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First Rand’s Rand Merchant Bank (RMB) has acquired a 25% stake in Remgro’s Ubiquity Energy platform, the holding company of Energy Exchange, which is an electricity trader licensed by the National Energy Regulator of South Africa.

The value of the acquisition has not been disclosed.

The transaction, the companies said in a joint statement, was supportive of investments in South Africa’s private power market and of unlocking South Africa’s renewable-energy resources.

RMB infrastructure sector solutions transactor Sindisiwe Mosoeu reported that Energy Exchange, as a large-scale purchaser of electricity, could connect corporates with privately produced renewable electricity to meet their decarbonisation goals.

Through the platform, corporate buyers could secure a blend of energy sources such as wind, solar, biomass and hydro rather than relying on a single source.

Remgro strategic investments executive Pieter Uys added that Energy Exchange offered the benefit of aggregation, allowing multiple customers to access scale benefits in procuring energy.

“In turn, large power generators are able to negotiate with a single centralised electricity buyer,” Uys said, adding that electricity tariffs charged by Energy Exchange were competitive and would escalate at the rate of inflation.

RMB principal investments transactor Philip de Villiers said the bank’s acquisition would support the generation and provision of sustainable privately produced power, which he described as “critical to solving our energy challenges”.

“The South African market requires a material shift in the way electricity is produced, sold, and consumed and will need bold thinking and innovative solutions,” De Villiers added.

The first Unit 1 steam generator at the Koeberg power station has been removed from the containment building and placed into an on-site storage building – a development that Eskom describes as a major milestone for a project that has had numerous false starts during previous outages.

However, the State-owned utility has also confirmed that, as a result of “unexpected challenges” during the current long-duration outage, the original return to service date of early June is “no longer achievable”.

“Although every effort is being made to reduce the impact, we are currently running a few weeks late,” Eskom said in a statement, adding that the generation production plan was being updated to minimise the impact of the projected delay.

The removal of the first steam generator came only days after the National Nuclear Regulator (NNR) announced that the 60-day period for receiving written representations from members of the public on Koeberg’s application to operate beyond its mid-2024 licence expiry date had closed.

While central to the utility’s plan to extend the life of the nuclear power station for a further 20 years, the replacement project has faced heavy criticism from both environmental groups and energy commentators.

Environmental opponents to the extension have already raised concerns about the consultation process being pursued by the NNR and have also expressed anxiety about the safety case for the life-extension, as well as with the project’s rising costs and corruption at Eskom.

Questions are continually been raised about the direct and indirect costs of the project, with Eskom having acknowledged that the 2010 cost estimate of R20-billion is no longer accurate but has not yet provided a revised expenditure figure.

The indirect costs, meanwhile, have also been calculated to be substantial, given ongoing loadshedding and the fact that having a Koeberg unit out of service for most of 2023 will add one stage to loadshedding when such cuts are implemented.

Once the Unit 1 replacement is completed, Eskom intends pursuing a similar long-duration outage at Unit 2, leaving Eskom without electricity production from half of Koeberg for most of 2023.

The Unit 1 outage began on December 10 and was expected to continue for about 180 days, while Unit 2 will be shut in September for a similar period after a previous attempt to replace the steam generators was postponed when it emerged that Eskom’s storage facilities had not been completed in time.

Eskom insists, however, that the new steam generators are the last large component replacements needed to ensure Koeberg can operate safely for the requested additional 20-year period.

It also underlines the engineering and logistical complexity of the removal of the first steam generators, explaining that it involved moving steam generators that are installed vertically and taking them out of the containment building horizontally at an elevation of 20 m before placing them on a flatbed transporter.

In a statement Eskom noted that each steam generator is 22 m long, or the height of a six-story building, and weighs over 320 t, which the utility notes as being heavier than a Boeing 747.

Eskom also indicates that the removal and replacement of Unit 1’s other two steam generators will involve the following sequence of activities:

Rigging the remaining two steam generators out from their positions inside the containment building;

Rigging the three new steam generators into their exact position inside the containment building;

Performing six critical welds (two on each steam generator) that join the steam generators to the primary system piping;

Performing radiography on the welds to ensure they meet the code requirements;

Reinstalling all the access platforms that enable people to work all the way up the steam generators (seven stories of permanent structures and temporary scaffolding);

Reinstalling all the other piping connections (steam pipe at the top, feedwater pipe, and all the other smalle...

As the Economic Freedom Fighters (EFF) and its supporters protested in various ways across the country on Monday, as part of a so-called “national shutdown” of the economy, Business Leadership South Africa (BLSA) CEO Busi Mavuso has called the protests counterproductive.

She echoes sentiments shared by trade union UASA and the South African Chamber of Commerce and Industry in days prior.

Mavuso says in her latest weekly newsletter that threats to businesses, many of which are struggling to overcome the challenges they already face from a weak economy and energy insecurity, add to the already negative business sentiment.

A national shutdown only fuels investors’ fears for putting their capital at risk to help build South Africa’s economy. It also makes employees, customers and suppliers stay away from businesses, costing them revenue, Mavuso explains, adding that disruptions do not solve any of the country’s problems.

Mavuso deems the national shutdown a political tactic that clashes with South Africa’s democratic dispensation in which people can exercise their vote to affect change in governance. “We do not need violence and lawbreaking,” she highlights.

News agencies have reported instances of attempted arson and attempted petrol bombs thrown in Cape Town, as well as instances of stone throwing and blocked roads across the country. However, by midday, the protest has not developed into the mass action that the party had punted, even though its leaders had described the shutdown as a success.

Mavuso welcomes the moves by authorities to ensure there is appropriate policing across the country to deal decisively with illegal activities, including the barricading of roads.

BLSA itself also supports the police by relaying crime-fighting information through its Business Against Crime and Eyes and Ears initiatives.

Mavuso takes solace in the fact that businesses and labour are better prepared to manage remote work, owing to these measures having been implemented during the Covid-19 pandemic, and therefore the economic impact of the national shutdown will be lessened.

“Our focus should be on building businesses rather than shutting them down. We should be working to reform the way our economy works, not trying to stop it from working.

“Taking responsibility to try and make things work involves being accountable, the kind of accountability that clashes with the populist instincts of some,” Mavuso states, adding that BLSA will continue its efforts to help deliver the changes needed in the economy.

Meanwhile, Mavuso says the decision by ratings agency Standard & Poor’s (S&P) to downgrade South Africa’s outlook is another reminder of how much the economy is being held back by the failure to timeously implement the structural reforms needed.

The agency wants to see decisive improvement in infrastructure, the governance of State-owned enterprises and a reduction in public debt. However, Mavuso expects S&P to further demote the outlook to negative later this year if no improvements are made.

“It will take all economic roleplayers to turn around South Africa’s fortunes and business has the agency to help government make the profound structural changes needed to regain our positive rating outlook.”

Toyota’s premium vehicle arm, Lexus, is set to launch two battery electric vehicles (EVs) in the local market in the next two years.

The introduction of these vehicles will most likely be the Japanese car maker’s first entry into the South African EV market.

Lexus’ competitors, such as Audi, Jaguar, Mercedes-Benz and BMW, already have a strong EV presence in the country.

Lexus’ first EV introduction is likely to be the UX 300e, which is currently under what the brand calls a ‘sample introduction phase’ in South Africa.

Should this prove successful, the model will be introduced ahead of what is likely to be the second Lexus EV – the RZ 450e.

The Lexus RZ 450e is currently scheduled to go on sale in South Africa next year.

Lexus says it plans to have a full, global line-up of EVs in every market segment it competes in by 2030.

By 2035 – 12 years from now – it aims to sell only EVs.

The RZ 450e and its Battery Guarantee

The RZ 450e is Lexus’ first model to be developed as an EV from the outset.

In terms of dimensions and footprint, the model sits between Lexus’ mid-size NX and the large RX crossover models.

The lithium-ion battery stack is contained in a sealed, reinforced structure to protect it in the event of contact with the road surface or a collision.

The unit comprises 96 cells with a gross capacity of 71.4 kWh.

Lexus guarantees that the battery will retain at least 70% of its capacity after ten years.

The manufacturer is confident, however, that actual capacity at that point should be at least 90%.

Most RZ variants, running on 20-inch wheels, achieve a range of around 395 km in a combined cycle test.

Those which use 18-inch wheels see the range extended by about 40 km.

These ranges apply to performance from full charge to complete depletion of the battery.

JOHANNESBURG (miningweekly.com) – Coal miner Exxaro has advanced considerably on progressing the generation of renewables to supply electricity to its own mining operations, newly appointed Exxaro MD for energy Leon Groenewald said in response to Mining Weekly during Thursday’s media conference at which the JSE-listed coal, energy and ferrous markets company reported record earnings before taxes, interest, depreciation and amortisation (Ebitda) of R19 002-million in the 12 months to December 31.

Groenewald said financial close on the large-scale solar facility at Lephalale, which is being reported in alternating current (AC) rather than direct current (DC) terms, is expected in the next couple of weeks.

Amid many in the country wanting to indicate installed power of their renewable power facilities on a DC basis, he said that Exxaro had opted to disclose the 68 MW of the Lephalale facility on an AC basis.

Exxaro CEO Dr Nombasa Tsengwa revealed during Thursday’s reporting that the Lephalale solar facility would be built at a cost of between R1.52-billion and R1.56-billion.

“From a perspective of funding, we did it very similarly to what you would find in the Renewable Energy Independent Power Producer Programme, so you will be looking at gearing levels of between 75% and 80%.

“Basically, an engineering, procurement and construction (EPC) and all of those agreements are done, so we’re looking to start construction in quarter two for generation in 2024,” Groenewald told Mining Weekly.

“There is certainly a reduction in terms of Scope 2 emissions and there’s also a saving in terms of electricity charges and that also is a significant kicker in terms of the equity internal rate of return (IRR) for the group,” added Groenewald.

He explained that a solar plant generates power on a DC basis and to make this power useable for industry and other users, DC power needs to be converted by inverters to AC power, with the AC power number being lower than the DC power number.

For example, if installed capacity on a DC basis is, say, 100 MW, when converted to AC basis with inverters, the usable plant capacity is, say, 85 MW.

Plants and industry use AC power and transmission lines to transmit AC power.

From an independent power producer (IPP) perspective, some IPPs use the 100 MW DC to indicate the installed capacity, a higher number.

“We chose to show the AC number as it indicates the usable capacity for the end-user,” Groenewald explained to Mining Weekly.

Meanwhile, Exxaro’s partnership with independent energy company Enertrag aims to also develop wind and solar solutions for the mining industry in Mpumalanga, with the first preferred site in that coal-renowned province already permitted.

“We are now focusing our attention on commercial and technical workstreams,” Tsengwa said following the reporting of 41% higher revenue at R46.4-billion, which was the main driver of the 78% Ebitda surge.

The partnership with Enertrag has a potential pipeline of 700 MW. Furthermore, Exxaro is in discussion with various parties to acquire near-permitted sites to further boost our entry into the energy market. The potential pipeline ranges from 370 MW to 975 MW.

“We are quite mindful of South Africa’s electricity grid constraints, which really remain a challenge in our energy strategy, and a challenge for others in the country as well.

“There are around 9 GW of renewable energy projects under development in South Africa, of which the mining sector accounts for 6.5 GW.

“Closing the electricity gap requires concerted efforts from citizens at large but also more from the likes of our business to make meaningful investments,” said Tsengwa, who reported that the Ebitda margin of Cennergi was a high 80% in 2022, underpinned by the long-term offtake agreements. Cennergi, Exxaro’s wholly owned energy arm, last year generated 671 GWh of electricity.

In the past 12 months, Exxaro has pursued eight wind and solar acquisitive growth opportunities, one of which remains...

The Concor-Mota Engil Joint Venture (CME JV) has almost completed the four massive concrete blocks that will anchor the Msikaba bridge in place.

Concor project director Laurence Savage says the blocks represent the engineering on which everything else rests.

“Since they are largely buried structures they tend to be overshadowed by other, more dramatic elements of the bridge, such as the 127-m-high concrete pylons, but they are just as critical, and their construction has been challenging in many aspects.

“The geology has been complex and each anchor block has faced its own unique demands, be it location, geology, the extent of rock fragmentation and water ingress.”

The Msikaba bridge, which forms part of the South African National Roads Agency’s N2 Wild Coast project, will span the 198-m-deep Msikaba River gorge.

The structure is set to cut travel times between the Eastern Cape and KwaZulu-Natal.

It features a main span of 580 m which, on completion, will rank as the longest main-span constructed by the cable-stay method in Africa.

The bridge is being built from the north and south banks of the gorge and comprises two identical halves, each spanning 290 m, which will meet mid-point over the gorge.

Each half is supported by 17 pairs of cables attached to the inverted Y-shaped pylons, one on each side of the gorge.

The pylons are back-stayed into the anchor blocks, two on either side of the gorge, by 34 pairs of cables – 17 for each half – positioned 130 m behind each pylon.

Each anchor block has a length of 49 m, a width of 10 m at the base (narrowing to 4 m on the spine of the structure), a depth of 17.2 m, and a mass of 21 500 t.

Their construction has been underway almost since work on the Msikaba project began in earnest in late 2019.

They will reach completion shortly, just weeks before the deck is launched over the gorge.

Precise blasting techniques were required for the bulk excavations for the four blocks, with the blasted rock material cleared out using 30 t excavators and articulated dump trucks supplied by local subcontractors.

Extensive lateral support was installed in the side walls.

Construction of the blocks has involved the placing of 4 100 m3 of structural concrete and 2 650 m3 of mass concrete, as well as the fixing of 200 t of reinforcement in each anchor block.

Each block was cast incrementally with 11 lifts, varying from 1.25 m to 1.75 m per lift.

Savage says challenges during construction included working in deep excavations and confined spaces, sometimes with heavy machines, and working in and over reinforcing, with much of the work taking place at night.

The National Energy Regulator of South Africa (Nersa) has published retail tariff adjustments for 2023/24 that include a 10% increase for poor residential customers, instead of the 18.65% approved for the standard tariff. This lower hike to poor customers will be paid for through a 29.53% increase in the so-called affordability subsidy paid by large electricity consumers, which will result in their tariffs being hiked by 19.09% on April 1.

The adjustments flow from the regulator’s recent approval of Eskom’s Retail Tariff and Structural Adjustment (ERTSA) application, which was submitted following Nersa’s January 12 approval of an average tariff increase of 18.65% for Eskom’s standard tariff customers.

The ERTSA application, which was made on February 28, outlined how Eskom would recover the approved revenue for the 2023/24 year from each customer category. On 2 March 2023, however, Eskom submitted a revised version with a lower increase of 10% for Homelight 20Amp customers.

On March 10, the Energy Regulator decided on the ERTSA and approved an average tariff increase of 18.65% for Eskom’s standard tariff customers and an increase of 18.49% for municipalities.

In its statement confirming the approval, Nersa said “industrial and urban customers will realise an 18.65% increase plus an additional 7.37c/kWh to cater for the subsidy, which increases from 5.69c/kWh resulting in a 29.53% increase”.

Customers affected by the 19.09% hike include large urban industrial customers falling under the following tariff structures: Megaflex, Miniflex, Nightsave Urban, the wholesale electricity pricing system, or WEPS, and Megaflex Gen.

Homelight 20Amp customers, who are mainly low-income households, will experience a lower increase of 10%, Nersa confirmed.

Municipalities will also realise a lower increase of 18.49% because “in the first three months (April to June) of Eskom’s financial year, they will not experience an increase, as their financial year commences on 1 July every year”.

The July 1 municipal increases are aligned with the requirements of the Municipal Finance Management Act, while the increase for Eskom’s standard tariff customers would be effective from April 1.

“Eskom will over-recover revenues in the first three months (April to June) of its financial year, hence municipalities will only experience an increase of 18.49% as opposed to the 18.65% that the rest of Eskom’s customers will see,” Nersa said in a statement.

The regulator also noted that the approved tariffs exclude value-added tax.

As reported by Engineering News previously, the regulator’s decision was tabled in Parliament on March 13, opening the way for the legal implementation of the tariff increases.

The implementation of the tariff hike on April 1 is also not expected to be affected by legal challenges to the hikes, after applications for an urgent interdict against the implementation of the increases.

In cases brought by the Tebelia Institute and the Democratic Alliance, the interdict formed the first part of a two-part review application. The review, or Part B, of that application is now scheduled to be heard during May. Part B challenges the Nersa determination made on January 12 for Eskom’s allowable revenue.

A separate case by the United Democratic Movement (UDM) and others addresses the loadshedding aspects. The urgent aspect of the UDM-led case is proceeding from March 20, 2023 in the Gauteng High Court.

Opposition to the increases remains strong, however, with Cape Town Mayor Geordin Hill-Lewis describing confirmation of the 18.49% price hike to municipalities as "unfair, unaffordable, and unjust for residents struggling with the rising cost of living".

"The public is being forced to pay for corruption and mismanagement at Eskom in the most unfair, unaffordable and unjust way.

"That is why in Cape Town we are working to end our Eskom reliance and diversify energy supply to more affordable power sources," Hill-Lewis said.

Engineering News editor Terence Creamer discusses the frustrations experienced about the slow pace of implementation of the Energy Action Plan amid intense loadshedding; the creation of one-stop shop for regulatory approvals at the Department of Trade, Industry and Competition; the exemption granted to allow the Kusile power station to return to service earlier; and other developments in the energy sector that the country could expect.

The average tariff increase for various categories of Eskom customers arising from the National Energy Regulator of South Africa’s (Nersa’s) recent allowable revenue decision has been tabled in Parliament as is required for these increases to be legally implemented on April 1.

On January 12, Nersa approved revenue of R318-billion for the State-owned utility for 2023/24 and R352-billion for 2024/25. Once translated to increases in Eskom’s standard tariff, these revenue increases amount to a hike of 18.65% for this financial year and 12.74% in 2024/25.

In an annexure included in the tabling to Parliament, which was made on March 13, it is indicated that Nersa has approved a tariff hike of 18.65% for most tariff categories, together with an average increase for municipal customers of 18.49% with effect from July 1, 2023.

However, the hike for Homelight 20A customers, or poor residential customers, has been limited to 10%.

Eskom will now publish a tariff book on its website to provide more detail with regards to what increases will be implemented from April 1, which will also affect the municipal adjustment from July 1.

While Eskom had requested Nersa to also approve an overhaul to the tariff structure, the regulator decided on March 10 to approve only Eskom’s proposed Homeflex tariff for residential customers. Homeflex introduces a residential time-of-use tariff and a new offset rate for those with small-scale embedded generation for compensation for energy exported to the grid.

The implementation of the tariff hike on April 1 is also not going to be affected by legal challenges to the hikes, after the Democratic Alliance (DA) and the Tebelia Institute withdrew their respective applications for and urgent interdict against the implementation of the increases.

In the Tebelia Institute and DA’s application the interdict formed the first part of a two-part review application. The review, or Part B, of that application is now scheduled to be heard during May. Part B challenges the Nersa determination made on January 12 for Eskom’s allowable revenue.

A separate case by the United Democratic Movement (UDM) and others addresses the loadshedding aspects.

The participants have agreed to address the revenue-related matters in the DA-led case and the loadshedding matters in the UDM-led case.

The urgent aspect of the UDM-led case (focus on loadshedding) is proceeding from March 20, 2023 in the Gauteng High Court.

In light of the proposed Economic Freedom Fighter’s protest action, it may take place virtually and is anticipated to continue for a few days from March 22.

Legacy Motor Group (LMG) chairperson and shareholder Mpho Dipela says dealerships in South Africa face “significant challenges” as they participate in the transitioning to electric vehicles (EVs).

At the end of 2021, there were more than 16.5-million electric cars on the road worldwide, with this number expected to reach almost 350-million by 2030.

“For example, the higher costs of EV manufacturing, combined with the need to keep prices competitive for consumers, mean that average dealership sales margins for EVs are often much lower than for ICE vehicles,” says Dipela.

“Manufacturing and particularly battery prices need to improve to overcome this obstacle and drive profitability.”

Dealerships in South Africa also face limitations in their ability to set and negotiate end-prices, owing to pricing controls and online channels increasingly being controlled by original-equipment manufacturers (OEMs, or vehicle manufacturers), explains Dipela.

With more OEMs committing to increasing EV production, there is a growing desire to shift to online sales channels, or even sell exclusively online, which could further limit the role of dealerships – an issue that requires industry engagement to safeguard small businesses and jobs, he notes.

“The high cost of EVs is also a concern for consumers and dealerships,” says Dipela.

“Many South Africans who purchase vehicles outside of the premium segment simply cannot afford to purchase an EV, and dealerships must find ways to make EVs more affordable for these aspirant customers. EVs are still regarded as for the elite.”

This conundrum does, however, provide greater opportunities for dealership finance departments to help consumers bridge the gap between the price of EVs and traditional vehicles.

“Additionally, while the profitability of used EVs remains uncertain, their longer lifespans and slower depreciation suggests that they could ultimately hold greater value for the second-hand market, which could mean an opportunity for dealerships specialising in preowned vehicles,” says Dipela.

He adds that dealerships must update their operating models and financial planning to accommodate the EV transition, as EVs could result in a 40% decrease in aftermarket spending as they have fewer mechanical parts and longer service intervals.

Dealerships will also have to invest in upskilling their staff to ensure that they have the skills and knowledge to sell and service EVs.

“Ultimately, the transition to EVs is not just about selling cars. It is about creating a whole new ecosystem of products and services that support cleaner, greener transportation,” says Dipela.

“This includes everything from charging infrastructure to battery recycling. Dealerships must adapt to this new reality if they want to remain competitive in the market.”

As one example of creating a supporting ecosystem for EVs, dealerships have to invest in infrastructure to support EVs, such as installing charging stations, especially as loadshedding heightens range anxiety.

“Without the adequate presence of charging stations, EVs will not be a practical option for many South Africans,” says LMG public relations, marketing and customer experience GM Edward Makwana.

“The development of a comprehensive charging network will not only benefit EV owners, but drive economic growth and job creation, and reduce South Africa's carbon footprint. However, to ensure that all communities have access to charging stations, support through regulations and fiscal policies is also necessary.”

LMG is a 100% black-owned automotive retail company headquartered in Tshwane.

The company operates a motor trading division that represents five BMW dealerships and three Mini dealerships.

Other divisions of LMG include LMG Approved Repair Centre, LMG Pre-Owned, LMG Prestige and LMG Tyre and Rim.

At present, the company employs just more than 400 people.