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  • Top CEOs sign up to help tackle South Africa’s energy, transport and crime crises
    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.
    3 min
  • Renewable Energy Grid Survey points to 66 GW development pipeline in South Africa
    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.
    4 min
  • Private offtake market adds new impetus to black energy group’s pioneering IPP journey
    The journey by South Africa’s Pele Energy Group (PEG) from fledgling energy investor to that of a pioneering black-owned and -managed independent power producer (IPP) is receiving fresh impetus from an unexpected source: the robust private-offtake market that has been stimulated by a recent reform allowing for distributed generation projects of any size to proceed without a licence.
    MD Gqi Raoleka reports that the company has steadily expanded its portfolio from 800 MW in 2016 – when Engineering News ran a feature on how the five young black professionals who founded PEG had aspirations to become a fully-fledged IPP – to approximately 2 000 MW currently.
    In addition, it has a wind and solar project pipeline that could result in that portfolio more than doubling over the coming three to five years, and has moved not only to take far larger equity stakes in projects led by established IPPs, but also to position PEG as a lead sponsor in certain instances.
    It has already started to progressively take far larger equity positions in projects linked to South Africa’s most recent Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) bid windows than was the case in earlier rounds when it took up stakes of between 20% and 31%.
    During REIPPPP Bid Window Five (BW5), PEG bid alongside Engie and won three 75 MW solar projects, namely Graspan, in the Northern Cape, as well as Grootspruit and Sannaspos, in the Free State.
    “We hold 47.775% across all three projects with Engie holding 49.725% and the local community holding 2.5%,” Raoleka reports, indicating that the company is, thus, maturing into a “pari passu” investment partner.
    Similar arrangements were developed for BW6, but as was the case for several other wind bidders during the round, PEG’s projects were unsuccessful, as they were located in areas where Eskom determined that the grid infrastructure had already been fully absorbed.
    Raoleka, together with PEG’s other founders – Obakeng Moloabi, Fumani Mthembi, Boipelo Moloabi and Thapelo Motlogeloa – are not satisfied, however, and are currently in the process of pursuing certain projects as the lead sponsor.
    It already has something of a template in place at the 36 MW Solar CPV 1, located in the Western Cape, where PEG is the power plant manager, as well as the majority 55% shareholder, with the Public Investment Corporation holding 40% and the local community 5%.
    The project remains its flagship and has given the company the crucial hands-on experience it requires as it targets even greater independence and growth, including growth in employment, which has increased from 20 employees seven years ago to 90 today.
    Raoleka expects its employee numbers to rise to about 136 by year-end should all its near-term projects materialise, including those where it is the dominant partner.
    Interestingly, the company’s inaugural project as lead sponsor is likely to arise from outside of the REIPPPP framework, which offered PEG its initial opportunity to break into the market by stipulating black ownership and management participation as a qualifying criteria.
    “We are in the process of closing a portfolio of just under 1 GW of private offtake projects,” Raoleka tells Engineering News, adding that clients in the mining sector have been particularly supportive of ensuring that the company plays a lead role in these projects.
    “That's the exciting thing about having a multiple-offtake reality in South Africa, as under REIPPPP we couldn’t focus on developing a long-term relationship with a specific client.
    “Now we have mining clients that are keen to build a long-standing relationship with us, not only because they have long-life assets, but they also understand the value of partnering with black companies and existing communities, particularly those located near their mines,” he explains.
    Raoleka is unable to name the client ahead of financial close, but says that milestone is expected to be achieved within the coming months.
    He...
    7 min
  • Construction starts on Atlantis SEZ for green technologies
    Construction on Zone 1 of the Atlantis Special Economic Zone (SEZ) for green technologies in the Western Cape has started.
    The first tenant in the 22 ha Zone 1 will be industrial and specialist gas supplier Iconic Gases, with work on the company’s factory set to start in November, says Atlantis SEZ CEO Matt Cullinan.
    Construction of Zone 1 is financed by the Department of Trade, Industry and Competition (DTIC).
    Zones 2 and 3 will be around 30 ha each in size.
    The SEZ is located in the well-established industrial area of Atlantis, towards the west of Cape Town.
    Infrastructure and services at the SEZ will include land and factories (to be leased to tenants); 24-hour security; a gatehouse with solar power; ablutions facilities utilising harvested rainwater; perimeter fencing; CCTV cameras; solar-powered street lamps; and indigenous landscaped gardens.
    Cullinan says the Atlantis SEZ cannot offer any tax benefits as national government only assigned these benefits to the initial SEZs that were announced.
    He adds that the focus of the Atlantis SEZ will be on becoming “the place where Africa’s green technologies can grow”.
    The majority shareholder in the SEZ is the Western Cape provincial government.
    Western Cape Finance and Economic Opportunities provincial Minister Mireille Wenger says the SEZ will play an important part in the province’s new Growth for Jobs plan, and that it will do so as a “green tech export manufacturing hub”.
    The Growth for Jobs plan aims to grow the Western Cape economy by between 4% to 6% by 2035, and to stimulate growth to achieve a R1-trillion provincial gross domestic product target over the next 12 years.
    The strategy names limited energy supply as the number one constraint to economic growth and job creation in the province.
    Wenger says the Western Cape has a strong focus on green energy as it rolls out plans to become independent from Eskom “as quickly as possible”.
    “We have allocated R1.1-billion over the next three years to reduce the effects of loadshedding, to boost our economy and to set up a strong pipeline of green energy projects, to scale up support to municipalities to help them get more power onto the grid, and to identify critical transmission infrastructure upgrades.
    “Our Growth for Jobs strategy aims to reduce our reliance on Eskom by between 1 800 MW and 5 700 MW by 2035.”
    3 min
  • Private sector technical teams begin work at four troubled coal stations
    Private sector support teams, assembled with the support of the R100-million Resource Mobilization Fund (RMF), have been deployed across four troubled coal-fired power stations to assist Eskom with its Generation Recovery Plan.
    Electricity Minister Dr Kgosientsho Ramokgopa reports that the teams officially began their work at Matla, Kriel, Majuba and Kendal on June 5, with specific targets having been set for the recovery of each plant’s energy availability factor (EAF).
    At Matla, which could produce up to 3 450 MW, an 11% EAF improvement is being targeted through actions focused specifically on improving coal quality.
    The target at the 2 850 MW Kriel station is a 25% EAF improvement but addressing 700 MW of partial load losses relating to the poor condition of the cooling towers.
    At Majuba, which could produce up to 3 822 MW, a 12% EAF improvement is being targeted through addressing the 1 200 MW of partial load loss associated with its bag filters, while another 25% improvement is being targeted at the 3 840 MW Kendal station, which has problems ranging from ash handling through to its air heaters.
    Some of the individual experts, Ramokgopa reports, have worked for Eskom previously, while others have been drawn in from other private companies and “come highly recommended”.
    “These are people who have raised their hands and we are very happy with their credentials,” he adds, noting that they have also been deployed to certain stations based on their specialist knowledge of the technical problem that requires fixing.
    Through the Generation Recovery Plan, Eskom is aiming to increase its fleet-wide EAF to 65% by the end of March 2024, despite having fallen short of the 60% target set for the end of March this year.
    By that date, the EAF was 56% and it has since deteriorated further to 52% during the period to the middle of May.
    Ramokgopa also reports that the private sector is providing technical support in a bid to further optimise the diesel logistics supply chain to the Ankerlig open-cycle gas turbine (OCGT) power station, in the Western Cape, which is supplied by road tanker.
    Ahead of winter, Eskom indicated that it planned to increase the load factor of the OCGT plants to above 20% to help reduce the intensity of loadshedding during the high-demand months of June, July and August.
    Through tariff increases and the debt relief package, Eskom has R30-billion available for diesel, R20-billion of which would be spent to operate its own OCGT plants at Ankerlig and Gourikwa, with another R10-billion available to buy electricity from the private OCGT plants.
    While Gourikwa is supplied through a pipeline, for Ankerlig to operate at such high load factors requires on ongoing delivery by hundreds of trucks daily, with on-site storage for 17-million litres and off-site storage of 40-million litres also imposing logistical limitations.
    “[Eskom] has been finding it difficult to accommodate these additional trucks, so we have sent in some experts, who are very knowledgeable about logistics, to outline what might be possible,” Ramokgopa says.
    Should the supply chain be relieved to the point where the OCGT plants could operate at even higher load factors, and doing so would help reduce loadshedding, the Minister said additional funding beyond the R30-billion earmarked might be necessary.
    “If we continue burning diesel at the current rate, that R30-billion might not be sufficient,” he said, while stressing that modelling still had to be completed before he could provide a possible monetary value.
    “If it is more, where will [the money] come from?
    “It can come from one of two places: it could come from a future tariff increase, or it can come directly from the fiscus,” he said, adding that the affordability argument would be based on the cost of burning additional diesel relative to the economic cost of higher stages of loadshedding.
    The technical support, he confirmed, is being funded through the RMF, which was launched by Business for South...
    5 min
  • Ramokgopa describes five-year emergency powership term as ‘non-negotiable’
    Electricity Minister Dr Kgosientsho Ramokgopa has reiterated his position that any procurement of electricity from powerships should be limited to a maximum of five years, describing such a term as “non-negotiable”, while also warning that imposing such a restriction could result in higher tariffs.
    He is far less unequivocal, however, about how such electricity might be procured, indicating that it could be the outcome of direct negotiations with Karpowership, which remains a preferred bidder for projects with a combined capacity of 1 200 MW under the much-delayed Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), or an entirely new emergency procurement process.
    “My definition of an emergency is that it can’t be more than five years and we are standing by that position,” Ramokgopa said during his weekly update on the implementation of the Energy Action Plan.
    “Of course, that has implications for the tariff, as the longer the period the flatter the tariff structure is.”
    The affordability of such a tariff, he added, could be assessed by comparing it to the cost of production from the diesel-fuelled open-cycle gas turbines, which he described as a high-cost outlier, or to the tariffs achieved from the first three bid windows of South Africa’s renewable public procurement programme.
    “If it’s favourable, it is something worth pursuing,” he said.
    On whether Ramokgopa has the power to negotiate a term shorter than the 20 years associated with the RMIPPPP should Karpowership eventually secure the environmental authorisations required to progress projects at Richards Bay, Ngqura and Saldanha Bay to financial close, he said: “I have determined what constitutes an emergency, period!”.
    He added he had not yet had engagements with Karpowership about shortening the timeframe, but “how I enter that conversation is on the basis that the period I have outlined is non-negotiable”.
    “It can’t be anything more than five years, I give you that assurance,” he said, repeating the timeframe provided to lawmakers earlier in the week when he said 2 000 MW of powership capacity should be procured.
    Owing to the fact that Karpowership had not yet secured the authorisations needed to proceed, Ramogkopa indicated that the RMIPPPP process was still ongoing and that negotiations were still possible.
    “To the extent that those negotiations can result in reducing that period to five years, I think that would be a welcome development, because then you don’t need to run any new process.
    “But to the extent that we are unable to find each other, then . . . under my new powers I can go out and make a new determination that we need that emergency procurement, and it will be on the terms as stated above in relation to the timeframe and will undergo a competitive bidding process like all other tender processes as is required in the country.”
    He said the rationale for a shorter contract term was based on the fact that South Africa was likely to be able to close its current supply deficit using mostly renewables and battery storage within about three-and-a-half years.
    “Let’s say you give it [powerships] 10 to 20 years, do you want to tell me that, in that period, you will not be able to find additional energy sources to close what essentially constitutes the deficit.
    “And I must say that, from my engagement with the Ministers, my peers, we are not at odds on this one.”
    4 min
  • Karpowership, distributed generation and grid investment updates
    Engineering News editor Terence Creamer discusses the latest updates on the actions South Africa is taking to address the electricity crisis, including positive developments on the distributed generation and trasnmission grid investment fronts, but with the immediate prognosis in terms of loadshedding remaining bleak. The country also faces the risk of making potentially extremely costly decisions as it considers options for the procurement of electricity to be generated by Karpowership.
    11 min
  • Climate commission calls for revised IRP to upscale renewables allocation to 60 GW by 2030
    The Presidential Climate Commission (PCC) is recommending that the next edition of the Integrated Resource Plan (IRP), which is currently under review, caters for the building of between 50 GW and 60 GW of variable renewable energy by 2030, supported by co-located storage of between 3 GW and 5 GW, as well as gas peaking support.
    It adds, too, that if anchored on a least-cost approach, South Africa should not build any new coal or new nuclear capacity, while also noting that renewables coupled with storage represents the only realistic technology options for resolving loadshedding in two to four years. This, given the long lead times involved for either coal (10 to 12 years) or nuclear (12 to 15 years).
    The commission also concludes that South Africa should aim to build at least 8 GW of wind and solar yearly over the next two to four years to tackle ongoing power cuts, while investing substantially in expanding both the transmission and distribution grids, which have emerged as a key constraint to facilitating the construction of new renewables plants.
    The recommendations arise from extensive modelling conducted in parallel with a series of stakeholder and technical engagements held over the past 12 months on South Africa’s future electricity system.
    Executive director Dr Crispian Olver reports that the engagements and modelling arose in response to a request by Mineral Resources and Energy Minister Gwede Mantashe for the PCC to make recommendations into the IRP review process.
    Mantashe told lawmakers this month that the updated IRP, which he initially indicated would be released by the end of March, would be released for public comment during the second quarter of this current fiscal year, implying a release between July and September.
    "It is anticipated that the final revised IRP will be approved and Gazetted for implementation during the course of the 2023/24 financial year,” Mantashe said, while also indicating that a procurement process for new nuclear would be launched during the fourth quarter of the current fiscal year to March 2024.
    The current edition of the plan, known as IRP 2019, is largely regarded to be out of date, with the demand, technology cost, and energy availability factor (EAF) assumptions having deviated materially since its publication.
    The current plan has an allocation for the building of some 26 GW of variable renewables between 2019 and 2030, but is behind schedule.
    For its part, the PCC has produced three interrelated reports, including stakeholder and technical reports, as well as one titled ‘Recommendations for South Africa’s Electricity Future’, which contains the commission’s IRP recommendations.
    FOURTH NATIONAL SCOURGE
    PCC commissioner Lebogang Mulaisi, who is also labour market policy coordinator at the Congress of South African Trade Unions, says the recommendations take account of the country’s current electricity crisis, which she describes as South Africa’s “fourth” scourge, along with poverty, inequality and unemployment.
    “Electricity is critical for development and it is in the national interest to resolve the crisis in a scientific and transparent manner.”
    Mulaisi also emphasises the importance of ensuring that the IRP is regularly updated given ongoing changes to technology costs and economic conditions.
    Since the introduction of the first IRP in 2010, the plan has been updated only once, in 2019, and the PCC has recommended that it be updated at least every two years.
    Besides recommending that South Africa eschew new nuclear and new coal, the PCC has indicated separately that it would be too costly and environmentally undesirable for South Africa to seek to refurbish existing coal plants.
    However, it has accepted that a temporary extension beyond the currently scheduled decommissioning dates may be necessary for some units in a bid to ease the intensity of daily loadshedding.
    “As a matter of principle, we cannot allow decommissioning of coal plants in a vacuum,” Mulaisi says.
    “The...
    8 min
  • Current economic storm set to push luxury car buyers to EVs, says Merc’s Raine
    When considering the current energy crisis in the country, South Africa’s luxury vehicle market is destined to become an electric vehicle (EV) market, says Mercedes-Benz South Africa (MBSA) co-CEO Mark Raine.
    Many customers in this segment are installing off-grid energy systems, such as home solar, which means that the required power to charge EVs is readily available in these households.
    Eskom’s struggle to supply electricity is unwittingly “almost making EVs more viable” as higher-income consumers seek as much independence as possible from the country’s institutional woes, says Raine.
    Surging Eskom electricity prices, as well as sharply rising fuel prices, boosted by a weakening rand, are also working in favour of the expansion of EVs in this segment, as these factors all serve to reduce the total cost of ownership of an EV, he adds.
    By saving roughly R500 a month by driving an EV, it is possible to make up the higher purchase price of an EV versus an internal combustion engine (ICE) vehicle within three years, says Raine – “plus, you never have to pay for petrol again after that”.
    “It’s a good business case.”
    Raine laments the rand’s recent and sudden plunge against major currencies.
    “Volatility and uncertainty such as this create a multitude of problems in the business environment.
    “And, at the end of the day, it is always the consumer that pays. A business can only shield consumers up to a certain point.”
    Raine says the rand’s current decline against the dollar and euro will only become visible four to five months from now as imported goods procured at the new, weaker exchange rates trickle into the domestic market.
    EV Progress
    Around 30% of all new Mercedes-Benz car sales in the UK are already electric, says Raine.
    In South Africa, however, the uptake has been more sluggish than what was initially hoped for, he adds.
    This is partially owing to local homologation challenges, high import duties on EVs, as well as a lack of allocation from MBSA’s parent company, with other, more EV-friendly markets first in line to receive new product.
    “We would, for example, have liked it if the EQS was here sooner,” says Raine.
    “It is, however, being homologated and should be in dealerships in mid-July.”
    Currently, only 5% of MBSA’s sales in South Africa are EVs.
    “We have seen early adopters move first to acquire these vehicles,” notes Raine.
    “The EQA is the most popular, and also the most affordable in the EQ electric range.”
    As from 2027 onwards, Raine believes EVs will make up 50% of all MBSA new-car sales in South Africa.
    This year’s sales should already receive a boost from the launch of the EQE sedan and sports-utility vehicle (SUV), as well as the EQS SUV.
    “This will see our portfolio go from four EVs to seven,” says Raine.
    As for the general domestic premium/luxury market, Raine believes sales are likely to tread water in 2023.
    For this year, and going forward, he says MBSA will have a strong focus on SUVs, with the newly launched GLC set to boost domestic sales.
    “We see a strong transition to SUVs in the local market and we believe that the new GLC is the ultimate lifestyle vehicle – it is the perfect vehicle for South Africa.”
    MBSA will also this year add the GLB 35 SUV to its portfolio, with these units only available for sale online.
    However, says Raine, the customer’s nearest dealership will remain the trusted partner for delivery and services.
    4 min
  • Ramokgopa in conversation with Karpowership on five- to ten-year contracts
    South Africa’s Electricity Minister Dr Kgosientsho Ramokgopa is having discussions with Karpowership about the potential for introducing the floating gas-to-power plants under a power purchase agreement (PPA) with terms of between five and ten years, instead of 20 years.
    In providing an update on the reforms being pursued under Operation Vulindlela, including various electricity reforms, project management unit head Rudi Dicks reported that powerships were not among the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) projects expected to progress to financial close in the coming months.
    This, after Minister in the Presidency Khumbudzo Ntshavheni indicated that five more RMIPPPP projects were expected to reach financial close in the current quarter, bringing to eight the number of hybrid projects to proceed under the much-delayed, so-called emergency procurement round.
    To date, only three Scatec projects, involving 540 MW of solar photovoltaic generators, coupled with lithium-ion batteries with a capacity of 225 MW/1 140 MWh, have entered construction for a total of 150 MW of dispatchable capacity.
    The exclusion of the powerships related to the fact that the three projects named as preferred bidders under the 20-year RMIPPPP had not yet received the environmental authorisations needed for them to proceed at selected docking sites in Richards Bay, Ngqura and Saldanha Bay.
    “There is another dynamic that we have also introduced . . . that there is a conversation to be had around the term of these projects.
    “Of course, the initial term has been 20 years, we have taken the view as Necom [the National Energy Crisis Committee] that a shorter-term period would have to be looked at, potentially between five and ten years.
    “It’s really because this is an emergency intervention . . . [and] this, of course, goes to the heart of whether one has to sign a 20-year PPA.
    “This is the conversation we are having, and Minister Ramokgopa is already having engagements with Karpowership with regard to these sorts of interventions,” Dicks said.
    Ramokgopa has indicated previously that, should powerships be deployed to help reduce loadshedding, the PPA term should be between three and five years. The increase in the timeframe to between five and ten years might reflect the unit cost implications of shortening the term to below five years.
    Meanwhile, Ntshavheni reported that project agreements had been signed for 25 preferred bidders from Bid Windows 5 and 6 of the renewables programme, amounting to about 2 800 MW, of which 784 MW was already in construction.
    She also reported that, since amending Schedule 2 of the Electricity Regulation Act to remove the licensing requirement for generation projects of any size, more than 100 projects were at various stages of development, representing over 10 000 MW of new generation capacity and over R200-billion of private sector investment.
    Dicks said that, following the lifting of the licensing threshold for embedded generation projects from 1 MW to 100 MW in August 2021, and the subsequent removal of the threshold altogether in December 2022, there had been a surge of private interest in electricity generation that continued to “outstrip expectations”.
    He showed that the number of distributed generation projects above 10 MW in size registered with the National Energy Regulator of South Africa had jumped to 2 427 MW-worth of registration between January and March this year.
    This was up from 1 664 MW-worth of registrations for 2022 as a whole, which itself represented a material rise from the 134 MW registered during 2021.
    Dicks also highlighted the strong rise in requests for grid-connection budget quotes from Eskom’s Grid Access Unit, which stood at nearly 13 400 MW, with budget quotes having been issued for 4 321 MW.
    Another 1 124 MW was in the connection phase, with 181 MW already connected.
    For the coming quarter, the main reforms in the electricity sector would relate to the forma...
    5 min

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