees on Public Enterprises and Mineral Resources and Energy, noted that the physical limitations of moving diesel to the OCGT stations meant that it was not possible to use more than R2.4-billion of diesel in a month. Notwithstanding recent difficulties in securing diesel, the load factor for Eskom’s OCGT plants for the year-to-date stood at 16.4%, massively above the 1% load factor at which the plants were initially designed to operate. The load factor of the private OCGT stations has been 9.9% and would have been higher had it not been for diesel-supply difficulties. There were also 24 wind generation curtailment events during those periods of high wind availability and low night-time demand. Fick said that all reliability maintenance required in the 12-month planning period had been accommodated in the plan, which she described as “tight”. “Any significant outage slips will have a knock-on effect that will influence the plan from that point forward.” She also stressed that the plan did not cater for difficulties that could arise as a result of industrial action or protest action. In June and July, Eskom instituted Stage 6 load-shedding for the first time since 2019 partly as a result of an illegal strike, which Eskom estimated at the time to have added two stages of load-shedding. Fick also stress the uncertainty of the plan, with Eskom having operated above worst-case scenario levels for 42.5% of the time during winter. During the period, unplanned outages over the evening peak averaged 14 864 MW. Eskom told lawmakers that the load-shedding risk could be “greatly reduced” over the coming 36 months if all the initiatives announced by President Cyril Ramaphosa as part of the Energy Action Plan were implemented. The plan includes actions aimed at improving the performance of Eskom’s coal fleet, including the new-build power stations, as well as initiatives to introduce new private generation and reduce demand. Fick said that some 3 514 MW of additional capacity could be injected over the coming six month as a result of plant performance improvement (1 814 MW) and the introduction of new generation (1 700 MW), including the commissioning of units at the Kusile power station. Over a 36-month period, more than 8 000 MW could be added from a combination of new build, Just Energy Transition (JET) projects, plant performance improvements and demand response. CEO André de Ruyter said that repowering activities at decommissioned coal stations, together with the Eskom land-release programme were designed to facilitate the introducti...
South Africa’s Transnet and China’s CRRC E-Loco announced on Wednesday that an in-principle agreement had been reach “towards the resolution of all current legal disputes between the two companies, to enable support to enhance Transnet Freight Rail’s (TFR’s) ability to serve customer demand on an urgent basis”. In a short statement, the two companies said that the next steps would be to finalise a definitive settlement agreement and complete the resolution of the current legal disputes. Moves towards a settlement follow a high-level meeting between the leadership of the two organisations, with the Transnet delegation having been led by CEO Portia Derby. The announcement also follows Transnet’s launching, in mid-August, of a High Court application to seek an order compelling CRRC E-Loco to release spare parts and components required to return 120 locomotives to service. Transnet said the parts and components had been imported to service and maintain the 95 20E and 100 21E locomotives acquired from CRRC in 2012 and 2014 respectively. Access to the spare parts and components, the utility added, would allow it to bring back to service 53 Class 20E and 67 Class 21E locomotives, which have been standing idle as a result of the inability to access the required spares and components. The standoff with CRRC arose following Transnet’s 2019 decision to halt the so-called 10-64 contract, for 465 diesel and 599 electric locomotives, in which CRRC participated along with three other original equipment manufacturers. Transnet deemed the contracts, which featured during proceedings at the State Capture commission, to be “irregular and illegal”. The cancellation of the contracts has left TFR with a locomotive shortfall, which Transnet aims to address through the issuance of a new tender later this year. It has been amplified, however, by CRRC’s refusal to provide Transnet with the spares required to maintain those locomotives already supplied to the utility. Several TFR customers have expressed dismay at the poor performance of the rail business over the past few years, owing to a shortage of locomotives, as well as ongoing theft across the rail network, with TFR having lost a total of 1 500 km of overhead copper wire to theft in 2021/22.
Motus has “a big focus” on growing its aftermarket business over the next two years, says CEO Osman Arbee. Speaking at the company’s annual results presentation in Johannesburg on Wednesday, he noted that the internal combustion engine (ICE) aftermarket still had “a lot of road to run”, despite the global move to electric vehicles (EVs). The aftermarket business, in general, is also cash generative, asset-light once purchased, and not dependent on the sale of new vehicles. Motus is active in the UK, Australian and South African vehicle retail, rental, import and aftermarket arenas. Arbee noted that the changeover from ICE vehicles to EVs “won’t happen tomorrow”, especially as current ICE fleets would continue to run – requiring parts to do so. South Africa has an ICE fleet of 12-million vehicles, the UK 35-million, and Australia 20-million. “It is a big market still,” said Arbee. He added that Motus expected the global supply of new vehicles to stabilise towards the middle of next year (calendar year), with the group’s South African importers – Hyundai, Renault, Kia and Mitsubishi – to finally have more stock available to customers. Vehicle supply continues to be under pressure owing to a shortage of semi-conductors, as well as the impact of the war in the Ukraine. Arbee also noted that the vehicle rental business was expected to stage a strong comeback towards Christmas and Easter, as the tourism sector started to stabilise after the worst of the Covid-19 pandemic. Motus anticipated a 20 000-unit market boost from the rental sector in the next 12 months. Arbee said the group’s own rental business was starting to return to normal, with its fleet at around 17 000 cars, up from 8 000 during the peak of Covid-19. He expected a swing back to 25 000 units as the ultimate fleet-size, roughly 2 000 units short of pre-Covid numbers. As for the used-car market, Arbee said the used-car price bubble had started to burst in July and August, with values now normalising following hefty hikes during the Covid-19 peak. Motus saw a 17% drop in used-car sales from the 2021 financial year to the 2022 financial year, largely driven by muted flow-through from the rental car sector. New-vehicle sales were up 13%. Motus’ other numbers for the financial year ended June 30 were equally healthy, with revenue up 5%, to R92-billion, compared with the previous financial year, and operating profit up 31%, to R5-billion. The group attributed the increase in operating profit to the recovery in the automotive and car rental sectors, coupled with increased margins owing to inventory shortages and disciplined cost management.
The KwaZulu-Natal floods, along with the associated disruption in the movement of automotive components and vehicles via the Durban port, as well as the ongoing global semiconductor shortage, have all taken a significant toll on South Africa’s second-quarter new-vehicle export and production numbers. The April floods shut down Toyota South Africa Motors’ (TSAM’s) plant in Durban until its full reopening in August. The Japanese car maker is the market leader in South Africa, with around one in every four vehicles sold domestically a Toyota. TSAM is also a significant exporter. According to Naamsa | The Automotive Business Council’s newest business review, South African vehicle production dropped by 17% in the second quarter of this year compared with the same period last year. Light-commercial vehicle (LCV) production was especially hard-hit, as Toyota also had to halt production of South Africa’s best-selling vehicle, the Hilux bakkie, at its Prospecton plant. This saw overall domestic LCV production drop by 37.3%, to 41 109 units, in the second quarter of this year compared with the same quarter last year. Naamsa also notes that overall second quarter new-vehicle exports from South Africa dropped by 15.3% (77 340 units) compared with the corresponding quarter last year (91 349 units). This decline was again attributed to the KwaZulu-Natal floods, as well as “the ongoing repercussions” of Russia’s invasion of the Ukraine, hampering export volumes to key markets such as Europe. Some good news is that second-quarter new-vehicle sales increased by 4.7%. However, this number was down 13.8% on the first quarter of this year. New-energy vehicle sales also declined by 47.3%, from 1 401 units in the first quarter, to 738 units in the second quarter.
The Tyre Importers Association of South Africa (TIASA) has applied to court to compel the International Trade Administration Commission of South Africa (Itac) and the South African Tyre Manufacturers Conference (SATMC) to disclose what it says is “critical information that is being withheld” regarding SATMC’s application for the implementation of anti-dumping duties on imported tyres. The aim is also to challenge the manner in which Itac is conducting the investigation. SATMC, which includes Continental, Bridgestone, Goodyear and Sumitomo, has applied to Itac for the implementation of additional duties of between 8% and 69% on passenger, taxi, bus and truck vehicle tyres imported from China. Current import duties levied on tyres range from 25% to 30%. “We are operating in the dark when it comes to this application for additional duties, and the stakes are high for South Africa,” says TIASA chairperson Charl de Villiers. “If ITAC decides to impose the maximum duty percentage requested by SATMC, we could see price increases range from 41% for taxi tyres, 38% to 40% for passenger tyres and an average of 17% for truck and bus tyres. “These increases will have dire consequences for commuters, the transport sector, and consumers, who are struggling with climbing inflation.” TIASA adds that domestic manufacturers are unable to produce the full range of tyres required locally, which sees them import a number of tyres to meet demand. “SATMC concedes that, in addition to manufacturing tyres locally, it also imports tyres, but refuses to disclose what they import, from where, and for what reason,” notes the importers association. “This information is critical, as causality is a foundational principle of an anti-dumping case,” notes XA Global Trade Advisors CEO Donald MacKay. “In other words, it’s necessary to prove that any injury to the local industry must have been caused by the dumping, and not by something else. If SATMC members are importing a significant volume of tyres themselves, they would be inflicting their own injury, which would need to be offset for any injury they claim. “They would, therefore, need to demonstrate a compelling reason for the imports.” “This is not confidential information, and it is material to their import duty application and their rationale,” says MacKay. “For example, we know Continental and Goodyear import 100% of truck and bus tyres, yet these domestic producers are importing these tyres instead of purchasing them from the other domestic producers who do manufacture them locally. Why? “SATMC has refused to share any of this information with TIASA, and Itac has accepted this.” Itac Process ‘Flawed’ According to TIASA Itac received “an enormous response” to its investigation, from more than 60 companies, but decided to only review a small sample of submissions as the basis for its final decision. Furthermore, there was no consultation in respect of the sampling, with Itac refusing to allow TIASA to make any comment or input on the sampling methodology, notes the association. “With a complex product like tyres, where the local market sells over 3 000 different models, it is almost impossible to select a truly representative sample,” says Mackay. “To base a duty decision on such a flawed process is deeply concerning.” TIASA says it is, therefore, asking the court to direct Itac to remedy its sampling, to provide TIASA with SATMC’s import data, as well as the reasons for their imports, and to allow TIASA sufficient time to make a submission to Itac before it takes any decision on the imposition of duties. “If the current process is not corrected, it’s likely that Itac will impose provisional duties without SATMC’s import information, or indeed TIASA’s submissions which have, to date, been excluded from consideration by Itac,” notes De Villiers. “This will be a clear impingement on the rights of affected parties to meaningfully participate in this process.” SATMC Responds SATMC says it “has received TIA...
South Africa’s automotive industry continued its recovery from Covid-19 in the second quarter of the year, with vehicle sales reaching levels last seen before the pandemic. A growing number of those deals are for new cars, with the number of new-passenger finance deals increasing 34% year-on-year, compared with 5.4% for used-passenger vehicles, notes the latest TransUnion South Africa Vehicle Pricing Index (VPI) report. The index also shows that new-car prices still lag inflation, while used cars continue to become relatively more expensive. The latest TransUnion VPI for new vehicles moved from 6% in the second quarter of last year, to 3.9% in the second quarter of this year, with the used-vehicle index soaring from 4.9% to 8.3% in the same period. In contrast, South Africa’s overall inflation rate was 5.9% at the start of the second quarter of this year. The VPI measures the relationship between the increase in vehicle pricing for new and used vehicles from a basket of passenger vehicles, which incorporates the 15 top volume brands. The index is created using vehicle-sales data from across the industry. As a result of the new pricing trends, the ratio of used-to-new vehicles sold shifted significantly in the past quarter, notes TransUnion. A year ago, 2.67 used vehicles were sold for every new vehicle. In the second quarter of this year, however, this declined to 2.1. Within the used-vehicle market, 27% of cars sold were less than two years old, with this number continuing to decrease as the supply of quality used vehicles remains under pressure. Demo models financed made up 4% of used financed deals. TransUnion Africa auto information solutions VP Kriben Reddy says the recent growth numbers have to be taken in context, and warns that lagging indicators like rising interest rates could still impact sales going forward. “The market is heading in the right direction, but we have to remember that a year ago we were in the midst of level four lockdowns and civil unrest, which depressed the market severely. “We’re also almost certainly going to see the impact of rising inflation and interest rates at a time when household incomes are not growing at the same levels.” Consumer Choices According to the TransUnion VPI report, consumer buying patterns showed that one in three (33%) of new and used financed vehicles were hatchbacks, while one in five (20%) were sports-utility vehicles. Sedans retained their market share, although this was mainly in the used-vehicle market, where supply remains constrained. Consumers between the ages of 26 and 40 bought nearly half of all vehicles financed, of which most were used. The percentage of cars (new and used) being financed below R200 000; between R200 000 to R300 000; and over-R300 000 has had year-on-year movement in the second quarter of 2022, with a clear move from under-R200 000 to the over-R200 000 bracket. “Looking ahead, the big challenge for the industry is to transform itself to drive the transition to electric vehicles (EVs) as fuel prices continue their upward trend and the need to reduce emissions becomes more pressing,” says Reddy. “Our local production facilities will have to invest and tool up to manufacture more EVs to meet demand, and dealers should be driving the uptake of EVs by educating consumers.”
In a letter issued by President Cyril Ramaphosa on August 29, he said his administration's efforts to root out corruption were starting to yield results, with the Hawks reporting that, between the 2019 and 2022 financial years, 554 suspects had been arrested for corruption, 142 of whom were convicted. The latest of those involved in wholesale corruption to be brought to book are those allegedly involved in State capture through the plundering of State-owned Transnet. Asset management firm Trillian founder and financial institution Regiments shareholder Eric Wood, along with Albatime director Kuben Moodley appeared at the Palm Ridge court today, in Ekurhuleni, alongside former Transnet CEO Brian Molefe and CFO Anoj Singh, in connection with alleged fraud and corruption perpetrated seven years ago. The disgraced former Transnet executives were arrested early in the morning along with former Regiments executive director Niven Pillay and former Regiments CEO Litha Nyhonyha. These suspects joined Moodley, Wood and former Transnet acting CFO Garry Pita and former Transnet treasurer Phetolo Ramosebudi, as well as Trillian co-founder Daniel Roy, in the dock on charges of fraud and corruption relating to Transnet’s procurement of 1 064 freight locomotives – a deal that cost South African taxpayers R189.2-million. Nonprofit organisation Organisation Undoing Tax Abuse (Outa) has welcomed the arrests, stating that Molefe and Singh had much to account for when it comes to the billions of rands South Africa lost as a result of State capture. “They were not only involved in State capture at Transnet, but also later at Eskom, the State’s crippled power utility. We are also happy to see that Outa’s referrals and submissions on State capture to the law-enforcement agencies contributes to the arrest of State capturers,” Outa CEO Wayne Duvenage said. Solidarity has also welcomed the arrests after Solidarity filed criminal charges against Molefe and Singh at the Brooklyn Police Station, in Pretoria, earlier this year. Solidarity said that, although these arrests are positive, justice had already been delayed for far too long, and that South African citizens deserved immediate action from the South African Police Service and other structures regarding other alleged State capturers. “The absolute injustice of years of corruption and theft cannot continue any longer because of endless delays on the part of our criminal justice system . . . Continuous pressure must be exerted on our security services to do their job, and any further dragging of feet will not be tolerated. “State capturers have robbed workers of their jobs and future and have stolen taxpayers’ hard-earned money. We cannot allow it," Solidarity CEO Dr Dirk Hermann said. Solidarity contended that the damage caused by corruption was not limited to financial loss as it has also destroyed the State’s ability to provide essential services, while also breeding distrust among citizens towards the South African justice system. “In order to purchase the locomotives, Transnet secured a $2.5-billion loan facility from the China Development Bank, the so-called CDB loan,” Outa State capture expert Rudie Heyneke explained. The 2015 loan, of which $1.5-billion was drawn down, formed part of the financing for the purchase of the locomotives, of which some were purchased from the China State-owned locomotive manufacturer CRRC . The balance of $1-billion was financed through a so-called “club loan” in South Africa. Investment banking firm JP Morgan was replaced by Trillian as the lead arranger and, for that, an additional R93-million was paid by Transnet to Trillian. “The original accused appeared previously for irregularities on this transaction. The National Prosecuting Authority (NPA) has now also charged Molefe, Singh, Pillay and Nyhonyha for irregularities regarding the CDB loan,” Heyneke explained. In August 2020, Outa submitted a detailed referral to the Investigating Directorate on how the Tra...
One year after taking office, Minister Senzo Mchunu says the Department of Water and Sanitation (DWS) is now stronger and fully functional; however, there is still a long way to go and more work to be done. Mchunu, reflecting on the past year since assuming office, and taking stock of the achievements, challenges and the future work of DWS, noted that it was “no easy undertaking”, with many hurdles and bottlenecks to realise the milestones made to date. “We still have a long way to go, but understand us to be ready for the task and dedicated to serving the citizens of South Africa,” he said during a media briefing on Friday, highlighting that patience is required, as the department does not have an abundance of resources to resolve the challenges as rapidly as it would like to. One of the critical tasks prioritised over the past year was the stabilisation of the DWS, starting with the filling of key posts within the department, including the appointment of Dr Sean Phillips as director-general, starting on January 3. “We set about ensuring that all senior posts are filled, namely that of CFO, DDG: Corporate Services, DDG: Water Services Management DDG: Regulation, Compliance and Enforcement,” he said, adding that, when making the appointments, a stern decision was taken to employ people who are fit-for-purpose with the necessary qualifications, skills and capabilities. “Strengthening the department by closing all vacancies at the highest levels ensures accountability and responsibility.” The department is stronger and fully functional with all senior posts filled, and is working on several delivery mechanisms. During the past year, the DWS prioritised its two main streams, namely water resource management and water services management, implementing several projects throughout South Africa, and in conjunction with neighbouring countries, to ensure water provision and water security. Priority has been on incomplete projects that must be completed as soon as possible; addressing incapacity in municipalities to deliver on water and sanitation services; communities with water distress; the storms in the KwaZulu-Natal and the drought in Gqeberha; mitigating a lack of resources; and old and dysfunctional infrastructure. “Based on this, it has become imperative that we explore many delivery mechanisms and increase our tempo.” One such mechanism is the reconfiguration and leveraging of the Water Boards for water and sanitation provision to communities, with limited differentiation between bulk and reticulation. A further mechanism being employed is the use of the department’s internal construction unit. “We are also working with the private sector, where traditionally it has been through tenders, but we are now working on upscaling partnerships with the private sector,” he said, citing examples of public-private partnership work done with the Lebalelo Water User Association, Ivanplats Mine and the Vaal Gamagara project. In line with the partnership approach, the DWS established a National Water Partnerships Programme, as well as a Water Partnerships Office in the Development Bank of Southern Africa. The National Water Partnerships Programme will run five programmes, namely nonrevenue water; management contract; wastewater treatment; water reuse; and seawater desalination.
The National Energy Regulator of South Africa (Nersa) has issued an updated invitation, with an earlier September 16 deadline, for written comments regarding its concurrence with new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity. Nersa’s original invitation set a closing date of September 23 for the receipt of public comments, which would have been a day after the bid submission deadline for the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme. Had that been the case, it would not have been possible for a new determination for solar photovoltaic (PV) to be published to allow BW6 to be doubled from 2 600 MW to 5 200 MW, as announced by President Cyril Ramaphosa on July 25, when the enlarged bid window was unveiled as part of a package of measures aimed at tackling intensifying load-shedding. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office had indicated that the size of BW6 would have to be reduced to 4 200 MW. Nersa released the updated invitation and comment deadline on Friday, August 26, shortly after Engineering News published an article highlighting the fact that the September 23 deadline was out of sync with government’s ambition to double next renewables round. Three proposed determinations have been delivered to Nersa by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act and cover the following capacities included in Table 5 of the 2019 edition of the Integrated Resource Plan (IPR 2019): 14 791 MW of ‘Storage’, ‘PV’ and ‘Wind’, for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel’, for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill’, for the years 2023 and 2024. Without the regulator’s concurrence, the determinations cannot be Gazetted and the new generation capacity outlined in the IRP 2019 cannot be legally procured. Prior to Nersa’s formal request for comment on the determination, IPP Office head Bernard Magoro indicated that the office was gearing up for the enlarged bid window and he expressed confidence that it and its transaction advisers had sufficient capacity to complete bid evaluations within two months of the bid submission date. He also confirmed that September 15 had been set as the last date for compulsory bid registration, including payment of the bid registration fee.
Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about how Bid Window (BW) 5 of the Renewable Energy Independent Power Producer Procurement Programme is progressing; the doubling of BW6 and the likely timeframes for the bidding round; and the possible risks of having such a large bidding round.
The National Energy Regulator of South Africa (Nersa) has invited public comment on it providing concurrence with new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity catered for under the 2019 edition of the Integrated Resource Plan (IRP 2019), which covers the period to 2030. However, the deadline set for the submission of comments is a day after the current bid submission deadline for the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme, which requires a new determination for solar photovoltaic (PV) to enlarge the round to 5 200 MW. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office has indicated that the size of BW6 may have to be reduced to 4 200 MW. The doubling of BW 6 from an initial 2 600 MW was one of the interventions announced by President Cyril Ramaphosa on July 25 to tackle intensifying load-shedding. Three proposed determinations have been delivered to Nersa by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act and cover the following capacities included in Table 5 of the IRP 2019: 14 791 MW of ‘Storage’, ‘PV’ and ‘Wind’, for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel’, for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill’, for the years 2023 and 2024. Without the regulator’s concurrence, the determinations cannot be Gazetted and the new generation capacity outlined in the IRP 2019 cannot be legally procured. Under the current timetable, the regulator’s concurrence will not be made in time for the September 22 bid submission deadline set for BW6 – the deadline was shifted from an initial closing date of August 11 to cater for the doubling of the round. Nersa has set a closing date of September 23 for the receipt of written comments on the determinations. Engineering News contacted the IPP Office for its response to the development and the office indicated that it was still awaiting governance approvals and that it would revert as soon as these had been received. Prior to Nersa’s formal request for comment on the determination, IPP Office head Bernard Magoro indicated that the office was gearing up for the enlarged bid window and he expressed confidence that it and its transaction advisers had sufficient capacity to complete bid evaluations within two months of the bid submission date. He also confirmed that September 15 had been set as the last date for compulsory bid registration, including payment of the bid registration fee. However, Magoro also pre-empted a possible delay to the finalisation of the final Ministerial determination saying: “If it's approved on time, it will allow us to add the additional 1 000 MW of PV. If not, the IPP Office will have to decide whether to delay the bid submission date again or proceed with 4 200 MW instead of 5 200 MW.”
Even though government paved the way for municipalities to generate or procure their own electricity from independent power producers (IPPs) a little under two years ago, only 25% of them are equipped with either a basic or comprehensive small-scale embedded generation (SSEG) process, or are putting one in place. A further 25% of municipalities do not have the internal capacity to establish or manage these processes, but may come do so with some support, while the remaining 50% of municipalities are not in a state to handle any additional responsibility, owing to long-standing financial difficulty or mismanagement issues, Sustainable Energy Africa director Mark Borchers noted this week. He shared his insight on how large-scale embedded generation was being rolled out across local government during a webinar hosted by the Association of Municipal Electricity Utilities and the South African Institute of Electrical Engineers on August 23. He explained that while SSEG had been happening at municipalities for quite some time, and many had managed this reasonably well, bringing large energy users into the network was a “whole new movement” that needed understanding of legalities and required proper processes to be in place. Among the local government authorities that have successfully pulled off SSEG and larger-scale embedded generation is the City of Ekurhuleni, in Gauteng. The city’s chief engineer, Hendrik Raedeni, said the metro had an embedded generation integration framework in place, as well as an IPP programme. Ekurhuleni comprises nine towns, each with an independent distribution grid. Through the city’s IPP programme, which was launched in 2017, 47 IPPs have been appointed through a request for proposals process to supply electricity in the metro. The city has signed 90% of the required power purchase agreements (PPA) with these IPPs, with three IPPs busy with grid integration studies at the moment and ten having letters of intent to fund from investors in place. The estimated start of construction for some of the IPPs is December this year and January next year, while the first generation units from these projects will be online in 12 months’ time. The city only accepted embedded IPPs with capacities of 5 MW and above, with no wheeling involved. Ekurhuleni does have a wheeling framework in place nonetheless, and believes it can present a new revenue stream opportunity for itself and other local government authorities. The 47 IPPs have total proposed capacity of 683 MW, of which 298 MW will comprise solar, 139 MW waste-to-energy and 195 MW gas. Raedeni said Ekurhuleni hoped to save just under R14-billion through this programme, which would have otherwise been paid to Eskom over 20 years. The programme helped to ensure more affordable energy for customers, avoided power losses as no long transmission lines were involved, created jobs and mitigated against climate change. To pull off a successful energy procurement programme, Raedeni suggested municipalities start with small but fundable projects, and ensure good credit ratings, since they aid PPA fundability, as does good payment records to Eskom. “Investors want risk to be shared and need to be assured government will pay its dues,” he stressed. Council for Scientific and Industrial Research (CSIR) principal researcher Warrick Pierce, meanwhile, emphasised that the electricity market was evolving and that municipalities’ business models and planning processes should do the same. He highlighted that they could no longer remain dependent on one source of supply, nor remain a traditional bulk reseller of electricity. The CSIR has witnessed an evolution to more decentralised energy operations, with more regional and local municipal energy master plans arising. Pierce said Municipal Energy Master Plans (MEMPs) proved useful in balancing supply and demand, and were considered least cost options, if done well and based on long-term planning. The CSIR has, in collaboration with...
The Organisation for Economic Cooperation and Development (OECD) is forecasting that South Africa’s growth will slow to 1.8% in 2022 and dip to 1.3% in 2023 and says that a swift implementation of market reforms, including those needed to address the electricity crisis and tackle infrastructure backlogs, is required to reduce uncertainty and boost growth. During the virtual launch of the ‘OECD Economic Surveys: South Africa 2022’ report on Thursday, acting chief economist Álvaro Pereira described the country’s electricity shortage as its “most pressing internal bottleneck to growth”. “This is why it's so important to hasten reforms in the energy sector in the near future,” he said, describing security of supply as crucial for investor confidence and for reversing weak investment. The report notes the surge in load-shedding hours since 2018 and also highlights the country’s slow progress in procuring new generation from independent power producers since the resumption, following a seven-year hiatus, of procurement activities in 2021. It welcomes recent amendments allowing distributed renewable generation projects to proceed without licensing but says steps should be taken to ensure that registration processes do not delay implementation. “Admitting private providers of renewable energy would quickly increase electricity availability,” the reports states, adding that it would also help lower South Africa’s carbon emissions, which are particularly high when measured per unit of gross domestic product (GDP). Besides electricity, the report also underlines the need for increased infrastructure investment to lift productivity, which has fallen over the last decade in sync with declining investment. Reliable infrastructure provides the basic foundation for productive economies, the report states. “Productivity growth is also held back by an insufficient provision of high-quality infrastructure, from roads and railways to telecommunications. “Improving the effectiveness of public investment, in part through strengthening the selection process for large infrastructure projects, would be a step towards restoring productivity growth.” Public and private sector investment, which amounted to 17.9% of GDP in 2019, is far from the National Development Plan target of 30% of GDP, the report points out. The financing of road infrastructure, the OECD states, is insufficient, adding that the lack of systemic and regular maintenance is accelerating road deterioration. In addition, the lack of competition in port services has contributed to lower investment, higher tariffs and a diversion of sea traffic. Low-quality and unequal telecommunication infrastructure, meanwhile, is slowing digitalisation of the economy. The OECD recommends that the funding of road infrastructure from the general government budget be augmented based on cost-benefit analyses and that transfers of maintenance funds to local authorities be made conditional on preventive maintenance implemented. More controversially, it proposes that prepayment and mobile payment systems be developed for e-tolls, the payment for which it says should be enforced. In the area of digital infrastructure, the report recommends that new frequencies be allocated in a fair manner and that the sector regulators and the Competition Commission be aligned to strengthen competition policies and their enforcement. Besides infrastructure, the OECD believes higher levels of productivity can be fostered by upgrading basic skills through increasing the quality of primary and secondary schooling, as well as by further developing vocational training and adult learning. The report also suggests that the current limited access to higher education might be remedied through a move to a formula-based funding for universities, taking the number of students, their socioeconomic background, and outcomes into account in the formula. South Africa’s Deputy Finance Minister Dr David Masondo said the report assisted in hig...
A homegrown expandable minigrid solution that researchers at the University of the Witwatersrand (Wits) have been developing, testing and refining for several years has now been fully commercialised to be marketed and sold locally and throughout Africa as the Peco Powerbrick. The innovation is based on the pioneering work of academics and students at the university’s School of Electrical and Information Engineering who, under the direction of Professor Willie Cronje, have been working on an expandable and affordable offgrid solution for low-income African households since 2014. The technology is still being assembled at a Wits facility, but is being commercialised through Peco Power, a joint venture comprising impact investment group Umbono Natural Resources, Wits and Cronje and his team of postgraduates. Peco Power CEO Dorian Wrigley tells Engineering News that the target market remains those low-income households without access to electricity. However, the commercial solution has been adapted for possible use by grid-connected households seeking a cost-effective back-up during load-shedding. Therefore, the Peco Powerbrick that will be sold at various retail sites across South Africa can be charged from a regular power socket, whereas the original concept was premised on the energy arising from a small solar panel only. In addition, the original DC microgrid concept has been redesigned and coupled with an off-the-shelf AC inverter, to make it a true plug-and-play solution that can immediately incorporate 220 V appliances, such as fridges, computers, Wifi routers and televisions. The commercial unit incorporates a built-in lithium-iron-phosphate battery, which makes it relatively light weight, and is guaranteed to provide a minimum of 2 000 cycles, the equivalent of six to seven years of daily use before any cell replacement is required. Wrigley believes the solution could, therefore, also find a market among those camping or 4x4 enthusiasts seeking a light-weight off-grid solution for when travelling to sites with no or limited grid connectivity. The main differentiator of the Peco Powerbrick, however, lies in its patented mini-grid technology, which makes the system scalable. “Inside every single PowerBrick is a mini-grid,” Cronje explains. “When I plug two PowerBricks together that expands to form one larger mini-grid.” This modular ‘Lego-block-type’ concept represents a departure from current off-grid power offerings, which are linear in nature. The result is a power grid that is able to accommodate multiple loads by scaling up the power and battery components in line with a household’s energy needs and/or financial means. “The mini-grid is scalable from 70 W to 500 W of continuous power, or 2 500 W of peak power and the battery storage is expandable from 150 Wh to 2 500 Wh,” Wrigley says. Another key driver has been affordability, with the entry-level 70 W/150Wh system expected to retail for R3 799 and the top-of-the-range 200 W/600 Wh system expected to cost R7 999. Wrigley anticipates that the initial sales impetus is likely to arise from South African households seeking a system that is able to keep cell phones charged, Wifi routers on, and computers powered for two- to three-hour load-shedding stints. However, he stresses that the original vision of providing an affordable solution for the 100-million African households without access to electricity remains firmly intact. To service that market, Peco Power is aiming to partner with nongovernmental organisations (NGOs) or faith-based communities in deploying the system through a “community franchise model”, whereby the franchisee rents the system out to communities that are unable to afford the upfront cost of the system. “For approximatel R350 000 you can set up a franchise with 100 Peco Powerbricks. “If those units are then rented out at R100 a month, the franchisee would generate a R10 000 monthly income, while 100 households would have access to affordable power...
Members of the South African Iron and Steel Institute (SAISI) have come out in full support of the proposed six-month ban on the export of scrap metal from South Africa. SAISI members include ArcelorMittal South Africa, Cape Gate, Columbus Stainless, Force Steel, Scaw Metals, SA Steel Mills and Unica Iron and Steel, while Safal Steel and Grinding Media are affiliated members. The temporary ban has been proposed by the Department of Trade, Industry and Competition as part of a broader three-phase intervention to tackle high levels of metals theft, which is estimated to be costing the economy about R187-billion yearly. The interventions are currently the subject of a public consultation process, during which there have been some warnings that the ban could negatively impact legitimate recyclers and informal waste collectors, as the criminal syndicates involved in copper cable theft are unlikely to heed the ban. Besides the export ban, the other components of the proposed first phase of the intervention include: an export permit system for semi-finished metal products to facilitate easier policing; the creation of an import permit system for furnaces and various other scrap transformation machines; possibly limiting export permits for semi-finished metal products to businesses that manufacture semi-finished products, and establishing a central repository to monitor metal theft from critical public infrastructure. During the second and third phases various regulatory amendments may be introduced to enhance the registration, reporting and enforcement regime for metal trading including limiting the number of ports that can be used to export scrap and the imposition of prohibition of cash-for-scrap transactions. Trade, Industry and Competition Minister Ebrahim Patel told lawmakers this week the temporary prohibition on exports of waste and scrap metal, and the creation of a permit system for the export of semi-finished metal, should lead to a material reduction in the theft of metal from the country's infrastructure as it will “eliminate or reduce one of the avenues for monetising stolen metal, that is its exportation”. Patel also denied that the export prohibition would have a significant negative impact on legitimate local upstream collectors and recyclers as the volumes of waste and scrap that are currently legally exported can be sold locally. “The temporary, two-month, prohibition on the export of scrap in 2020 did not cause serious harm.” SAISI concurs, arguing that the proposed intervention should “lead to a material reduction in the theft of metal from the country’s infrastructure”. “These interventions will divert significant volumes of scrap metal to the local market, leading to lower prices, which will likely disincentivise theft and vandalism of infrastructure,” SAISI secretary-general Charles Dednam argues. SAISI believe the steel industry will benefit mainly from a reduction in theft and vandalism-induced service delivery interruptions, particularly as these relate to rail and electricity services. In addition, it will benefit from more domestic supply at better prices for mini-mills, foundries and metal processors. “Increasing scrap intake is essential to the cost competitiveness of the local primary steel producers – large and small – and is critical to the industry’s environmental and carbon aspirations,” Dednam says.
The National Energy Regulator of South Africa (Nersa) has published a list of the most recent 35 renewables projects – including a 100 MW solar photovoltaic (PV) project in the Northern Cape – to be registered following a recent market reform allowing for large-scale distributed generation projects to proceed without a licence. The projects were officially registered during the August 22 meeting of the Nersa regulator executive committee, which also registered the first two 100 MW solar PV projects in May and subsequently registered 16 distributed-generation projects in June, with a combined capacity of 211 MW. Nersa expects to consider the next batch of registrations during a meeting scheduled for September 5. The August registrations increased to eight the number of projects that have now been registered with a capacity greater then 10 MW and Nersa says the total installed capacity of such projects currently stands at 599.6 MW. As with previous registrations, most projects are small, but the list includes some notable large projects, including: the 100 MW Postmasburg Solar PV Energy Facility 2, in the Northern Cape; the 75 MW Buffels Solar project, in the North West; and the 19.9 MW Mzimkhulu Hydroelectric project, in KwaZulu-Natal. The other registrations confirmed by Nersa on August 22, were: two 0.330 MW apiece Bamco Koelkamers solar PV projects, in the Western Cape; the 0.440 MW Capital Propfund 2 solar PV, in Gauteng; the 0.150 MW Capital Propfund 3 solar PV project, in Gauteng; the 0.150 MW EC Maskell Boerdery solar PV, in the Eastern Cape; the 0.150 MW Eversolar solar PV project, in Mpumalanga; the 0.315 MW Jowilita Farms solar PV project, in the Northern Cape; the 0.325 MW Just Refrigeration solar PV project, in Mpumalanga; the 0.550 MW Martin and Martin solar PV project, in the Western Cape; the 0.110 MW and 0.220 MW apiece solar PV projects registered by Number Two Piggeries, in the Eastern Cape; four solar PV projects in the Northern Cape of 0.331 MW, 0.662 MW, 0.822 MW and 0.910 MW apiece registered by Paul de Villiers; the 0.112 MW Pietlam solar PV project in the Eastern Cape; solar PV projects of 0.450 MW and a 0.220 MW apiece registered by Redefine Properties in KwaZulu-Natal and Gauteng respectively; a 0.200 MW solar PV project registered by RZT Zelpy 4600, in KwaZulu-Natal; the 0.496 MW SolarAfrica Energy sola PV project, in the North West; the 0.133 MW Suncrest Estate solar PV project, in the Western Cape; the 0.150 MW Swartrandsdam solar PV project, in the Free State; the 0.594 MW and 0.273 MW solar PV projects registered by Terradew Three, in the Eastern Cape and KwaZulu-Natal respectively; the 0.300 MW Unlocked 18 solar PV project, in Gauteng; the 0.220 Widney Transport Components solar PV project, in Gauteng; the 0.233 MW Winterton Shopping Complex solar PV project, in KwaZulu-Natal; the 1.100 MW Zandspruit Value Centre Solar PV project, in Gauteng; the 2.600 MW hydro project registered by MBB Consulting Services, in Mpumalanga; and three 0.152 MW apiece solar PV projects, two in KwaZulu-Natal and one in Gauteng, registered by Thebe Solar Energy. The number of project registrations is expected to continue to climb following President Cyril Ramaphosa’s July 25 announcement of the lifting of the licence-exemption cap on distributed generation projects as part of a series of interventions to tackle intensifying load-shedding. Prior to the announcement a 100 MW cap had been in place, following a June 2021 reform that raised the threshold from 1 MW to 100 MW.
The proposed policy to ban the export of waste, scrap and semifinished metal products for a period of six months is necessary to immediately reduce the ability of criminal syndicates to monetise stolen metals, while registration systems are put in place to hamper their ability to mask stolen metals within legitimate metal trade, Trade, Industry and Competition Minister Ebrahim Patel has said. During a presentation to the Parliamentary Portfolio Committee on Trade and Industry on August 23, he provided an overview of the inputs that were considered in the compilation of the proposed policy and answered committee members' questions about the costs and relevance of the policy. "The ban is temporary. In this period, the domestic market will provide some market for product. When the [regulatory and registration] system is fully developed, then such scrap that has been legitimately and properly obtained and can be explained can be exported," Patel assured committee members. The new policy regime is intended to challenge the criminal syndicates' ability to operate, sell and export stolen metal, he emphasised. The temporary prohibition is intended to assist with the creation of a permitting system to realise a material reduction in theft of metal from the country's infrastructure, as it will eliminate or reduce one of the avenues used for monetising stolen metal. By reducing demand, South Africa can reduce the incentive to steal metal, he said. "The intervention will divert significant volumes of scrap into the local market, which will then likely lead to lower scrap metal prices. In the local market, the supply will increase but demand will remain constant, leading to a chilling effect and disincentivise theft. "The export prohibition will not have a significant negative impact on legitimate local upstream collectors and recyclers, as the volumes of waste and scrap that are currently legally exported can be sold locally." Additionally, the enhanced regulation of domestic metal trading and enforcement will bolster the country's fight against metal theft because anyone found in possession of waste, scrap or semifinished metal products will be required to present a registration certificate. This will greatly reduce the ability to buy stolen goods and wash them into the value chain, Patel said. Theft of scrap metal, particularly copper cables, imposes costs on society far beyond the value of the material taken. For example, the economic damage of copper theft alone has been estimated at more than R46-billion a year. This was the finding of research commissioned by the Department of Trade, Industry and Competition (DTIC) and undertaken by independent research team from Genesis Analytics. "This regime is intended and designed to undermine criminal syndicates and networks that threaten South Africa's vital economic infrastructure while, simultaneously, limiting the extent to which the new arrangements impose costs on the metal value chain," he said. The proposed policy, which was gazetted on August 5 for public comment, follows many other measures to reduce the ability of criminal networks to monetise stolen metal, including export restrictions, the introduction of a price preference system for export, the introduction of an export tax and the use of legal provisions to provide limited policing powers to State-owned enterprise officials, among others, Patel highlighted. "These measures have been broadly successful in achieving their policy goals. However, the advice we have received from State-owned enterprises, the South African Police Service, research organisations and business organisations in drafting the policy are that these measures are insufficient to disrupt criminal syndicates and additional measures are required. "We have seen the extraordinary measures put in place by State-owned enterprises to address the security part of the challenge, including the use of drones, private security, more fencing and camera networks, but the...
Energy and chemicals group Sasol expects to invest the bulk of the R15-billion to R25-billion it is budgeting to facilitate a 30% reduction in its carbon emissions by 2030 between 2025 and 2027, having spent only modest capital on such projects to date. The expenditure forms part of the JSE-listed group’s yearly ‘maintain and transform’ capital budget, which is expected to rise to between R26-billion and R27-billion in its 2023 financial year. Sasol will invest between R500-million and R1-billion during the year on projects designed to improve its environmental performance ahead of a scale-up in such expenditure from 2025 onwards. The bulk of the ‘transform capital’ will be directed towards the introduction of process changes particularly at the group’s Secunda complex, which is regarded as one of the largest single-site emitters of carbon dioxide globally. These include technology changes allowing for the displacement of coal with gas, the possible briquetting of coal fines to reduce its use of mined coal and the ramping down of coal-fired boilers as it begins procuring renewable energy from independent power producers (IPPs). The company says it has agreed key terms with IPPs for more than 600 MW of wind and solar to be introduced before 2025 and is planning to procure 1 200 MW by 2030. CEO Fleetwood Grobler reports that Sasol is working on future gas supply options, including the possible integration of imported liquefied natural gas (LNG) through Maputo, in Mozambique. It has, however, been able to extend the gas supply “plateau” from Mozambique by two years to 2028, following infill well drilling. The prospect of a “gas cliff” has come into focus again recently after Sasol Gas announced, and later delayed, the implementation of a 96% hike in the price of pipeline gas from August 1. Had the increase been introduced, the price of gas charged to South African customers would have increased from R68.39/GJ to R133.34/GJ. The Industrial Gas Users Association of Southern Africa warned that its members were not only facing the prospect of an “untenable” hike in prices, but also the prospect of gas shortages as production from Sasol’s Mozambican wells tapered. Sasol says drilling is under way in a bid to find more gas and that it is now moving to explore acreage adjacent to its existing production wells. The company is also in advanced talks to finalise a term sheet for 40 to 60 petajoules (PJ) of LNG as additional incremental gas supply toward the latter end of the decade over and above its current 160 PJ requirement. GREEN HYDROGEN & NATREF REPURPOSING In parallel, the group intends moving ahead with an initial green hydrogen project at Sasolburg, in the Free State, where it will convert an existing 6 t/d electrolyser to operate on renewable electricity. The final investment decision for the green hydrogen project has been made with the aim of producing the first green hydrogen volumes towards the end of 2023. Details of the project will be announced once Sasol’s investment partner, the Industrial Development Corporation, also approves the investment. The group is also studying larger green hydrogen prospects that are likely to proceed only after 2030, including the possible creation of a green hydrogen hub at Boegoebaai, in the Northern Cape. Grobler expresses particular enthusiasm for using green hydrogen to produce a “drop in” sustainable aviation fuel (SAF), which will be produced using the group’s existing Fischer-Tropsch assets. “SAF remains one of the most promising pathways for the hard-to-abate aviation sector to decarbonise in future. “The SAF drop-in offering is an attractive aviation-fuel solution and the market is expected to grow massively in the years to come,” Grobler says, revealing that it is currently refining its “go-to-market” strategy in collaboration with others. He has also announced that a low capital solution has been found to produce Cleaner Fuels 2-compliant diesel at the Natref refinery, in the Fr...
The IPP Office has announced a new timetable for the upscaled sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) through which government will be seeking to procure a whopping 5 200 MW of new wind and solar photovoltaic (PV) capacity during a single bidding round. Proceeding with the full allocation hinges, however, on the Department of Mineral Resources and Energy (DMRE) securing the National Energy Regulator of South Africa’s (Nersa’s) concurrence with a new Ministerial determination expanding the procurement envelope for solar PV beyond that catered for under the existing Ministerial determinations. Mineral Resources and Energy Minister Gwede Mantashe has already indicated that he intends Gazetting a new determination under the Electricity Regulation Act to absorb the full renewables allocation included in the Integrated Resource Plan of 2019 (IRP 2019), but which is not yet included in the determinations with which Nersa has concurred. The IRP 2019 includes 14 400 MW of wind generation to be introduced by 2030 and 6 000 MW of solar PV, but the Section 34 determination published in 2020 is for only 6 800 MW of both wind and solar PV. IPP Office head Bernard Magoro tells Engineering News that a new determination has been submitted to the regulator to “mop up” the remaining allocations, as the solar PV allocation under the current determination has been “exhausted”. “If it's approved on time, it will allow us to add the additional 1 000 MW of PV,” Magoro explains. If not, the IPP Office will have to decide whether to delay the bid submission date again or proceed with 4 200 MW instead of 5 200 MW. Following President Cyril Ramaphosa’s July 25 announcement of the Energy Action Plan, which includes the enlarged BW6 allocation, the DMRE shifted the bid submission deadline from August 11 to September 22. The IPP Office is also awaiting confirmation from Eskom, which remains the single buyer of any electricity procured under the REIPPPP, that it is able to buy the electricity arising from the enlarged bid window, with a board decision on the matter said to be pending. Nevertheless, Magoro reports that the IPP Office is proceeding on the basis that both approvals will be secured, particularly given the prominence that the expansion of the BW6 allocation received in Ramaphosa’s announcement to tackle growth- and confidence-sapping power cuts. The size of the bidding round is significant, with the IPP Office having procured a total of 6 323 MW since the inception for the REIPPPP in 2011, a period that admittedly includes a seven-year disruption, from 2014 to 2021, precipitated by a refusal of the previous Eskom leadership to conclude new power purchase agreements. Eskom’s leadership at the time claimed that the utility had returned to a surplus supply position, while the current supply/demand gap is estimated to be between 4 000 MW and 6 000 MW. Having already postponed the bid submission deadline to accommodate the larger allocation, the IPP Office has now also confirmed September 15 as the last date for compulsory bid registration, including payment of the bid registration fee. Magoro tells Engineering News that the announcement of preferred bidders is scheduled to take place about two months after the September 22 bid submission deadline, with the IPP Office confident that its transaction advisers have the capacity to conduct their evaluations within that timeframe. Commercial close for BW6 will follow about six months later, with the long stop date for financial close set for a month after that milestone. The IPP projects that achieve financial close will have a maximum of 24 months thereafter to complete construction and to enter commercial operation. Magoro is confident that there is still market appetite for BW6, despite the opportunity that had been created by the lifting of the 100 MW licence-exemption cap for distributed projects linked to mines, farms and factories,...
Electricity utility Eskom reported on Friday that Unit 2 of the Koeberg Nuclear Power Station, which was returned to service earlier this month following an extended outage, was shut down after one of the control rods developed a mechanical problem. The utility indicated that repairs could take up to five days and that the probability of load-shedding had, thus, increased. “During routine testing of the control rod mechanism on the unit, one of the control rods developed a mechanical problem. “In order to rectify this, the unit has been safely shut down in accordance with safe nuclear operating procedure and the nuclear regulations. “It has not yet been determined how long the repairs will take, but it could be up to five days, whereafter the unit will ramp up over three days,” Eskom said in a statement. The 920-MW unit was shut for refuelling and extended maintenance on January 18 and was initially scheduled to return to service in June. It was eventually returned to service at 20:24 on Sunday, August 7. During the extended maintenance, three steam generators were also meant to be replaced, but the project was deferred to August 2023 following an assessment, conducted together with Framatome, which concluded that Eskom was not ready to implement the project. The deferral did not lead to any shortening in the duration of the outage, despite the fact that it accounted for one stage of load-shedding every time the utility resorted to rotational power cuts since January. South Africa has since endured is worst-ever period of rotational power cuts, with Stage 6 having even been declared at times during June and July when the utility experienced a wildcat strike across several of its coal stations. Eskom resorted to load-shedding again this week amid a cold snap, but suspended the cuts at midnight on August 19.. However, it warned that load-shedding might be implemented at short notice during 16:00 to 24:00 on Friday night, and during the evening peaks throughout the weekend. “We currently have 4 526 MW on planned maintenance, while another 14 574 MW of capacity is unavailable due to breakdowns,” Eskom said in a statement.
Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about plans by South African coal miners Seriti Resources, Exxaro Resources and Thungela Resources in the renewables space and how that positions them for the future. This is all happening at a time when the coal market is experiencing significant demand growth as a result of Russia's invasion of Ukraine and the impact thereof on the global energy sector.
News about extreme weather events has become a monthly occurrence, highlighting the importance of embedding some measure of infrastructure and societal resilience in the evolving climate. Damage to the built and natural environments disrupts socioeconomic activity, but the general public, naturally, tends to focus on visibly dramatic and/or traumatic events, often ignoring the more understated impacts of climate change. For example, while most people know about the wildfires that affected Europe last month, far fewer are aware that France had trouble cooling some of its nuclear reactors because the record-breaking heatwave meant that the rivers were too warm. As reported by news agency Reuters on July 15, four of the nuclear power plants operated by Electricite de France had to impose production restrictions because of higher-than-expected water temperatures in and along the Rhône and Garonne rivers. Reuters also reported the potential of further impacts on electricity production, as “some coal-to-power stations also need cooling water from rivers”. Moreover, while drought can often invoke visions of queues at water tankers and failing crops, the impact on sewage infrastructure is rarely considered. During the launch of the book Towards the Blue-Green City: Building Urban Water Resilience in June, co-author and University of the Western Cape Institute for Water Studies’ Professor Jenny Day noted that “less water flowing in sewers [means that] the sewers are more vulnerable to blockages and, therefore, to overflows”. Further, as people flush toilets less frequently to conserve water, the amount of sewage reaching wastewater treatment plants decreases, creating a “vicious cycle of failing wastewater treatment plants, [even] less water available, and less effluent, which could’ve perhaps been recycled”. Both examples illustrate that the effects of climate change can be much more subtle than physical destruction and, as international organisation the Global Centre on Adaptation (GCA) notes, the interconnected nature of infrastructure systems means that significant disruption in one aspect can “exert a significant human toll”. GCA CEO Patrick Verkooijen notes that “every corporation and individual is vulnerable to climate risk because they all depend, to some degree, on infrastructure. Ensuring that these infrastructure systems can operate under future climate scenarios is vital for us and our economies”. He adds that the cost of infrastructure damage will increase exponentially by 2050. Citing Ghana as an example, he notes that climate risk could lead to $3.9-billion worth of damage to the transport sector by 2050. This would, in addition to strangling the Ghanaian economy, risk cutting off 80% of the population from access to healthcare. The costs of extreme weather events are escalating. The floods experienced in KwaZulu-Natal earlier this year killed more than 400 people, immobilised business activity in parts of the province and caused considerable infrastructure damage, with Parliament’s Ad Hoc Joint Committee on Flood Disaster Relief and Recovery estimating that repairs would cost at least R17-billion. It is, therefore, evident that infrastructure resilience is key to long-term sustainability because, as Deloitte Africa Climate and Sustainability leader Mark Victor notes, resilient systems improve the ability of a society to withstand shocks. Creating infrastructure resilience requires that local governments understand the current and future impact of climate change on the built and natural environment, and all the potential implications of climate risks. They should also model the risk impacts and use such models to create a comprehensive and strategic plan to help drive resilience, he explains. Council for Scientific and Industrial Research (CSIR) senior researcher Willemien van Niekerk notes that, while the CSIR and other entities have been collecting and interpreting data to assist government in developing climate-res...
The first five months of the year have seen a “remarkable improvement” in the value of buildings completed in the metros and larger municipalities, with the category for additions and alterations coming out on top in terms of year-on-year growth rate, at “a whopping 92%”, says Optimum Investment Group economic adviser Dr Roelof Botha. Although the value of residential buildings completed only rose by 16% year-on-year, this growth remains impressive, as it was generated from a high base, he adds. The category for non-residential buildings placed in between these two, with a growth rate of almost 50% compared with the first five months of 2021. The exceptionally strong showing of additions to existing buildings can be linked to the after-effects of the Covid pandemic, which has led to a structural decline in the occupancy levels of many office apartments, says Botha. Some of these offices are now being converted into residential units or multipurpose real estate, which could include a mix of commercial, hospitality and warehousing facilities. “It is worth noting that additions and alterations to existing buildings have now overtaken non-residential buildings as the second most important category,” notes Botha. “This type of construction activity is inherently more labour intensive than non-residential buildings and also allows for a significant participation rate of relatively smaller firms.” REITs Recovering Several real estate investment trusts (Reits) will be buoyed by these newest trends, says Botha, with non-residential properties still feeling the pinch of lower occupancy rates induced by the Covid pandemic. Although the listed property sector has outperformed the JSE all-share index over the past year, its five-year performance remains in the red. According to news publication Moneyweb, a resumption of dividend payments by most Reits has improved investor confidence in the sector, with most fund managers forecasting forward dividend yields of close to 10%. The pandemic has given rise to a structural shift in working conditions, with a large measure of remote work here to stay. This will continue to shape the future performance of the property sector, especially with regard to an increase in demand for logistics space and repurposing of existing commercial and residential buildings, says Botha. The revival of building activity is aligned to the results of the latest Afrimat Construction Index (ACI), which outperformed the gross domestic growth rate during the first quarter of the year on a year-on-year basis, albeit marginally. The recovery of the property market from the debilitating effects of the pandemic is also reflected in the latest TPN Rental Monitor, which showed an improvement in the national residential vacancy rate from 13.3% in the first quarter of 2021, to 8.3% in the first quarter of 2022. Rental Tenants Under Pressure Unfortunately, tenants are facing pressure as a result of higher inflation and higher interest rates, with the number of tenants in good standing dropping marginally from 81.4% in the fourth quarter of 2021, to 80.8% in the first quarter of 2022, notes Botha. Tenants in the R3 000 to R7 000 rental price bracket and those paying less than R3 000 a month were the worst performing categories, but rental brackets above R7 000 continued to rise from the low point recorded in the second quarter of 2020. The Western Cape currently has the lowest vacancy rate and the highest number of tenants in good standing, says Botha. “The province’s superior property market performance is also evident in the fact that it has overtaken Gauteng as the province with the highest value of building plans passed. “These data sets confirm the so-called semigration trend that has become prevalent in South Africa, mainly as a result of huge and visible regional differences in the standards of service delivery at municipal level.”
Sasol Gas has confirmed that it has delayed the implementation of a controversial 96% increase in the price of pipeline gas, which was initially announced as being effective from August 1. Had the increase been introduced, the price of gas charged to South African customers would have increased from R68.39/GJ to R133.34/GJ. In a letter to customers, Sasol Gas said that it was continuing to engage with the National Energy Regulator of South Africa (Nersa) on the gas price to be implemented for the period to June 30, 2023, “in the hope that the matter can be finalised amicably and swiftly, in the interest of price certainty for gas suppliers, traders and consumers”. “Pending these ongoing engagements with Nersa, Sasol Gas has decided not to implement the new actual gas price of R133.34/GJ effective 1 August as previously communicated to you,” the letter reads, adding that it will continue to charge R68.39/GJ. Following news of the hike, Nersa insisted that it had not approved any increase in the maximum price of pipeline gas and stated that it “would not approve any increase which doubles its previously approved maximum gas price”. This statement followed an outcry from the Industrial Gas Users Association of Southern Africa (IGUA-SA), which warned that the hike would cost the South African economy R325-million a month and could trigger both manufacturing cutbacks and retail price hikes. IGUA-SA has been at loggerheads with Nersa over the gas-price methodology for years and in December last year lodged an application in the Gauteng division of the High Court challenging Nersa’s 2021 approval of Sasol Gas’ maximum gas prices. It has also made repeated calls for Nersa to adopt a methodology that uses Sasol’s cost base as the main reference point for setting the price. Prior to its decision to delay the increase, Sasol Gas said the price had been determined using the approved calculation methodology and had been communicated with Nersa. It also noted that the revised price was well below the maximum gas price as determined by the Nersa Maximum Gas Price decision. “Applying this approved adjustment method yields a maximum gas price of R273.43/GJ,” Sasol Gas said.
Cartrack has enabled a series of new safety alerts for vehicle drivers and fleet managers related to speeding, traffic proximity and potential distractions. The company says it has enhanced its video- and sensor-based safety technology – powered by artificial intelligence (AI) – taking its accuracy in capturing high-definition video of critical events “to the next level”. Cartrack Live Vision camera technology is a cloud-connected video management solution that takes feeds from in-cab safety cameras and uses AI analysis to provide proactive driver monitoring. “This camera technology is proven to protect drivers, as well as lower costs, and contributes towards the safety of millions of drivers and commuters on South Africa’s roads,” explains the company. “The Live Vision camera technology works in sync with Cartrack’s on-the-ground operations cloud platform and Internet of Things devices to give enterprises a full view of their fleet operations.” Cartrack says a fleet manager will, for example, receive alerts about a driver’s behaviour in real time. He or she is then able to log in to Cartrack’s Web platform or mobile app to watch any of the camera footage via livestream, ensuring that preventative action can be taken immediately, if necessary. Forward-collision warning, distracted and fatigued driving, smoking, yawning and cellphone use have all been added as new events on Cartrack’s Live Vision. Cartrack’s AI technology will track the driver’s head pose to alert to distracted driving, while the fatigue indicator will monitor whether the driver’s eyes are open, alert and focused on the road. These features are captured in real time and delivered to the fleet manager for preventative coaching and training, while in-cab warnings also audibly alert the driver to avoid dangers on the road. The likelihood of tampering is minimised given the immediacy of the AI alerts. Cartrack national commercial manager Bret Smith says AI-powered camera technology makes it possible for fleet managers to remotely support drivers and to manage fleets more effectively. “AI technology and telematics have a pivotal role in measuring and coaching drivers on behaviour and ensuring that they are aware of the risks on the road. “Fleet owners face challenges in managing driver behaviour on short and long-haul trips, particularly with driver fatigue, safety and speed being largely self-regulated. “AI is changing the way we view risk management and is a necessity for any business to assist with better decision-making, improving safety and enhancing operational efficiencies,” adds Smith.
Green hydrogen development company Hyphen Hydrogen Energy (Hyphen) is optimistic that the implementation agreement for a planned $10-billion project will be signed with the Namibian government by year-end. The signing of the implementation agreement will trigger the commencement of the front-end engineering design phase of the project, which will be constructed over two phases with the eventual goal of producing 350 000 t/y of green hydrogen from 5 GW to 6 GW of renewable generation capacity and a 3 GW electrolyser. The $4.4-billion first phase is expected to produce 125 000 t/y of green hydrogen, to be further processed into 700 000 t/y of green ammonia for export to Europe. A joint venture between Nicholas Holdings of the UK and ENERTRAG of Germany, Hyphen was awarded preferred-bidder status in November last year on some 4 000 km2 of land within the Tsau //Khaeb National Park, near Lüderitz. The Namibian government has earmarked 25 000 km2 within the region for the development of a green-hydrogen industry involving multiple investors. In June, Namibia’s Cabinet endorsed the composition and appointment of the ‘Government Negotiations Team’ assembled to finalise the implementation agreement with Hyphen, as well as the proposed timeline of its signature. Hyphen and the Namibian government aim to begin construction in January 2025, with commissioning of the first phase by the end of 2026. The total investment over both phases is roughly the equivalent of Namibia’s current yearly gross domestic product. Hyphen CEO Marco Raffinetti said he was pleased by the Namibian government’s commitment towards concluding the implementation agreement, which would facilitate the start of the next phase of the project. “Our project will put Namibia’s green hydrogen industry firmly on the global energy and decarbonisation map and position Namibia for rapid green-hydrogen scalability,” Raffinetti said in a statement. Hyphen also reported the appointment of the Boston Consulting Group and Lazard as its international strategic and financial advisers respectively, complementing its existing legal advisory team, comprising Slaughter and May and ENS Africa.
Sometimes, a pandemic is not the worst thing that can happen to a company. When Covid-19 hit, the pandemic did interrupt MellowVans’ global rollout plans, but it also prompted the Stellenbosch-based manufacturer to revisit the design of its electric three-wheel delivery vehicle, as well as its operating model. “We realised just before lockdown in 2020 that we would like to improve our product by rather working to a European standard for our vehicles, which is aimed at the last-mile market,” says founder and CEO Neil du Preez. He adds that the global marketplace saw an explosion in online shopping because of Covid-19 and, subsequently, also in last-mile deliveries in sectors such as e-commerce, retail and food. “South Africa is still trailing these global growth numbers, but we are catching up,” notes Du Preez. MellowVans’ redesign ended up being more of a remanufacturing process than a mere facelift, with everything on the electric vehicle (EV) upgraded, with the exception of the fibreglass composite outer shell. “We sourced the best of everything we could find, made the vehicle lose some weight, and ensured that it would fully satisfy European standards,” says Du Preez. “The result is a comfortable new vehicle that is a premium product built for Africa and Europe – in fact, it exceeds European safety standards.” Production of the new-look vehicle started in January. Operating costs of the new vehicle are at around 13c/km, with the 2.5 m3 cargo bay able to carry more, and larger items than competitor vehicles, says Du Preez. “There is nothing on the road that can come close to our costs per cubed meter.” He adds that the MellowVans’ number compares favourably with the AA rate for a small internal combustion engine delivery vehicle, at around R5.50/km, as well as an electric motorbike, which would have to make numerous trips to carry the same load volume. The MellowVans vehicle is also feature-rich compared with a motorcycle, with a comfortable, lumbar support seat, safety belt, rollover cage, weather protection, as well as Bluetooth. The top speed is electronically limited to 60 km/h, as the vehicle is designed to operate only on urban roads. The range of the 10.7 kWh battery pack is around 100 km, with recharging through a standard wall plug, provided by an on-board charger. Charging from empty to full takes around four hours. The cargo area can also be customised to customer requirements, such as rails for a laundry business, or shelving for a retailer. “We are currently looking at options around cooling the cargo area,” says Du Preez. He also notes that around 70% of the vehicle is produced locally, by value. MellowVans buys the battery from a South African company, which imports the cells to build the batteries. “We make use of our own battery management system,” says Du Preez. He adds that MellowVans is set to receive some benefits from government’s Automotive Production and Development Programme, as it is currently being revised to accommodate smaller manufacturers. “Government did engage us, and we are participating in the process,” says Du Preez. MellowVans employs around 35 people. “We are looking at growing our production capacity, with exports in mind,” says Du Preez. The MellowVan is currently undergoing testing in The Netherlands. Locally, Takealot, Spar and DHL are all MellowVans customers. “Our order book looks good, with a decent production pipeline,” says Du Preez. EVs-as-a-service Covid-19 not only prompted a change in MellowVans’ vehicles, but also in its operating model, with the vans no longer on sale, but leased to customers in what is known as EVs-as-a-service. “We offer a three-year lease that includes everything – insurance, maintenance and training,” explains Du Preez. One other, additional clause on the table is an advertising component. “Either we brand the vehicle ourselves, or the client finds someone to advertise on the vehicle to reduce the price tag on the lease contract – by how much depend...
State-owned freight logistics group Transnet has launched a High Court application through which it is seeking an order compelling China Railway Rolling Stock Corporation (CRRC) E-Loco Supply to release spare parts and components required to return 120 locomotives to service. Transnet said in a statement that the spare parts and components had been imported to service and maintain the 95 20E and 100 21E locomotives acquired from CRRC in 2012 and 2014 respectively. “The application provides for an urgent hearing to secure the immediate release of the spares to Transnet for use in the locomotives, and for the amount due by Transnet to CRRC for such spares, if anything, to be determined in due course,” Transnet said in a statement. Access to the spare parts and components, the utility added, would allow it to bring back to service 53 Class 20E and 67 Class 21E locomotives, which have been standing idle as a result of the inability to access the required spares and components. “In addition, it will contribute to timely maintenance of these two fleet classes,” the statement adds. The standoff with CRRC arose following Transnet’s 2019 decision to halt the so-called 10-64 contract, for 465 diesel and 599 electric locomotives, in which CRRC participated along with three other original equipment manufacturers (OEMs). Transnet deemed the contracts, which featured during proceedings undertaken as part of the State Capture commission, to be “irregular and illegal”. The cancellation of the contracts has left Transnet Freight Rail (TFR) with a locomotive shortfall, which Transnet aims to address through the issuance of a new tender, possibly later this month. It has been amplified, however, by CRRC’s refusal to provide Transnet with the spares required to maintain those locomotives already supplied to the utility. In July, Transnet CEO Portia Derby said that the impasse was partly responsible for as many as 300 locomotives having been “parked” and also indicated that an alternative OEM support strategy would be pursued for the existing fleet if the current deadlock with CRRC was not resolved. Several TFR customers have expressed dismay at the poor performance of the rail business over the past few years, owing to a shortage of locomotives and ongoing theft across the rail network, with TFR having lost a total of 1 500 km of overhead copper wire to theft in 2021/22 alone. Coal exporters have identified the poor performance of the rail service as a key reason for them having failed, thus far, to take full advantage of the super cycle conditions that have arisen for the energy mineral as a result of Russia’s invasion of Ukraine. Steel group ArcelorMittal South Africa, meanwhile, reported that it was forced to close a blast furnace at Vanderbijlpark earlier this year, because intermittent rail deliveries had left it short of iron-ore. The group has resorted to receiving material by road, even though the logistics systems at its mills are specifically designed to receive bulk material by rail. Several large rail users have indicated that they will consider partnering with private rail providers should Transnet extend the sale of slots to third parties beyond the 18 general freight corridors identified for the initial phase of such sales. Derby indicated previously that TFR was committed to making slot sales a permanent feature of the rail business.
Retail giant Shoprite has acquired 100 Euro V trucks from Scania Southern Africa, with another 140 units be delivered by the end of next year. The Euro-scale refers to the level of exhaust pollution from a vehicle, with Euro 5 much cleaner than Euro II, which is the current South African truck-emission standard set by government. In addition to this, higher Euro-specification vehicles also typically offer significant fuel savings. These trucks do, however, also require clean diesel, which has become more readily available in South Africa in recent years. Scania Southern Africa Services GM Mark Erasmus says the local arm of the Swedish truck maker conducted 45 one-month tests with a number of customers with varied needs in the local market before formally introducing the vehicle to South Africa. In each of these tests the Euro V trucks proved to be more fuel efficient than the customers’ existing trucks by up to 10%, or more, which is significant considering current diesel prices – as well as Shoprite’s operational footprint. The group’s fleet currently includes 903 trucks and 1 360 trailers, of which 928 are fitted with solar panels. During the 2020/21 financial year, Shoprite’s fleet travelled close to 90-million kilometres, delivering more than 350-million cases of products to its stores. “Operational and supply chain efficiency play a critical role in ensuring that the group remains Africa’s most affordable and accessible retailer, while reducing our environmental impact,” says Shoprite chief supply chain officer Andrew Havinga. “We are relentless in our efforts to improve efficiencies in our supply chain as these measures are key to extending our customers’ spending abilities.” These efforts include changing to more fuel-efficient trucks and installing solar panels on truck trailers, as these trucks can be switched off while the refrigeration function and tailgate lift run on solar power. “By further increasing the energy efficiency of our trucks and training our drivers on how to reduce fuel consumption, we are able to lower the comparative impact of the distance our fleet travels every year,” notes Havinga. “Scania is committed to developing sustainable transport solutions, and we are delighted to see how aligned Shoprite is to our own sustainability objectives,” says Scania Southern Africa MD Erik Bergvall. Scania’s future product pipeline includes developments around hydrogen fuel cell trucks and electric trucks.
Consultancy XA Global Trade Advisors says billions of rands in revenue have been lost to the fiscus owing to long overdue customs duty decision-making, while also having more far-reaching implications for industries and trade and investment. If all of the cases that required changes to customs duties had been finalised – and granted – on time, it would have ensured a collection of R1.25-billion by now, cumulatively, for every case that is long overdue. Some cases have remained unresolved as long as three years, but XA Global founder and CEO Donald MacKay says tariff investigations should take four to six months, as per the rules of the International Trade Administration Commission (Itac) which is South Africa’s authority on goods movement across borders. MacKay and his team conducted research into delays experienced with customs decisions at Itac and the ministries of Finance and Trade, Competition and Industry, and found that the average days taken for tariff investigations has increased to an average of 320 days since 2015, compared with an average of 191 days between 2009 and 2014. He states in the XA Open Cases Report, which can be found at, that as localisation becomes more firmly driven, the behaviour around tariff policy is taking increasingly longer. In addition to the fiscal losses of revenue, another R2-billion has been collected in duties for goods not made locally, adding a R2-billion cost to industries without actually protecting domestic industry. South Africa collects about R55-billion a year in customs duties, so these delays are equivalent to more than 5% of the country’s total customs duty collections. MacKay says the expectation is not for Trade, Industry and Competition Minister Ebrahim Patel to impose fewer or more duties, but to effect a quicker turnaround time for decisions on proposed duties to be made. He elaborates that, of the 46 cases that are currently overdue and that have averaged 16.4 months since their initiation, the bulk of delays have been caused by the Finance and Trade, Industry and Competition ministries, with most cases leaving Itac’s desk “fairly quickly”. Of the last three years’ cases, 58% are overdue. The rebate review and duty increase cases are most often delayed, with the average days since initiation at 834 and 771 days, respectively. For example, tyre manufacturer Sumitomo asked for duty relief on Styrene-butadiene rubber, a raw material used to make tyres, as there are currently no local manufacturers of the material in the Southern African Customs Union region, and customs duties for this item impose additional input costs in the tyre manufacturing process. This decision has been 22 months overdue at a cost of R34-million in the meantime. Another example is that of value-added meat products manufacturer BRM, which has asked for a rebate of duties on chicken wings, since the company cannot find a local producer willing to commit to its volume requirements. The decision has been nine months overdue at a cost of R93-million in the meantime. MacKay says most businesses will prefer a rejected application as opposed to pending, delayed or unknown outcomes that put vital investment decisions on hold and businesses taking strain over input costs unnecessarily. “These delays are enormous and, most importantly, unnecessary, because the problem can be quickly resolved. Most of these cases have been fully investigated by Itac and simply need to be signed off by the Ministers. Meanwhile, MacKay says there is much confusion legally as to the role of the Finance Minister in customs duties. During Malusi Gigaba’s term, he defended twice in court his right to take the final decision in respect of implementing duties; however, this role is not specific in the current tariff regulations or other related pieces of related regulation. MacKay says the regulations have to be amended to make the role of the Finance Minister in this regard clear. He also deems it necessary for an expiry period for ...
Toyota South Africa’s Prospecton plant, in Durban, KwaZulu-Natal, will take three to six months to get back to full production capacity, Toyota South Africa Motors (TSAM) president and CEO Andrew Kirby has said. The plant was shut temporarily following a severe flooding incident that affected predominantly a widespread area in Durban downstream of the Shongweni dam on April 12. Sluice gates were opened at the Shongweni dam after heavy rainfall resulted in the dam reaching capacity. The release of a vast volume of water meant that mud- and silt-laden water breached the banks of the Mlazi river near Toyota’s plant in the Industrial area. The subsequent flood resulted in water entering the ground and basement levels of the Prospecton plant, reaching depths of between 1.5 m and 1.8 m. The resulting flood knocked out electricity, water supply and telecommunications services to the entire plant. During a site visit on August 16, TSAM said the plant was ramping up operations, with many production lines having opened back up. The plant is expected to produce about 135 100 vehicles this year, compared with the 203 700 units a year produced prior to the flooding. Following the flooding, TSAM embarked on an eight-stage process to ramp up operations, Phase 1 involved emergency control measures. The second phase saw the company prioritise making operations safe, secure and clean, while Phase 3 involved restoring electricity to the plant after it was cut to prevent electrocution directly after the flood. Phase 4 saw Toyota South Africa checking and assessing equipment, while Phase 5 involved repairs of damaged, but recoverable equipment, as well as ordering replacement equipment that could not be repaired. Delivery of new equipment and verification thereof were taken care of in Phases 6 and 7, while the final phase involves machinery and plant start-up. Mass production of Hino units was reached on May 24, Toyota Hi-Ace units on July 15 and the Corolla Cross on July 28. TSAM plans to go into mass production of Corolla Quest units on August 17. The Hino production line is running at full capacity. On August 12, TSAM shipped its first post-flood batch of export vehicles to Europe, showing its commitment to scaling up operations. TSAM is also implementing future climate resilience measures, such as raising sensitive electronic equipment off the factory floor. This is being done to ensure the company remains insurable and to ensure it can better weather any similar incident or other climate-change-related weather incidents in the future.
As Cabinet is busy approving the Just Transition Framework for publication, the Presidential Climate Commission (PCC) has unpacked a key part of what the framework will be premised on – Climate Resilience Development Pathways (CRDPs). PCC commissioner Makoma Lekalakala says South Africa’s Just Transition can only be realised if CRDPs are at its core, while PCC secretariat Chrispian Olver states the CRDP approach is vital for implementing the Just Transition Framework. The PCC was tasked to design a Just Transition Framework for South Africa, as a first building block towards realising a coordinated and coherent approach to just transition planning in South Africa. Olver says CRDPs, in the South African government’s view, involve a deeply consultative process, particularly with people who have the most to lose in an energy transition, including workers in the coal value chain, women and the poorest of the poor. The PCC has since its establishment as an advisory body to government in December 2020 embarked on pilot projects in Saldanha Bay and eThekwini to understand and determine ways of making the energy transition equitable, while ensuring a climate-resilient future. The commission has looked at other pathway frameworks and international applications as a starting point for its work, and assessed the capacities needed to this end in South Africa. It also consulted with international experts developing and using CRDP approaches. CRDP is focused on enabling decision-makers to systemically take into account the projected impacts of climate change on strategic infrastructure development, planning and management, alongside other traditional development criteria. It helps to manage the trade-offs between multiple sectors involved in a particular project and selects the most climate-resilient development method. The PCC will further draft proposals for taking this work forward into various operating spaces. University of Cape Town African Climate and Development Institute research fellow Anna Taylor explains that the CRDP follows an integrated consideration of the various systems that make up the country and the various outcomes that are dependent on the decisions made today. The United Nations’ Intergovernmental Panel on Climate Change (IPCC) deems these systems to be land, ocean, coastal and freshwater ecosystems; urban, rural and infrastructure; energy; industry; and society. South Africa has taken a similar view. The IPCC regularly investigates the conceptual and empirical advances being made on CRDPs. IPCC co-chairperson and South African climate scientist Debra Roberts says limiting global warming to 1.5 ˚C above preindustrial levels is expected to substantially reduce damages to African economies and ecosystems. She believes that governance for climate resilient development includes long-term planning, all-of-government approaches, transboundary cooperation and benefit-sharing, development pathways that increase adaptation and mitigation, and Nationally Determined Contribution implementation. “Ecosystem-based adaptation in African cities has huge potential, particularly in fast-growing small- and medium-sized cities. This type of holistic thinking is centred on equity and justice, and avoids quick fixes without deeper reflection on nature or societal needs,” she states. She adds that cross-sectoral or “nexus” approaches, as encompassed in CRDPs, such as water-energy-food or climate-ecosystems-human health can deliver multiple benefits and avoid maladaptation to climate change. Roberts says that, while limiting climate damages may not do much to realise economic growth in every region, it will ensure that fewer millions of people in Africa are pushed into extreme poverty owing to climate change and negative health and livelihood impacts. She explains that even though African countries are among those that contribute least to greenhouse-gas emissions globally, there are already widespread losses and damages being experienced...
Audi South Africa (SA), in partnership with GridCars, have finalised the installation of 33 electric vehicle (EV) new charging stations across the country. The chargers include four 150 kW (DC) ultrafast, five 80 kW (DC) fast, and twenty-four 22 kW (AC) EV charger installations. All of the chargers are available to all South African EV drivers, regardless of model or brand. “Audi is committed to ensuring that customers of any EV can comfortably travel the country, with the reassurance that the charging infrastructure is in place to support their progressive choice of mobility,” says Audi SA head Sascha Sauer. “With the public Audi EV chargers now formally in operation and available, our project in ensuring that there are active state-of-the-art EV chargers at key destination and lifestyle venues across South Africa is tracking well, and we are excited to officially encourage all early adopters of electric mobility to utilise these charge points. “This is a huge encouragement towards the adoption of EVs in South Africa as it’s a positive indication towards a growing public EV charging network in our country,” he notes. The four 150 kW (DC) public chargers in the network are the first for the South African market, says the German premium car maker. These chargers will enable around 340 km driving range in roughly 30 minutes. These ultrafast chargers have been strategically positioned along national roads to support long-distance travel. They can be found at: N1 – Colesburg, Caltex, Northern Cape N2 – Mosselbay, Langeberg Mall, Western Cape N3 – Tugela North, Engen, KwaZulu-Natal N4 – Riverside Mall, Mbombela, Mpumalanga The live 80 kW (DC) fast charging stations, enabling around 185 km in 30 minutes, can be located at: N1 – Ventersburg, Caltex, Free State N1 – Richmond, Caltex, Northern Cape N2 – The Crags, Engen, Plettenburg Bay, Western Cape N3 – Tugela South, Engen, KwaZulu-Natal N4 – Alzu Petroport, Mpumalanga (Audi has upgraded the existing unit from DC 60 kW to DC 80 kW. GridCars has also installed a new EV charging unit at Kranskop Engen, Limpopo). The live 22 kW dual (AC) charging stations, enabling around 100 km in about an hour, can be located at lifestyle and destination venues in the following provinces: Western Cape: Hazendal Wine Estate, Stellenbosch Franschhoek Motor Museum, Franschhoek Delaire Graff Estate, Stellenbosch Spier Wine Estate, Stellenbosch Thesen Island, Knysna Graham Beck Wine Estate, Robertson The Marine Hotel, Hermanus The Cellars Hohenort Hotel, Constantia D’Hub B&B, Cape L'Agulhas Gauteng: Parkview Shopping Centre, Pretoria Johannesburg Country Club, Auckland Park Royal Johannesburg & Kensington Country Club Serengeti Golf & Wildlife Estate, Kempton Park Johannesburg Country Club, Woodmead Bryanston Country Club, Johannesburg Kyalami Corner, Johannesburg Virgin Active Bryanston, Johannesburg Mpumalanga: 84 on Main, Dullstroom Hazyview Junction Shopping Centre KwaZulu-Natal: Cornubia Mall, Mt. Edgecombe Selborne Hotel & Golf Club, Pennington Cedar Garden B&B, Underberg Free State: Protea Hotel by Marriot, Clarens North West: Village Mall, Haartebeespoort dam Audi says its network can be located on the GridCars live online map. “Our mission is to continually increase EV charging points across the country in order to drive South Africa’s green e-mobility revolution forward,” says Sauer.
Black-owned coal miner Seriti Resources says the R892-million acquisition of a majority stake in Windlab Africa’s wind and solar assets represents a significant landmark in the company’s ambition to become a diversified energy business, as well as in reducing its own carbon emissions. Through the transaction, which is expected to close in early 2023 once Competition Commission and South African Reserve Bank approvals have been secured, Seriti Resources’ recently-established Seriti Green subsidiary will acquire a 51% controlling interest in Windlab Africa. The balance of the company will be held by RMB (14.5%), Standard Bank (14.5%) and two individual partners, Windlab Africa’s Peter Venn (15%) and Ntiso Investment Holdings (5%). Windlab Africa, which owns Windlab South Africa and 75% of Windlab East Africa, is currently overseeing a 3.5 GW portfolio of renewable-energy projects at different stages of development, including a 450 MW pipeline in the Mpumalanga province, where several Seriti mines are located. Seriti Resources CEO Mike Teke describes the acquisition as a timely and strategic addition to the group’s portfolio of coal assets, which include the New Vaal, New Denmark, Kriel, Khutala, Klipspruit and Middelburg Mine Services operations, as well as the New Largo mine under development. The operations, which were acquired from Anglo American and South32, supply several Eskom coal stations and also export coal through the Richards Bay Coal Terminal. Teke says Seriti’s commitment to the responsible and reliable production of coal for both domestic consumption and export remains unwavering. However, the company is conscious of the impact that fossil fuels have on the environment and is, thus, committed to playing an active role in helping manage the just transition to a low-carbon economy. “The introduction of renewable energy into Seriti’s existing portfolio of high-quality coal assets will provide long-term financial stability and diversification whilst embracing alternative energy sources and helping to secure the country’s power needs.” Seriti uses 750 GWh of electricity in the process of mining and in October last year it signed an agreement with Eskom and Exxaro outlining its commitment to start using wind and solar energy at its own facilities from 2023. “We need to be moving towards a lower-carbon future through investing capital from coal into green energy. “It is not only the right thing to do, but it makes business and societal sense,” Teke says. 450 MW MPUMALANGA WIND PROJECT Venn reports that, once the transaction is completed, Seriti Green will be seeking to build 1 GW of capacity across the country as quickly as possible and that he expects work on a 450 MW, R12-billion, Mpumalanga wind farm to begin in the first half of 2023. Seriti CFO Doug Gain reports that Seriti Coal is likely to contract 150 MW of the initial 450 MW to be developed and that its models point to material electricity cost savings relative to the Eskom Megaflex tariff, which continues to rise. The initial wind project will be developed on grid-ready land that is not owned by Seriti, which plans to begin permitting, in parallel, its own properties for the future roll-out of wind, solar and battery storage assets. “With African ownership and local capital, the business will now be able to accelerate the development of its significant pipeline to assist in alleviating the electricity shortages on the African continent,” Windlab CEO John Martin asserts. Prior to the proposed transaction, Windlab only developed South Africa renewables projects, and did not take ownership, as its parent company currently does in Australia. Under the new umbrella, however, the ambition is for Seriti Green to build and own the projects and for the company to implement a 3 GW South Africa portfolio by 2030, which would entail an investment of about R75-billion. Venn says the recent lifting by President Cyril Ramaphosa of the 100 MW licence-exemption cap on distri...
The City of Cape Town, which is in the process of procuring up to 200 MW of renewable energy from independent power producers (IPPs), expects to initiate a utility scale battery energy storage system (BESS) programme in 2023. It is also working on the design of a so-called ‘dispatchable IPP programme’ that could deliver first power in 2026 as part of a broader strategy to improve security of supply and mitigate against intensifying load-shedding. Generation development manager Shane Prins told delegates during a webinar on August 12 that he expected BESS to emerge as a major component of the city’s unfolding energy resilience strategy. “Multiple use cases are seen as feasible within the city to support the BESS business case, with the main focus currently on network investment deferral, back-up supply to critical facilities and, at a later stage, arbitrage,” Prins said during the event, co-hosted by the Association of Municipal Electricity Utilities and the South African Institute of Electrical Engineers. Detailed location analysis had been completed and the city would now focus on developing site-specific BESS business cases. In parallel, the City of Cape Town had completed the initial design of a ‘dispatchable IPP programme’, which would be “technology agnostic” and implemented through a competitive tender process. Prins said the solutions would have to be both dispatchable and able to generate over extended periods, which made the procurement complex and potentially expensive. “The impact on the tariff will, thus, be a key consideration.” Should it proceed, the dispatchable programme was likely to be larger than the current embedded renewables IPP procurement and, depending on the final technology selected, could require enabling infrastructure. Nevertheless, the city viewed the programme as having “significant catalytic potential for economic growth in the city and the province” and was, thus, aiming to secure first power under the scheme in 2026. Prins reported that the city had been encouraged by the response to the embedded IPP tender launched in February and that first power is still expected by the end of 2025. However, he reported that recent increases in renewables component prices posed a risk to bidders meeting the price cap set. Cape Town was also moving ahead with its own-generation projects, including a 10 MW solar photovoltaic (PV) facility to be sited on vacant land in Atlantis and connected directly into the city’s network. Project execution is expected to begin in the first quarter of 2023 and the initiative was being treated as a “lighthouse project”, or a possible template for similar, but bigger, projects in future. One such project could be the Paardevlei solar PV development, in Somerset West, where land parcels have been identified for a possible 50 MW to 60 MW facility. In addition, it Cape Town is assessing further rooftop and small ground mounted PV projects and is piloting a floating solar facility at the Kraaifontein wastewater treatment works, which could reduce evaporation and deliver a higher yield as a result of its proximity to the water’s cooling effect. EKURHULENI SEES WHEELING AS REVENUE OPPORTUNITY Gauteng metropolitan council Ekurhuleni, meanwhile, reaffirmed that it had a target of ensuring that 30% of its electricity was derived from renewable or clean sources by 2030, not only to support its decarbonisation strategy, but to improve security of supply and to reduce costs. Chief engineer Hendrik Raedani said the business case for pursuing energy transition initiatives had improved in line with falling renewables costs and was being amplified by the growth in demand for green energy from certain businesses operating in Ekurhuleni, including data centres. He reported that the city had already appointed 47 IPPs to procure 683 MW of renewable energy, while registered embedded generators in the region had a combined capacity of 400 MW. Ekurhuleni expects savings of R13.9-billion as a res...
Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about the consultations that are under way regarding Eskom's next revenue application; the National Energy Regulator of South Africa having to deliberate on the Retail Tariff Plan submitted by Eskom; and the ongoing consultations regarding a new pricing methodology for the electricity supply industry.
State-owned defence company Denel has announced it will institutionalise and implement a new turnaround plan to effect a self-sustaining business. The plan is particularly focused on streamlining the company, growing its order pipeline and accessing new revenue streams. Chief restructuring officer Riaz Salojee said during a media briefing on August 11 that the plan has the support of the Department of Public Enterprises (DPE) and the Denel board, and will be strengthened through a formalised memorandum of cooperation with the Department of Defence (Dof) and its arms procurement agency the Armaments Corporation of South Africa, to ensure alignment on sovereign and strategic capabilities. Denel was a stable State-owned enterprise between 2010 and 2015, but started showing signs of financial distress in 2016/17, partly owing to State capture and emerging weaknesses in management, leadership, project execution and contract management. The company’s revenue had fallen from a peak of R8.2-billion in 2015/16 to under R2-billion in 2021/22. It also has not helped that the South African defence budget spend in relation to gross domestic product (GDP) has been declining for a number of years down to 0.7%. This compares with the world’s average spend on defence as a percentage of GDP, which sits at about 2%. Salojee believes Denel can start being self-sustaining with an order book of R12-billion and reach a complete turnaround and solid revenue generation with an order book of R30-billion. The current Denel business model, however, remains materially lossmaking, but some improvements can be made on the execution of current orders, among other efforts. The turnaround plan is premised on six elements – reducing costs and improving performance; engaging staff who are performance oriented; increasing the customer base; implementing an effective supply chain, which relates to procurement processes and contract management, as well as optimal stock levels; optimising planning and production; and establishing key partnerships and joint ventures. Responding to whether Denel will be asking for turnaround capital from the fiscus, interim chairperson Gloria Serobe said it would first seek to raise funds by selling noncore assets and reducing its cost base wherever possible. However, Denel has submitted a recapitalisation application to the National Treasury through the DPE, to address the company’s legacy debt and introduce liquidity. When asked whether retrenchments were in store, Serobe affirmed that Denel would follow the necessary consultative and legal processes before embarking on such action. She added that the turnaround plan was not meant to negatively impact employees. Salojee said the strategic intent of Denel was to reduce dependence on the fiscus. Rather, a rationalised Denel would focus on its proven capabilities in the fields of guided weapons, land defence systems, aircraft engineering and maintenance and the delivery of complex integrated systems for the security and cyber-environments. However, the problem at the moment was the fixed cost of the business being far in excess of revenue and executable business. The company will now focus on achieving higher levels of efficiency by adopting a smaller geographic footprint and streamlining policies and processes, including on engineering, manufacturing and the support environment. “We intend to grow long-term strategic partnerships with the local defence and technology sectors, and entrench our position once again in the local and international markets,” Salojee said. He noted that there remained a significant interest in Denel’s battle-proven intellectual property, adding that the rapidly changing global defence environment would create opportunities to market the company’s products. The “reset” of the company will be done in three stages: stabilisation, which is based on current revenues, obligations and reduced infrastructure; followed by sustainability, which will be based on exp...
The City of Cape Town will this month start construction of two new MyCiTi bus depots. The R340-million project forms part of the roll-out of the MyCiTi service to Mitchells Plain, Khayelitsha, Claremont and Wynberg. It is estimated that 145 buses will be operating from each one of the depots, making it 290 buses in total. However, this number may increase over time, depending on future demand for the service, City of Cape Town Urban Mobility MMC Rob Quintas tells Engineering News Online. “The roll-out of the service to Mitchells Plain and Khayelitsha will be undertaken in phases, as infrastructure becomes available and the necessary operating contracts are put in place,” he notes. “The first buses, although not on dedicated red busways, are expected to operate by mid-2025, if all goes as planned and if there are no delays, as part of the earlier operational milestone dates servicing the Nyanga/Central Business District route and the Wynberg/Claremont to Khayelitsha/Mitchells Plain route.” The two new bus depots will be built on a 15 ha piece of land on the corner of Mew Way and Spine road, situated between Mitchells Plain and Khayelitsha. The first construction work will be visible by mid-August. “The city's expenditure on the roll-out of the MyCiTi service to the south east is the biggest financial investment in public transport by any metro city to date,” says City of Cape Town mayor Geordin Hill-Lewis. “With the expansion of the MyCiTi service, we will be bringing more MyCiTi routes to Mitchells Plain and Khayelitsha to connect commuters with Claremont and Wynberg. “This is a mammoth undertaking and we are doing it in phases,” says Hill-Lewis. “Residents from these areas will see new infrastructure being built in the coming 36 months, be it the widening of roads, MyCiTi stations and stops, and depots needed to operate the service. “I am proud to say that the new bus depots will be state-of-the-art facilities, designed to use our scarce and limited resources to maximum benefit,” notes Hill-Lewis. The depot buildings will be orientated and shaped in response to the sun's direction, while it will also utilise saw-tooth roofs to channel reflective light into the interior to minimise the need for artificial light. Motion sensors will be linked to all internal lighting to keep electricity use to a minimum. The orientation of the buildings will also limit the need for air conditioning, making the buildings more energy efficient. “As for water, we estimate that up to 80% of the water to be used at the bus washing facility will be recycled,” explains Hill-Lewis. “We will harvest rain water from the roofs, and install water-wise toilets with water flow control.” Sustainable urban drainage systems in the form of permeable paving have also been incorporated at the large bus staging areas to allow for the replenishment of the underground water table. Local Benefits Quintas notes that local residents and subcontractors from the surrounding communities are set to benefit from the 32-month-long depot construction projects, through temporary employment opportunities and contracts. “Temporary employment and training opportunities to the value of at least R22-million will be available to local jobseekers. “Also, the contract between the city and the construction company stipulates that local subcontractors should be contracted to supply goods and services to the value of R40.8-million. “Thus, our local communities will have the opportunity to earn an income while this construction project is ongoing, and hopefully this injection will give them a foothold in the market,” says Quintas. The bus depots are set to provide a secure site where buses can be held while not operating; office administration facilities for the bus operating companies; facilities for drivers to rest and eat between shifts; as well as the infrastructure required for maintenance, refuelling and washing.
Municipal utilities and distributors will have to "provide more than one product" and will have to develop new services and business models to effectively serve the market, such as by reselling and wheeling power between producers and consumers. These are some of the views presented during the first in a series of webinars jointly hosted by municipal organisation the Association of Municipal Electricity Utilities (AMEU) and industry organisation the South African Institute of Electrical Engineers (SAIEE) on August 10 to prepare South Africa's energy utilities for the changes and disruptions, experienced worldwide, in the energy industry. "The current electricity distribution system in South Africa is no longer fit for purpose to provide sustainable, reliable power. Most energy systems work in an inflexible hub-and-spoke model, but growing renewable power, which is not dispatchable unless there is also affordable energy storage, is driving change," said AMEU strategic adviser Vally Padayachee. The way energy was used was also changing, as was the pattern of demand and supply, and the near-instant movement of energy made it extremely difficult to control from a distribution perspective. To avoid blackouts, there was a need to drastically improve the architecture of the system, he added during the 'Digital Municipal Distribution Utility of the Future' webinar. A study by US education institution the Massachusetts Institute of Technology showed that, with more distributed energy technologies, flexible demand is coming into the landscape and, in many cases, so are resources. Ubiquitous information and communications technology systems will also be needed. South Africa's municipal utilities and State-owned Eskom would have to accommodate these changes, especially to prevail in the face of the current electricity crisis, Padayachee said. "The power sector is in the midst of a transformation, hence the need for future-proofing. The power system is becoming more distributed and digitalised, and the resource mix is becoming more renewable and more integrated with other key sectors," he noted. Key success factors for utilities to provide services in the changing market include grid modernisation and adaptation to distributed energy resources, as well as the customer-centric evolution of the utilities. Flexible generation would also be important, as would new business models, underpinned by digitalisation, Padayachee highlighted. Flexible technologies would be focused on demand-side response, including flexible generation. Further, resilience and energy storage would play a greater role in future-proof utilities, he added. Meanwhile, the distribution sector was key to the transformation of the energy system and must take into consideration how distribution businesses must adapt and what shape a distribution business in the future would take, said Eskom Distribution senior manager Malcolm van Harte. "Key to the digital revolution is that data is king and the question is how to use data to transform for the new energy ecosystem," he said. Data will enable utilities to make better decisions and includes a large range of data, not only from utilities' equipment, but also from the broader market, to manage an electricity network more effectively. Similarly, there would be greater demand for data to manage virtual power stations, which were used as aggregated models for distributed generation, as power would be sourced from different locations, he added. "The intermittency of power sources poses a challenge to the distribution side of the energy system. There must be interoperability of multiple assets on the system and flexible resources and services. This means the amount of data consumed will be significant and how it is used will be critical for the distribution industry," Van Harte noted. Similarly, digital systems in the distribution industry will need to enable remote engineering, corporate governance and customer choice, as well as b...
The National Energy Regulator of South Africa (Nersa) says it has not approved an increase in the maximum price of pipeline gas to R133/GJ and insists that it “would not approve any increase which doubles its previously approved maximum gas price” of R68.39/GJ. It also insists that only Sasol Gas, which has confirmed that the 96% hike became effective from August 1, could respond to questions regarding the basis for the increase. Sasol Gas has indicated that it informed both Nersa and its customers that the price of piped gas sold in South Africa would increase to R133.34/GJ from the start of August. The company says it submitted the revised price to Nersa on May 29 together with a request that the regulator confirm that the price was in compliance with the 2021 Nersa Maximum Gas Price decision. “In its efforts to confirm its compliance, Sasol Gas also engaged with Nersa on several occasions after this submission,” the company tells Engineering News. Sasol says it has noted a media statement released by Nersa on August 4, in which the regulator states that it has not approved the “excessive increases in gas prices that have been announced by one of its licensees”. However, the JSE-listed group insists that the price increase is compliant with Nersa’s 2021 decision and has been determined using the approved calculation methodology prescribed in that decision. “Applying this approved adjustment method yields a maximum gas price of R273.43/GJ,” Sasol reports, adding that it did not pursue such an increase, owing to the negative implications for its customers. However, Nersa says the maximum price arising from its application of the methodology is “well below R100/GJ”, against which Sasol Gas is then expected to provide a discount in line with objectives stipulated in Section 22 of the Gas Act, of 2001. Nersa also insists that any increase above the R68.39/GJ approved is “tantamount to setting a new gas price” that is excessive, as only the Energy Regulator is permitted to approve maximum gas prices. The 2021 decision, Nersa asserts, was influenced by competitive market conditions that prevailed at the time, which it acknowledged pre-dated the subsequent international price shocks. It adds that the decision was subjected to a rationality test, wherein costs were considered. “Nersa has no information of gas costs that increased by 96% which justify a corresponding increase in the price.” However, while the Industrial Gas Users Association of Southern Africa (IGUA-SA) has been calling for a cost-based methodology, the current methodology is based on a benchmark of international gas prices associated with the US Henry Hub, the Dutch Title Transfer Facility and the UK National Balancing Point. Nevertheless, the regulator tells Engineering News that it is considering various options including: a new maximum price subjected to a rationality test prescribed in its methodology; an adjustment factor that is cost reflective; a legal route which seeks to set aside part of its decision and remit it to Nersa; an investigation and adjudication over excessive or unreasonable gas price increases. No timeframe was provide for the selection and implementation of the options under consideration. In the meantime, the IGUA-SA has described the hike as “untenable” and has warned of possible manufacturing cutbacks, as well as potential increases in those essential foodstuffs produced using gas. IGUA-SA calculates the hike will cost the South African economy R325-million a month and, thus, poses a risk to an already struggling and weakened South African economy. “On the one hand, businesses are facing closure across the manufacturing sector, whilst on the other hand it would appear that the gas industry is heading for a regulatory void from a Nersa gas-pricing perspective,” CEO Jaco Human says. He has called for an unambiguous response from Nersa, including the adoption of a methodology that uses Sasol’s cost base as the main reference point for setti...
South Africa’s Central Energy Fund (CEF) has completed its due diligence on its R1-billion investment in emerging integrated energy producer Renergen’s Virginia gas project. Marking a major step towards finalising the agreement between Renergen and the CEF, both parties have now started engaging with their respective stakeholders to obtain final approvals to complete the transaction. Renergen CEO Stefano Marani says the successful conclusion of the due diligence “signifies the strategic nature of the Virginia gas project and further marks another significant step forward in closing out the capital required for Phase 2 operations at Virginia”. He adds that the CEF’s involvement in the project brings with it “a wealth of experience” in upstream oil and gas exploration, midstream natural gas to liquids processing and large-scale pipeline operations and maintenance experience. “This will all assist in bringing a new and critical source of energy online, at a time where South Africa is suffering a significant energy crisis,” Marani notes. Commenting on the commissioning progress of Virginia ahead of the start of Phase 1 operations, Marani says that turning the plant for Phase 1 operations on is “a function of coordinating all the sites to turn on simultaneously, and importantly, the relevant teams are ensuring that all aspects of the operation will run according to design”. “We have no intention of rushing the process at this late stage and introducing risk. Since starting construction at Virginia prior to Covid, the total delays experienced in the context of several global macro events of the past two years could have been significantly worse had we not implemented several mitigations to reduce the overall impact on the project,” he adds, referencing the project’s delays over the past few years.
US Trade and Development Agency (USTDA) believes it is well positioned to feed projects into the Just Energy Transition Partnership (JETP), which was established between South Africa and several developed countries, including the US, in 2020, and which is expected to progress towards implementation later this year. The JETP includes an initial offer of $8.5-billion – to be provided by France, Germany, the US, the UK and the European Union – to help fund South Africa’s transition from coal to renewables, while protecting workers and communities reliant on the coal value chain. South Africa is currently working on an investment plan that will be made up primarily of projects in the electricity sector, but which will also include some electric vehicle and green hydrogen projects. The plan is expected to be approved ahead of the upcoming COP27 climate conference to be held in Sharm el-Sheikh, Egypt, in November. USTDA director Enoh Ebong tells Engineering News that the agency’s activities in South Africa, as well as the rest of the continent, are already largely aligned with the JETP, with feasibility studies being pursued, or technical support being provided, for renewable energy, smart-grid and battery storage projects in several countries. “So, we are well situated to feed projects into the initiative, with the view to mobilising some of that financing,” Ebong said during an interview in South Africa that coincided with a visit to the country by US Secretary of State Antony Blinken. In addresses made during his visit, Blinken emphasised the role that infrastructure could play in advancing the President Joe Biden administration’s new Africa strategy. Blinken said the US was committed to raising $200-billion towards the G7’s $600-billion ‘Partnership for Global Infrastructure’ and that it was already implementing projects that were focused on health, digital infrastructure, empowering women and girls, energy, and climate. “The way this infrastructure is built will reverberate for decades. “After all, we’ve seen the consequences when international infrastructure deals are corrupt and coercive, when they’re poorly built or environmentally destructive, when they import or abuse workers, or burden countries with crushing debts. “That’s why it’s so important for countries to have choices, to be able to weigh them transparently, with the input of local communities without pressure or coercion,” Blinken said in an address made in Pretoria in which he outlined the US’s new African strategy. Ebong met with the leadership of Eskom during her visit and confirmed that much of the discussion had focused on ways that American companies could support the management of South Africa’s transmission infrastructure, including through the use of artificial intelligence. The issue of clean energy, as well as transport and digital infrastructure, also featured prominently during the US-South Africa Strategic Dialogue, which was reconvened in Pretoria on August 8 for the first time since 2015 and which attracted over 50 US policymakers and officials. Ebong co-chaired a session on infrastructure with Dr Kgosientsho Ramokgopa, who is head of the Investment and Infrastructure Office in the Presidency. The issue of protecting the physical assets of the South African rail industry featured prominently along with the development of an inclusive digital infrastructure. Ebong indicated that the discussions were likely to stimulate future feasibility studies that the USTDA would fund to improve the portfolio of bankable projects in South Africa and into which American firms are likely to bid to provide goods and services. “I think that South Africans should look to more projects being announced and grants signed as a result of these discussions.” The agency spends about $24-million yearly in Africa to support feasibility studies, to provide technical assistance and to conduct reverse trade missions, with a green-hydrogen focused mission to be hosted in the US...
The Industrial Gas Users Association of Southern Africa (IGUA-SA) has described as “untenable” a 96% hike in the gas price by Sasol and has called on the energy regulator to intervene urgently to address what it describes as Sasol’s monopolistic behaviour, as well as to prevent manufacturing cutbacks and socioeconomic distress. Sasol confirms that the price of piped gas sold to its South African customers has been increased to R133.34/GJ, effective from August 1, but insists that it has shown restraint in holding back from applying the maximum price allowed under the prevailing methodology for setting domestic gas prices. “This gas price was determined using the approved calculation methodology prescribed in the 2021 National Energy Regulator of South Africa (Nersa) Maximum Gas Price Decision for Sasol Gas. “Applying this approved adjustment method yields a maximum gas price of R273.43/GJ,” Sasol tells Engineering News. The price change, Sasol adds, reflects the cyclical nature of gas and other commodity prices’ response to inflationary pressures on operating costs, an increase in gas exploration and development activities and funding requirements to ensure security of supply. However, IGUA-SA CEO Jaco Human warns that the hike is set to cost the South African economy R325-million a month and could trigger both manufacturing cutbacks and retail price hikes. He notes that industry members reliant on gas energy to produce bread and other foodstuffs will have little choice but to significantly increase prices, exacerbating an already intensifying cost-of-living crisis. “Gas energy price increases of 96% are untenable and pose a significant risk to an already struggling and weakened South African economy. “On the one hand, businesses are facing closure across the manufacturing sector, whilst on the other hand it would appear that the gas industry is heading for a regulatory void from a Nersa gas-pricing perspective,” Human adds. IGUA-SA has been at loggerheads with Nersa over the gas-price methodology for years and in December last year lodged an application in the Gauteng division of the High Court challenging Nersa’s 2021 approval of Sasol Gas’ maximum gas prices. At the time, the industry body warned that gas prices could rise by 220% by August, from R68/GJ rising to more than R217/GJ. IGUA-SA has also made repeated call for Nersa to adopt a methodology that uses Sasol’s cost base as the main reference point for setting the price. In 2019, the Constitutional Court declared a previous maximum-price formula – calculated using a reference basket of alternative fuels – to be irrational and unlawful. Nersa then adopted a new formula, which uses a benchmark of international gas prices associated with the US Henry Hub, the Dutch Title Transfer Facility and the UK National Balancing Point. However, IGUA-SA argues that the new formula is yielding an outcome that is even higher than those that emerged from the alternative-fuels basket, and well above those that prevailed during the decade-long “grace period” from 2004 to 2014, when Sasol Gas was regarded as an “unconstrained monopolist”. Human called for an unambiguous response form Nersa which, on August 4, noted that it had not approved Sasol’s hike and that it would investigate any possible unreasonable or excessive pricing cases. “Sasol’s unilateral implementation of a 96% gas price increase further confirms its actions as a monopolist. “Nersa cannot simply hope and expect Sasol, as a monopolist, to act as a free-market player and price gas at competitive market levels,” Human argues. However, Sasol says the revised price was submitted to Nersa by Sasol Gas on May 29, together with a request to confirm that the price was in compliance with the 2021 Maximum Gas Price decision. “In its efforts to confirm its compliance, Sasol Gas also engaged with Nersa on several occasions after this submission,” the JSE-listed company says, adding that it believes the piped-gas price being impleme...
Following the August 7 launch of the South African National Roads Agency Limited- (Sanral-) led Vala Zonke programme, which aims to tackle the thousands of potholes on roads across the country, Sanral engineering executive Louw Kannemeyer has told Engineering News the hope is to deal with most of the existing potholes within six months. “The immediate focus is the repair of open potholes, because that is what is damaging tyres, rims and causing accidents. We are hoping to move into the preventive maintenance phase in six months from now,” he added on August 8. The preventive maintenance phase would involve maintaining and controlling roadside vegetation and clearing drainage systems to prevent flooding, as well as sealing cracks before water can get in and applying diluted emulsions across the road surfaces to waterproof them better. “We are starting with potholes, but the long-term aim is to drive effective preventive maintenance at all authority levels,” he explained. At the launch of the programme, Transport Minister Fikile Mbalula appealed to provinces, municipalities, the private sector and the general public to support the campaign, which will also be known as operation Kwala Kaofela in Sesotho – which roughly translates to “close them all”. The campaign to fix potholes, which was launched on the R57 in the Emfuleni local municipality in the south of Johannesburg, will be led by Sanral, acting as an agency of the Department of Transport (DoT). Sanral will be working closely with provincial and municipal roads departments to roll out the programme, which will be enabled through a mobile phone application (app) that will allow members of the public to report potholes. Kannemeyer explained that Sanral was leading the programme because it already had the technology in place. With some minor adjustments to the coding for a negligible cost, the existing Sanral pothole reporting app could be tweaked to include reporting capabilities for municipal roads as well. Most open potholes are found on municipal and provincial roads, while national roads managed by Sanral remain largely pothole free because of Sanral's policy of fixing reported potholes within 48 hours. This is enabled by Sanral’s app, which will now be rolled out on provincial and municipal levels to hopefully achieve the same results. “This is an important campaign that will make a huge difference in the lives of many South Africans. It will change the face of our municipal and provincial roads from pothole-riddled to an acceptable state of repair. This launch will be replicated across the country with Premiers and MECs leading provincial launches in all nine provinces,” Mbalula said. He added that “the reality of potholes hit home” for him when he undertook an inspection of the N12, in Wolmaransstad, in the North West province earlier this year. “This is the reality of many communities in all our provinces. The bad roads, caused mainly by potholes, are one of the major hindrances to economic growth,” he said. He also said service delivery was often hampered by corruption. “Corruption not only eats into the social fibre of our society, but it also impacts on the integrity of the work that government does to deliver services . . . Often, the money is spent and the work is not done, but some civil servant or politician has become rich. To prevent corruption, operation Vala Zonke must contain consequence management measures. Where there is corruption, it must be dealt with decisively,” Mbalula said. He noted that the maintenance challenges and backlog in South Africa’s road network had to start with putting measures in place that would halt the deterioration of the country’s roads. “Attending to potholes as soon as possible after they occur is the most effective way to arrest this decline,” he said. The Vala Zonke app will work in conjunction with Sanral’s pothole management app and will allow the public to raise any issues, upload pictures of potholes, and provide a r...
State-owned electricity utility Eskom has confirmed that Unit 2 at the Koeberg nuclear power station was returned to service at 20:24 on Sunday, August 7. “The unit is currently loading and will require about ten days to reach full output,” spokesperson Sikonathi Mantshantsha confirmed in an emailed response to an Engineering News enquiry. The 920-MW unit was shut for refuelling and extended maintenance on January 18 and was initially scheduled to return to service in June. The extended maintenance was also meant to have included the replacement of three steam generators, but the replacement was deferred to August 2023 following an assessment, conducted together with Framatome, which concluded that Eskom was not ready to implement the project. The deferral did not lead to any shortening in the duration of the outage, despite the fact that it accounted for one stage of load-shedding every time the utility has resorted to rotational power cuts since January. The outage coincided with the most intensive period yet for load-shedding, with Eskom having even resorted to Stage 6 cuts during a wildcat strike in late June and early July, which affected a number of its coal stations. Despite the smaller scope of the shutdown, the date for returning Unit 2 to service was initially shifted to mid-July, then the end of July and finally into August. The steam generator replacement (SGR) programme is also key to Eskom securing a Long-Term Operations licence from the National Nuclear Regulator (NNR) to extend the life of the plant by a further 20 years. The licence is currently due to expire in July 2024. The application to extend the operational life was submitted by Eskom on May 10, 2021, and accepted by the NNR for further processing on August 17, 2021. On July 26 this year, the NNR confirmed that Eskom had submitted the safety case in support of its application to extend Koeberg’s operational life. The replacement of the Unit 1 steam generators, meanwhile, is still planned to take place during the unit’s upcoming extended maintenance, scheduled for December. However, concerns have already been raised about Eskom’s readiness for that outage. These concerns coincide with major changes to the leadership at Koeberg, with Eskom announcing in early July that Mahesh Valaitham would act as Koeberg power station GM, owing to the fact that the current acting GM, Nomawethu Mtwebana, had been selected to join the World Association of Nuclear Operators, which is based in the US, as a reverse loanee for the next year. In addition, Eskom chief nuclear officer Riedewaan Barkadien departed the organisation at the end of July, with Keith Featherstone acting in the position while a recruitment process was undertaken. COO Jan Oberholzer has stated previously that the deferral of the Unit 2 SGR programme was “not ideal”, as it would not take place close to the expiry of the unit’s licence. “[The delays have] unfortunately created a situation that we are cramping what needs to happen for the long-term operation of Koeberg right until the end, and that means that the risk obviously is increased.”
Ever since global inflation started heading north at an alarming rate, much of the conventional wisdom on the causes of this trend has pointed to energy prices, especially gas, oil and petroleum, says Dr Roelof Botha, economic adviser to the Optimum Investment Group. Also, when analysing the composition of the basket of goods and services that form the basis for the calculation of the consumer price indices (CPIs) in South Africa and most of its key trading partners, these prices certainly stand out, as do some food prices, he adds. However, when comparing the current upward phase of the commodity price cycle during the first six months of the year with the previous surge in prices that was recorded between 2011 and 2013, it becomes clear that oil is not the culprit. Rather, it is the cost of shipping commodities such as oil, petroleum and all other traded goods from one port to another that is to blame, notes Botha. “Oil from Saudi Arabia has to travel almost 10 000 km before it reaches the Port of Cape Town.” Logistics data tracked by the United Nations Conference on Trade and Development estimates that the oceans carries more than 80% of the world’s traded goods by volume and 70% by value, most of which sail inside 40-foot-long steel containers. There are dozens of container ships that are the length of four soccer fields and the world’s largest one, the Ever Alot, is the height of a 22-story building and can carry 240 000 t of cargo. The ongoing supply chain disruptions caused by the Covid pandemic and now exacerbated by the Russian invasion of Ukraine, have provided a stark reminder of the strategic economic importance of maritime container trade, says Botha. “The lockdown restrictions induced by the pandemic not only blocked supply chains in ports around the globe, but it also did so in an errant manner. “When one port reopened, some of its destination ports had been closed and this pattern kept on repeating itself for the better part of two years.” Since the gradual demise of harsh lockdowns, pent-up demand from economic stimulus programmes was simply too much to handle. The results were fairly predictable, namely long delays in getting goods to customers and an increase in the cost of getting them shipped. However, the extent of the cost increases caught the whole world by surprise, says Botha. Ultimately, too few ships and an explosive recovery of demand conspired to send freight costs into orbit, with the Statista Freight Rate Index (SFRI) increasing from $1 262 a container during the third quarter of 2019, to $10 362 in the third quarter of 2021 – an unheard of increase of 721%. The cost of shipping bulk commodities spiked even more, notes Botha. Research by the International Monetary Fund (IMF) shows that the inflationary impact of these higher shipping costs is not likely to recede before the end of the year. A little bit of good news is the fact that shipping costs have come down since the fourth quarter of 2021, with the SFRI standing at $7 051 at the end of June this year. Research by the IMF confirms that the trend of rising shipping costs has affected inflation in some countries more than others, says Botha. In general, countries with a high import propensity and a relatively high trade deficit are bound to witness larger increases in inflation, while land-locked countries and low-income countries are also likely to see a higher turning point for their respective CPIs. This correlation provides a hint to South Africa’s current CPI, which is significantly lower than that of many of its key trading partners, notes Botha. South Africa is classified as an upper-middle income country and has experienced record trade surpluses since 2020. Despite a need to enhance their efficiency, the country also has six major commercial ports. No To Higher Interest Rates An understanding of the nature and causes of both domestic and global inflation is crucial for the determination of appropriate monetary and fiscal policy re...
Request for proposal (RFP) documentation for private sector participation in the container terminals at the ports of Durban and Ngqura will be issued this month with the goal of having partnerships in place by January 2023, Finance Minister Enoch Godongwana reports. Delivering Operation Vulindlela’s latest progress update, Godongwana described the RFPs as a major step forward in enabling experienced international terminal operators to invest in the expansion of infrastructure and improve the management of port operations. The bidding process follows a market-testing process whereby private operators where asked to respond to a request for information relating to the Durban Container Terminal (DCT) Pier 2 operation, as well as the Ngqura Container Terminal (NCT). Both DCT Pier 2 and NCT have been operating well below their nameplate capacities of 2.4-million twenty-foot equivalent units (TEUs) and 1.3-million TEUs respectively. The Operation Vulindlela report also highlighted progress being made in opening Transnet Freight Rail’s (TFR’s) network to third-party operators, noting that bidding for an initial 16 slots on the Durban-City Deep and Pretoria-East London lines would close at the end of August. “It is important to recognise that this is only the first step in enabling third-party access to the freight rail network,” Godnongwana said. He added that the passage of the Economic Regulation of Transport Bill in the coming months would establish an independent Transport Economic Regulator to enable nondiscriminatory access to the network beyond these slots. The Presidency’s project management office head Rudi Dicks said that Operation Vulindlela was aware of market concerns about the design of the slots sale, including the fact that these were limited to a two-year period. However, he indicated that TFR had hosted several engagements with potential bidders to discuss their concerns, during which 19 potential operators had expressed an interest in the slots. He said it was premature to say how many of those companies would enter a bid. Godongwana stressed that the logic of the port and rail reforms was to sustain State ownership, “while encouraging and enabling competition in operations to improve efficiency and leverage private sector investment”. “During the next quarter, we will prioritise reforms in the transport sector with the same degree of urgency with which we have responded to the energy crisis during the previous quarter,” the Minister added.
Minister in the Presidency Mondli Gungubele says the reforms under way in the electricity sector – including the removal of the 100 MW licensing threshold for distributed generation projects and the expedited procurement of new capacity from renewables, gas and battery storage – will “supercharge our efforts to modernise and transform the electricity sector”. “Most importantly, these changes will create the conditions for a boom in private fixed investment in the coming years, which will lift our economic growth overall,” Gungubele said during the release of Operation Vulindlela’s latest progress update. “Construction of new energy projects and associated economic activity will create jobs, while increased energy security will encourage even further investment across the economy,” he added. The Presidency’s project management office head Rudi Dicks said that the “swift and full implementation of the energy action plan” unveiled by President Cyril Ramaphosa on July 25 would be prioritised by Operation Vulindlela during the current quarter. He reported that Operation Vulindlela would work with the recently established National Energy Crisis Committee (NECOM) to ensure implementation of the plan, which seeks to facilitate a significant improvement in the operation of Eskom’s fleet and support the introduction of private generating capacity. The report outlined nine electricity reforms that would receive priority attention before the end of the year, including: overseeing financial close of Bid Window 5 (BW5) renewables projects between August and September, with the end of July deadline for the close of the first 14 projects having been missed; receiving proposals in September for BW6, which has been enlarged from 2 600 MW to 5 200 MW; the issuance of a request for proposals for battery storage also in September; amending, between September and October, Schedule 2 of the Electricity Regulation Act to remove the 100 MW licensing threshold for embedded generation; tabling, in September, special legislation in Parliament to reduce or remove red tape; establishing a one-stop shop for all energy-related applications during August and September; appointing, in August, a board for the transmission entity being unbundled from Eskom; completing, by December, the unbundling of the Eskom generation and distribution entities; and introducing, during September, the Electricity Regulation Amendment Bill to Parliament. Gungubele said that electricity reforms had been prioritised during the second quarter and would remain a key focus given that load-shedding remained the largest impediment to growth and investment in the South African economy. Operation Vulindlela is overseeing 26 structural reforms in total across the energy, transport, telecommunications, water and tourism sectors. Finance Minister Enoch Godongwana said that nine reforms had been completed, while another 11 were “progressing well”. “A minority of these reforms, such as improving Eskom’s energy availability factor and completing digital migration, are not on track. “As demonstrated with the formation of NECOM, however, we are taking decisive action to get these reforms on track as quickly as possible,” Godongwana said.