Engineering News Online Audio Articles

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.