Engineering News Online Audio Articles

Electricity and Energy Minister Dr Kgosientsho Ramokgopa says 4 600 MW of battery energy storage systems (BESS) and 5 000 MW of gas-to-power (GtP) have been prioritised in a new Ministerial determination that opens the way for new public-procurement bidding rounds.

He has also confirmed that the procurement processes facilitated by the determination will be implemented by the Independent Power Producer Office (IPPO) and be open to all market participants, including Eskom.

The State-owned enterprise has hitherto been excluded from bidding in public procurement rounds, but has stated GtP ambitions and is in the process of incorporating Eskom Green as a subsidiary to partner with private entities on new renewables and BESS projects.

Eskom is currently in the process of prequalifying partners for a 6 GW Eskom Green pipeline that includes BESS projects with a capacity of 1 000 MW/4 000 MWh.

No energy storage figure was immediately provided for the 4 600 MW of BESS outlined in the determination, and no capacity factor for the GtP plants was immediately disclosed.

The Section 34 Determination, which is being published in line with the Electricity Regulation Act, also makes no provision for new wind or solar capacity, much of which is currently being procured by private companies on the basis of bilateral power purchase agreements.

However, the Minister said there would be a subsequent determination that would include new variable renewables capacity, as well as hybrid renewables-storage projects and pumped storage.

SYSTEM PRIORITIES

Ramokgopa indicated that the front-loading of BESS and GtP procurement had been informed by priorities outlined by the System Operator, which had identified a need for greater flexibility and for dispatchable plants.

It is also a response to a material increase in curtailment, which is implemented by the System Operator when available generation cannot be accommodated because of network constraints or operating conditions, including periods when supply exceeds demand.

Ramokgopa indicated that BESS was central to seeking ways to address curtailment and the associated rise in compensation payments by the National Transmission Company South Africa (NTCSA) to renewables independent power producers selected during previous public procurement rounds.

Batteries, he said, could charge from electricity that would otherwise be curtailed and discharge during evening peaks or other periods of need.

PROCUREMENT TEMPLATE

He added that South Africa already had a template for procuring BESS, pointing to the approach taken by the IPPO, which had to date conducted three bidding rounds for BESS based on substation sites selected by the NTCSA.

A total of 1 744 MW/6 976 MWh of BESS has been procured to date, and all five projects from the first bidding round, involving 513 MW/2 052 MWh and combined investments of more than R15-billion, have advanced to construction. The 4 600 MW outlined in the determination represents a significant scale-up, however.

South African Energy Storage Association (SAESA) chairperson Joanne Dean immediately welcomed the Minister's recognition of BESS within South Africa's future procurement programme.

She said that BESS could strengthen grid stability and resilience, defer costly transmission and distribution upgrades, facilitate higher penetrations of renewable generation and create opportunities for manufacturing, localisation and skills development.

"Storage is increasingly becoming the infrastructure that connects generation, transmission, distribution and demand into a modern electricity system," she added, arguing that SAESA believed that energy storage should be recognised as a strategic sector in its own right, rather than as a supporting component of wind and solar projects.

Meanwhile, Ramokgopa said the 5 000 MW GtP allocation would complement storage by providing dispatchable electricity when renewable output fell or demand rose.

He indicated that the procurement design would address ...

State-owned electricity group Eskom, which is in the process of creating a renewable-energy subsidiary known as Eskom Green, has formally initiated a process to select partners for the financing and implementation of up to 6 GW of utility-scale renewable-energy and battery projects by 2030.

A request for qualification (RFQ) invitation has been released as part of a two-stage procurement process, with the second to involve a request for proposals (RFP) process involving the qualifying entities.

Released on October 2, the invitation has been issued by Eskom Holdings, but the State-owned enterprise indicates in the document that it intends transferring any transaction agreements to Eskom Green once it is incorporated.

Eskom Green, the RFQ states, is designed to operate as a commercially viable and investable renewable-energy platform, capable of mobilising private and public capital at scale through project-financed special purpose vehicles and strategic partnerships.

Through the RFQ process Eskom aims to identify entities for the establishment of a panel of pre-qualified co-development and co-investment partners for what Eskom terms the 'Phase 1 Programme or the Projects' with a combined capacity of up to 6 GW.

The projects themselves are not identified, but Eskom indicates that they have been drawn from a larger internal pipeline of solar PV, wind and/or battery storage projects with a combined capacity of 14 GW.

It adds that the associated sites, land rights, environmental authorisations and grid connection points are at varying stages of maturity.

Besides this pipeline, Eskom says it will also offer partners access to decades of power generation skills and expertise, efficient routes to market and offtake structuring, improved bankability, and access to private and concessional capital.

"In return, Eskom pursuant to the RFP process in due course, seeks a strategic partner who will bring proven development, financing and construction capability and who will support skills transfer and the building of Eskom's internal capability, once operational."

Eskom says the Phase 1 Programme is aligned to the Integrated Resource Plan of 2025 which envisages 105 GW of new generation capacity by 2042, and Eskom's ambition of achieving up to 32 GW of new renewables generation capacity by 2040.

Respondents to the RFQ are entitled to participate as a single entity or as a consortium, and Eskom states that it intends to introduce broad-based black economic empowerment participation at the RFP stage.

A non-compulsory clarification meeting has been scheduled for 11:00 on October 15, and the closing date for responses to the RFQ is 10:00 on November 16.

Procurement Framework?

The RFQ indicates that revenue under the Phase 1 Programme will be generated principally through long-term, bilateral private-market power purchase agreements with creditworthy counterparties.

However, it adds that revenue may also be derived from electricity sales under procurement programmes established pursuant to Ministerial determinations made in terms of Section 34 of the Electricity Regulation Act and associated offtake arrangements.

The RFQ was issued ahead of the release of a new Section 34 Determination by Electricity and Energy Minister Dr Kgosientsho Ramokgopa that will outline the additional generation to be procured between 2026 and 2037.

Under the Electricity Regulation Act, such gazetted determinations enable the procurement of new energy generation capacity.

In the renewables sector, the public procurement rounds that have arisen hitherto in response to such determinations have excluded Eskom and focused on opening the market to independent power producers.

However, on several occasions, Ramokgopa has argued that Eskom needs to play a role in the renewables sector, while Eskom chairperson Mteto Nyati has described the utility's exclusion from the renewables market as a "wrong decision".

Following his recent reappointment, Nyati indicated that, under the so...

South Africa's new-vehicle market continued its positive run as sales increased by 12.7% in September, to 61 645 units, compared with the same month last year.

Passenger-car sales rose by 14.7%, to 44 291 units, with 18.4% of this number entering the car-rental market, reports naamsa | The Automotive Business Council.

Light commercial vehicle sales – bakkies, panel vans and minibuses – moved up by 9.6%, to 14 361 units.

Medium commercial vehicle sales expanded by 3.4% in September, to 789 units, while heavy truck and bus sales inched down by 25 units, to 2 204 units.

Export sales, largely from South Africa's six vehicle manufacturers, plummeted by 18.8% in September, to 31 4723 units.

The September numbers saw the domestic market complete a strong third quarter, with local sales reaching 177 251 units, up 15.4% from the second quarter and up 12% from the corresponding quarter last year.

"September's results are encouraging, and the stronger third-quarter gives dealers and manufacturers a positive foundation for the final months of the year," says National Automobile Dealers' Association chairperson Brandon Cohen.

"The opportunity now is to sustain that momentum by matching the vehicles and finance options available to what customers need and can afford."

For South African households, September's sales results come amidst continuing pressure on monthly budgets.

The latest available consumer inflation figures showed yearly inflation of 4.4%.

The Reserve Bank's subsequent decision to raise rates by 25 basis points to 7.25%, effective September 25, renders affordability a significant consideration for the months ahead.

The late-month timing means September's sales figures will not yet demonstrate the full effect of the rate hike on purchasing decisions, notes Cohen.

"Affordability is measured in rands available at the end of each month."

This month's higher fuel costs may encourage even more buyers to consider hybrids and plug-in hybrids, he adds.

According to naamsa, new-energy vehicle sales – hybrids, plug-in hybrids (PHEVs) and battery electric vehicles (BEVs) – reached 18 945 units during the first eight months of this year – a number which already exceeds the 16 703 units sold throughout last year.

Particularly noteworthy has been the acceleration in rechargeable technologies, adds the industry body.

By August this year PHEV sales had reached 6 919 units compared with 2 810 units during the whole of 2025, while BEV sales reached 2 622 units compared with 1 088 units for full-year 2025.

What The Money Tells Us "September's performance shows that demand for vehicles remains resilient, even as consumers face higher borrowing costs and renewed pressure from fuel and other living expenses," comments FNB and WesBank senior economist Thanda Sithole.

"What is particularly encouraging from a financing perspective is that WesBank's application data also indicates continued demand, with new-vehicle finance applications growing year-on-year."

The average new-vehicle finance deal was also smaller than a year ago, while the average used-vehicle deal was larger.

Contract terms have also lengthened, particularly for new vehicles, while a greater proportion of customers opted for fixed-rate finance, providing greater certainty around monthly repayments as interest rates change.

Balloon payments featured in fewer deals.

"The application trends suggest that customers are not stepping away from the market in response to affordability pressures; they are adjusting how they structure their vehicle purchases," says Sithole.

"For consumers, the focus is increasingly on managing the total cost of ownership and finding a finance structure that provides greater certainty over the life of the agreement."

Engineering News editor Terence Creamer discusses the latest developments with regard to the unbundling of the National Transmission Company South Africa from Eskom and the Transnet National Ports Authority from Transnet, as well as how the developments fit into the broader refor

The South African government has announced a delay to Phase I of the country's inaugural independent transmission projects (ITP) procurement programme, indicating that the final request for proposals (RFP) is now targeted for release in the second quarter of the 2027 calendar year.

The Department of Electricity and Energy and the National Treasury, which are driving the procurement being implemented through the Independent Power Producer Office, had previously indicated that the RFP would be released by no later than the third quarter of the 2026 calendar year.

In a joint statement, the two departments said that, following the first round of engagement with the seven ITP pre-qualified bidders (PQBs), it was decided that further consultations would be undertaken before the issuance of the RFP.

The seven companies eligible to participate in the RFP phase were identified in December as including:

the Adani Power Middle East–Momentous Energy Consortium, led by Adani Power Middle East, based in the United Arab Emirates; the AREF Cobra Transmission Consortium, led by the South African arm of Grupo Cobra, of Spain;Consortium Pulse Infrastructure, led by Celeo Redes, of Spain;the EITP Consortium, led by Okavango Projects SA;the State Grid Consortium, led by the State Grid International Development Company, of China;the Hyperion Consortium, led by the South African arm of French multinational EDF; andthe Transmission Africa Consortium, led by China Southern Power Grid International.

The companies have been prequalified to bid to build 1 164 km of power lines and associated substation infrastructure across seven preselected corridors. The projects are expected to have a combined investment value of about $1-billion.

"A second draft RFP package will be issued to the seven PQBs before the end of 2026.

"The package will reflect the significant work undertaken since the first draft RFP and will provide bidders and their lenders with a further opportunity to identify any remaining material bankability issues," the statement reads, stressing that the consultations were not intended to reopen the transaction for general comment.

"Its purpose is to provide PQBs with a substantially complete and coherent transaction package so that issues that could materially affect bid submission, financing or financial close can be identified and addressed before the documents are finalised."

The second draft package would also be accompanied by a draft non-binding term sheet for the Credit Guarantee Vehicle (CGV), which was being established with the support of the World Bank Group to enable the ITPs to proceed in the absence of a government guarantee.

The statement confirmed that a Joint Development Agreement between National Treasury and FSD Africa was signed on July 2 to support the operationalisation of the CGV, while the Development Bank of Southern Africa was hosting the Project Implementation Unit responsible for supporting its development and operationalisation.

"The governance arrangements for the CGV have been established, including a project team, Steering Committee, Caretaker Board and Advisory Board.

"The CGV was registered and incorporated on 12 August 2026, with its statutory directors, auditor and corporate secretariat appointed," the statement reads.

The National Treasury is also approaching prospective capital investors, with investor due diligence under way to provide prospective investors with the information required to progress their investment proposals.

"The licensing process is under way following submission of the licence application to the South African Reserve Bank's Prudential Authority, while recruitment and development of the CGV's operating policies and procedures are progressing in parallel."

The departments reported that a draft non-binding CGV term sheet had been developed and would be aligned with the wider ITP transaction architecture, including the regulatory cost recovery framework, risk allocation and ring-fencing a...

The National Transmission Company South Africa (NTCSA) reports that it will establish an internal, yet ring-fenced, market surveillance unit as a safeguard against any abuse of dominance within the yet-to-be-launched South African Wholesale Electricity Market (SAWEM).

SAWEM is scheduled to begin operating in April 2027, with Eskom Generation set to be by far the dominant market participant at its launch.

Some 30 Eskom Generation power stations are already actively trading on the platform, with Eskom Distribution as the offtaker.

But the market's formal launch was delayed from April 2026 to provide time for the finalisation of the market code, as well as other regulatory requirements, such as the vesting contracts.

Speaking during a Creamer Media webinar, NTCSA's Andrew Etzinger said that the creation of market-surveillance capacity was a condition set for NTCSA by the regulator when it approved its Market Operator licence.

However, he indicated that he was in favour of such capacity also being developed outside of NTCSA to add additional safeguards and to address concerns raised over NTCSA playing the role ahead of its unbundling from Eskom Holdings.

Besides the National Energy Regulator of South Africa, Etzinger said it might also be desirable for the Competition Commission to have access to the market information to enable it to analyse whether any abuse of dominance was taking place.

He said that within the Southern African Power Pool, the role was currently played by a single individual working behind a locked office door in Harare, Zimbabwe, who treated the information from his trading-desk colleagues with deep suspicion.

Similar qualities would be required within the unit being set up at the NTCSA, which envisaged the establishment of a "properly capacitated" team.

Etzinger was of the view that, even if similar capacity was developed externally, it would be in the interests of the Market Operator to have effective surveillance capacity able to blow the whistle on any signs of abuse.

Meanwhile, Etzinger also reported that various other activities were under way to establish the Market Operator in anticipation of SAWEM's launch, and while Nersa finalised the various regulatory mechanisms required for its operation.

"The system development itself for the platform is ongoing. We've got a whole bunch of IT and cybersecurity and process experts working very hard to get the platform up and running, and we are just about there," he reported.

The Creamer Media webinar was facilitated by Brian Day of 2Day Innovation and addressed by NTCSA's Andrew Etzinger, SAPVIA's Dr Rethabile Melamu, NOA's Robyn Reinhardt, Partners in Performance's Alastair Muller, and the Energy Council of South Africa's Cornel Claassen. It can be viewed on Creamer Media's YouTube channel. Look out for additional reporting in the Engineering News & Mining Weekly magazine.

State-owned power utility Eskom says it has sufficient capacity to accommodate the current growth in electric vehicle (EV) sales, buoyed by surging oil prices, but points out that low-voltage residential networks will, most likely, pose a future challenge.

Speaking at the Africa E-Mobility Week 2026 held in Stellenbosch this week, Eskom business development and distribution division senior manager Aletta Mashao said Eskom's energy planning department had already started "a few years ago" to incorporate EV sales in its planning.

"As it stands currently, for the next ten years, in the short to medium term, we'll have enough capacity."

Mashao pointed out, however, that low-voltage networks, especially those supplying electricity to residential customers, would, most likely, present a future challenge.

She said Eskom was able to work with commercial fleet customers to plan around their EV needs.

"But, with residential customers, we don't know where the EVs and charging stations are. These [low-voltage] networks were not designed to accommodate that type of load. The biggest appliance in the home has always been the geyser, and now you have a home charger."

As EV adoption was still low at this point, this lack of knowledge did not yet present a problem, noted Mashao.

It could, however, become an issue as EV adoption accelerates.

"So, we need to know where each charging station is in residential areas so that we can include this in our network development plans.

"If we don't plan for it proactively in low-voltage networks, we might end up in a situation where we have to limit the load or reduce the load because of EV charging."

Mashao said this planning needed to happen in partnership with municipalities.

She noted that Eskom also aimed to secure support in developing regulations around EV home chargers.

"The chargers should be smart chargers, and they should be visible so that they can be remote controlled.

"We need support from policy makers so that we can get regulations that can ensure that all home chargers are smart chargers."

Mashao said this did not imply the registration of home chargers with Eskom.

"Vehicle manufacturers – OEMs – can assist us with this information. We hope to work with OEMs in the future so that we'll know where EVs are going – within the limits of the Protection of Personal Information Act."

Mashao added that Eskom would also need to incorporate charging station operators and the South African National Roads Agency in its planning as the use of EVs on the country's freeways grew – especially in terms of long-distance trucking.

"They are looking at megawatt charging stations that require a lot of capacity, and this is not currently available along the national roads."

EV Charging Tariffs Mashao said there was currently no EV-specific charging tariff in South Africa.

She noted, however, that the development of these tariffs was necessary to reduce any potential impact on the electricity network.

"If everybody charges at the same time, we won't be able to manage the impact on the network.

"Time-of-use tariffs, or dynamic tariffs, can help so that people charge in off-peak hours.

"It is important to prioritise the development of these tariffs. From Eskom's side the work has already started," said Mashao.

Public Charging Eskom decided to decarbonise its fleet of 10 000-vehicles-plus about five years ago, noted Mashao.

The utility started with 20 EVs and ten charging stations, with the current numbers at 100 EVs and 105 charging stations.

"We are moving towards public charging now as well, with 19 of these charging stations public charging stations."

Cabinet has mandated Transnet National Ports Authority (TNPA) to investigate the feasibility of one of the country's development finance institutions (DFIs) becoming a minority equity partner, after endorsing its full separation from the Transnet group.

Minister in The Presidency Khumbudzo Ntshavheni indicated that the option of including a DFI as a shareholder was discussed by Cabinet at its latest meeting, which included an update on the implementation of reforms aimed at improving the competitiveness of South Africa's freight and logistics system.

Cabinet, she said, supported the separation of TNPA so that it could operate as a stand-alone company owned directly by the State.

Cabinet also decided that TNPA's separation should be implemented using the following principles:Fair compensation for Transnet based on an independently assessed valuation of TNPA;Ensuring long-term financial sustainability and an equitable allocation of liabilities to both the Transnet group and TNPA;The protection of employees and customers;The preservation of strategic State ownership and control of national ports infrastructure; andImproving investment capability and infrastructure development.

The vertical separation and corporatisation of TNPA, which develops and maintains the infrastructure at the country's commercial ports while providing key marine services, has been delayed for a number of years.

Nevertheless, it has also been flagged as important for levelling the playing field for private and public terminal operators and for ensuring that its revenues are reinvested in the ports rather than used to cross-subsidise other Transnet entities.

No timeframe for the separation was provided in the Cabinet statement, nor was the identity of a possible DFI shareholder. However, the Development Bank of Southern Africa has a public infrastructure mandate.

The South African National Roads Agency Limited (Sanral) has confirmed that it will not meet the November 30 target deadline for the award of 241 routine road maintenance (RRM) tenders with an estimated combined value of R9.5-billion.

The deadline was set after court rulings that found Sanral's previous RRM procurement processes to be unlawful.

Following a self-review by Sanral of awards made in relation to a tender to appoint a national panel of only 20 contractors, the court declared in July that the tender awards were unlawful and unconstitutional.

In addition, its appointment of a panel of engineering consultants was set aside earlier this year after being legally challenged by losing bidders.

Sanral subsequently reverted to its traditional procurement model premised on open, route-by-route tenders.

In the interim it also extended existing RRM contracts until November 30 to keep routine maintenance running while open route-by-route tenders were issued and adjudicated.

The State-owned entity is currently pursuing 132 RRM contractor and 109 consultant tenders on a staggered basis.

The first tenders for consultants were issued as from August 14, followed by the first contractors' tenders as from September 11.

Acting CEO Lehlohonolo Memeza confirmed that the November 30 target date would not be met during a fractious briefing of the Portfolio Committee on Transport.

Sanral, she said, would also be approaching the courts for permission to extend some existing RRM contracts on a month-to-month basis.

Members of the portfolio used the briefing to raise various concerns over the performance of Sanral, while also acknowledging that Memeza herself was new to the role.

She was appointed to act in the position pending the appointment of a permanent CEO, after Reginald Demana stepped down as CEO at the end of August.

Lawmakers expressed concern over the quality of the information provided during the briefing, highlighting discrepancies between figures presented when compared with previous communication from Sanral, including replies to official parliamentary questions.

They also raised questions about the lack of detail in relation to consequence management at the State-owned entity and argued that there was insufficient clarity regarding the timeframe for completing an investigation into the appointment of the Moriel Infrastructure Group.

The company's executive chairperson, Lawrence Mudzinganyama, was filmed recently making violent threats against a women at a Sandton restaurant.

This led Transport Minister Barbara Creecy to instruct Sanral to institute an investigation into the company's appointment and performance.

Moriel released a statement indicating that it had terminated its association with Mudzinganyama, who was also arrested on a warning and is scheduled to appear in court in October to face intimidation charges.

Some lawmakers also wanted clarity as to the nationality of a senior Sanral executive, amid false social media reports suggesting that the majority of Sanral's employees were foreign nationals.

Sanral was given 14 days to respond in writing to the questions posed by the committee members.

In Episode 5 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, Andrew Bahlmann and Rick Grantham, joint CEOs of Deal Leaders International, look at what makes a business transaction-ready and the common mistakes that can undermine a sale, recapitali