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The absence of a functional mining cadastre in South Africa, which has been undermining the sector for years, is now having potentially negative knock-on effects for developers of renewable-energy projects, particularly in Mpumalanga – a region where there is still capacity to connect new projects to the grid and the designated epicentre of South Africa’s just energy transition.

AmaranthCX director Paul Miller, who has conducted extensive mapping of the coal mines and projects in Mpumalanga, says without the cadastre renewables developers are facing difficulties in complying with a legal requirement to identify any mining or prospecting rights on, or within two kilometres of the proposed development.

This requirement is outlined in Section 53 of the Mineral and Petroleum Resources Development Act (MPRDA), which states that any developer of a non-agricultural project must apply to the Mineral Resources and Energy Minister or a delegated local official for permission to proceed with the development. That delegated local official must also identify and then consult with all affected rights holders.

The requirement is designed to prevent the sterilisation of mineral resources, and Miller says it is not desirable that it be suspended or scrapped, as it is necessary to check for competing rights.

In a recent article published in Business Day, Seriti Resources CEO Mike Teke and Seriti Green CEO Peter Venn also noted the need for wind developers to comply with Section 53 of the MPRDA as one of several regulatory steps that had to be undertaken before proceeding with construction.

The other lesser-discussed requirements highlighted in the article included securing approval for tall structures from the Civil Aviation Authority and confirmation with the South African Weather Service that the turbines will not interfere with weather radars.

Miller argued that, without a functional mining cadastre, it is practically impossible for project developers to determine who has what rights and where these are.

“I have heard that the DMRE itself is taking upwards of six months just to identify which rights holders may be affected by a new project.

“This poses a serious red tape bottleneck, while the country sits in the dark for upwards of ten hours a day,” Miller says, adding that the process to comply with Section 53 is also not clear, while the DMRE has huge discretion.

Miller believes the process is so time-consuming because the department's own Geographic Information System (GIS) data is spread across the Samrad system, which has been described as dysfunctional, as well as poorly managed, paper files.

“Due to a complete absence of transparency by way of an open online mining cadastre there is no way for a developer to determine if a project will impact on mining rights or prospecting rights, other than to approach the department.

“The department must then determine what rights exist in the vicinity of the project and contact those rights holders.”

The roadblock could be eased, Miller argued, if the DMRE were to periodically extract the full ESRI geodatabase file from the ArcGIS system that underlies Samrad and make it available for download on its website. Miller says this could be done in an afternoon at no additional cost to the department.

“Then a developer’s own GIS consultants could use their own systems to take a look at what rights are competing.

“The developer could then solicit letters of no objection from those rights holders and submit them with the Section 53 application to the DMRE.

“This would help ameliorate the bottleneck until a functional mining cadastre is procured and implemented - which is still many years away.”

Should such a temporary solution not emerge, Miller believes it may be necessary for the renewables industry to take legal action to force transparency by the DMRE.

“Perhaps the organised renewable energy industry will have the courage that the mining industry has not yet displayed.

“The promises of an imminent ...

The Department of Mineral Resources and Energy (DMRE) says it is working with other departments to expedite negotiations on a new nuclear cooperation agreement with the US, following the expiry of a previous agreement, with implications for the supply of nuclear fuel to Eskom’s Koeberg power station.

The Nuclear Cooperation Agreement on the Peaceful Uses of Nuclear Energy was signed between South Africa and the US in 1995 and came into effect on December 4, 1997, for a period of 25 years. The agreement, thus, lapsed on December 4, 2022.

America’s National Regulatory Commission subsequently informed Westinghouse that it had withdrawn its authorisation to supply Koeberg with nuclear fuel.

Koeberg uses Westinghouse fuel, which is manufactured in Sweden with inputs from the US, in its Unit 1 reactor, while fuel sourced from Framatome of France is used to load Unit 2.

Eskom chief nuclear officer Keith Featherstone has indicated that the Westinghouse fuel required for the current Unit 1 outage, which began in December and has been extended to incorporate the replacement of the unit’s three steam generators, is on site for use when the unit returns to service. The outage is expected to continue until early June.

The fuel for the Unit 2 outage, which is scheduled to begin in October, and which will also be extended for the much-delayed replacement of its steam generators, is not yet on site, but is being manufactured by Framatome and is expected to be delivered by May.

However, Eskom will need to secure additional fuel for Unit 1’s mid-2024 refueling and is, thus, considering various options in light of the previous US authorisation having been withdrawn.

Featherstone says Eskom’s preference is to continue with it two-vendor strategy and for Westinghouse to continue to supply fuel for Unit 1, as the process involved in qualifying a new fuel supplier is a long and involved one.

In addition, while Framatome fuel can be loaded into Unit 1 it is not the preferred option, as only one-third of the core is loaded with new fuel during a refueling outage and significant testing would need to be undertaken to verify that a “mixed core” combination is safe to operate.

“It can be done and it’s a lot simpler than bringing in a new fuel supplier . . . but we would prefer to sort out the issue and get the fuel from Westinghouse if we can,” Featherstone explains.

The DMRE claims to have initiated negotiations for the conclusion of a new standardised Nuclear Cooperation Agreement with the US in 2018 and reports that both countries have resolved to expedite the process, while engaging on measures to ensure continuity of cooperation during the negotiations.

While denying any immediate supply crisis, the department acknowledged that “urgent resolution is needed to allow Westinghouse Electric Company to provide fuel supply”.

“The DMRE is working with other government departments to expedite the negotiations of the new Nuclear Cooperation Agreement with the USA.

“We are confident and strongly believe that there is commitment between the parties to conclude the new Nuclear Cooperation Agreement to ensure mutual economic benefit between the two countries.”

Engineering News editor Terence Creamer discusses the National Energy Crisis Committee's planned initiatives for dealing with the country's electricity crisis; the proposed declaration of the energy crisis as a State of Disaster; Eskom's Generation Recovery Plan and the focus on getting units at the Kusile power station in operation again; what President Cyril Ramaphosa might outline in his State of the Nation next week; and if a State of Disaster will help the country overcome the electricity crisis.

Consulting Engineers South Africa (Cesa) has expressed some reservations with a proposal that a National State of Disaster be declared to tackle South Africa’s long-running electricity crisis.

While not rejecting the proposal entirely given the urgent need to address the “serious crisis”, CEO Chris Campbell cautioned that “people with ill-intent” could abuse the declaration, as was the case when a State of Disaster was implemented during the Covid pandemic.

“Should we go down that path, what controls and oversight will be in place to make sure that there is no abuse of that situation?” he said in response to a question posed at an event convened for Cesa president Olu Soluade to deliver the voluntary association’s annual presidential address.

“We certainly need to create a sense of urgency . but we need to put in place the controls and oversight to make sure that it doesn't become an opportunity for abuse.”

Campbell expressed support for the short-, medium- and long-term plans that had started to emerge out of the National Energy Crisis Committee, or NECOM, which he said had been formulated with the support of various engineers, who had provided input either through engineering associations or through organised-business and company structures.

“A huge amount of knowledge and research has gone into breaking the plan up into bite-size bits, as opposed to promising all of it in the next six months.”

He stressed, however, that resolving the loadshedding crisis was not a technical challenge alone and would also require various regulatory and social interventions, including intensified efforts to address criminality and sabotage.

In his address, Soluade said Cesa members stood “ready to commit to making a difference” in addressing both the energy and infrastructure challenges, which were “stretching our resilience to the maximum”.

“We are calling on government to commit to increased and informed spending on infrastructure as a key economic driver.

“Government needs to overcome the current supply-chain and procurement issues as well as the skills challenges our country faces. Additionally, the pace at which this happens needs to be accelerated,” Soluade asserted.

He argued that pending public procurement legislation also needed to make a clear distinction in the way the procurement of infrastructure was treated relative to the purchase of general goods and services.

The Public Procurement Bill, he indicated, offered the opportunity for a “fundamental shift in principle and in law to ensure that value for money was equated to the quality of services procured in the infrastructure delivery process”, rather than a least-cost approach.

“We believe that the correct approach should be to include the total cost of lifecycle ownership – cheap simply does not last and puts lives at stake.

“The impact of an inadequate design, that only equates to two percent of the lifecycle cost of a project, can have a catastrophic impact on operations and maintenance costs, that equate to approximately 60% to 70% of the total lifecycle cost, over the pursuant 30 years.

“What our country is currently experiencing is the results of years of inadequate supply-chain and procurement management focused on least cost procurement,” he argued.

Data from a survey the National Association of Automotive Component and Allied Manufacturers (Naacam) conducted in January indicates that the recent months of prolonged loadshedding have resulted in a substantial drop in monthly production and turnover among its manufacturing members.

In addition to this, the rolling blackouts are placing new business opportunities for auto component manufacturers at risk, while workforces are being placed on short time, vehicle assembly production lines are being stopped, and machinery is being damaged owing to electrical surges.

The auto sector is one of South Africa’s key industrial sectors, says Naacam executive director Renai Moothilal.

It delivered more than 4% of the country’s gross domestic product in 2022, with the component sector alone exporting a record R69.2-billion worth of goods, and employing more than 80 000 people in manufacturing jobs.

The results from Naacam’s survey indicate that most component manufacturers face loadshedding at their plants, despite the fact that some of these companies have loadshedding curtailment agreements in place with their various municipalities.

“South Africa has been encumbered with loadshedding for more than a decade, however, over the last two quarters, the prevalence and quantum of loadshedding have increased dramatically,” says Moothilal.

“Incidences of stage 6 implementation – up to 12 hours per day of no electricity – are having a negative impact on the sector and will ultimately harm the automotive sector’s contribution to the economy in the short- and long-term.”

Moothilal says while Naacam members are taking steps to limit the impact of loadshedding, many of the solutions require new investment – money the sector simply does not have.

This is placing strains on companies’ cash and balance sheets, already under pressure after Covid-19.

“The impact of this is a significant worsening of the global competitiveness of the South African automotive industry,” says Moothilal.

You Can’t Build 99% of a Vehicle

Survey respondents were spread across all major automotive hubs in South Africa.

Around 73% of respondents indicated that they face loadshedding at one or more of their plants, with a further 12% noting that while they do experience loadshedding, this is not the case at all of their plants.

The stage at which plants begin to face loadshedding varies by company and region.

The bulk of respondents (64.14%) reported being impacted directly by loadshedding only from stages 5 to 8.

That being said, there are respondents that face electricity disruptions from stage 1 onwards (14.13%), putting vehicle supply chains at a degree of risk.

A vehicle assembly process is continuous, and the customer cannot assemble 99% of a vehicle, explains Moothilal.

“This fact is especially worrisome as loadshedding appears set to move to some level of permanence this year and the next.”

Positive cases have emerged with several respondents having agreements in place with their municipalities or industrial development zones (IDZs) to limit loadshedding at their operations.

These include curtailment agreements under which companies reduce their electricity consumption under certain stages, in lieu of loadshedding.

A third of respondents have this type of agreement in place.

Naacam’s assessment of the loadshedding status of vehicle assembly plants ­– Naacam members’ customers – reveals that these plants are either in an area zoned for no loadshedding, or that they have curtailment agreements in place.

However, overall vehicle production is still being affected as there is no standard agreement in place for all component manufacturers.

“A complete sector approach is needed, especially at the Tier 1 supplier level, given the quantum of jobs and technology investment at risk here,” says Moothilal.

“We can’t assume that because vehicle plants are protected from loadshedding, all is good. Lose the Tier 1 component manufacturers and you lose the sector.”

Moothilal adds that...

Financial services firm Absa's Purchasing Managers Index (PMI) was at 53 index points in January, almost unchanged from the 53.1 index points in December, as a decline in the employment and new sales orders indices to levels below 50 were offset by higher business activity and inventories returning to positive terrain.

The significant, and surprising, improvement in the business activity index relative to the previous month was encouraging, despite many respondents still flagging loadshedding as holding back production and new sales orders dipping lower in January. Should this translate into actual production growth, it would be a promising start to the year for the struggling sector, Absa noted.

"The business activity index surged to 56 in January from 45.2 in December. While encouraging, it remains to be seen whether this can be sustained in the coming months, as many of the respondents flagged loadshedding as a drag on production.

"Continued activity growth would require a sustained improvement in demand and, most likely, a move to less intense stages of loadshedding. Therefore, the increase in the expected business conditions index was encouraging," Absa said.

While the new sales orders index had proved surprisingly resilient in the final two months of 2022, the January reading of 49.9, down from 53.8 in December, points to no change in demand in the first month of 2023. As export sales remained unchanged at a fairly high level, the deterioration was likely caused by weaker domestic demand, the bank noted.

The employment index, after the unexpected surge to 54.3 in December from 45.7 in November, dipped back below the neutral 50-point mark in January, to 48.4, which suggests that any improvement in staffing levels at the end of the year was temporary.

Meanwhile, the inventories index more than recovered from December’s sudden drop to below the neutral 50-point mark and rose by 6.8 points to 53.1, which is its best level since August 2022. The index was up from 46.3 in December and higher than the 51.9 registered in November, Absa said in its report.

Additionally, the supplier deliveries index declined to the lowest level in two years, at 57.6, down from 65.8 in December, albeit remaining well above the neutral 50-point mark, which was unusual prior to the pandemic.

"The fall could have been owing to more efficient supply chains resulting in faster delivery times, because the index is inverted and faster delivery times result in a decrease. However, it could also be linked to the downtick in new sales orders, with less demand for inputs resulting in more responsive deliveries," the bank said.

Following a steady decline, the purchasing price index booked its biggest increase since March 2022 to 69.3 index points, up from 64.4 in December, but lower than the 75.9 in November. However, the index remains low relative to its long-term average. The uptick in costs could possibly be linked to measures to offset the impact of loadshedding on production.

The rand exchange rate was, on average, slightly stronger to the dollar compared to December, but the Brent crude oil price was higher. The resulting uptick in the fuel price will put further pressure on costs, especially for businesses using diesel generators, Absa added.

Meanwhile, the index tracking expected business conditions in six months’ time rose by 8.9 points to 63.8, which is the best level since early 2022. Given the poor potential for the domestic economy to accelerate demand growth for factory goods, this was likely driven by better expectations for the global economy.

Further, there are more signs of the European economy avoiding a near-term recession and the reopening of the Chinese economy providing a further boost to global demand, Absa highlighted.

New-vehicle sales increased by 4.8% in January, to 43 509 units, compared with the same month last year.

New-passenger-car sales gained 2.9%, to 31 072 units.

The car-rental industry showed strong support for the new-passenger-car market and accounted for 16.2% of sales in January.

Sales of bakkies, small trucks, vans and minibuses increased by 10.4%, to 10 622 units.

Medium-truck sales grew by 2.9%, at 461 units, with heavy-truck and bus sales increasing by 9.9%, to 1 354 units.

New-vehicle exports saw a decline of 1.8%, to 20 536 units.

Naamsa | The Automotive Business Council describes January’s sales numbers as a “weak performance” in line with a “depressed economy” facing ongoing structural challenges and cost-of-living increases.

“The same challenges that confronted the economy and the automotive industry in 2022, such as persistent loadshedding, high inflation and interest rates, as well as currency depreciation, have all been carried over into 2023.”

Despite vehicle exports performing weaker in January compared with the corresponding month last year, Naamsa believes that the momentum remains upward going forward.

“Notwithstanding the impact of the economic downturn, as well as the ongoing geopolitical conflict risks, there are signs of the European economy avoiding a near-term recession, while the reopening of the Chinese economy would provide a further boost to global demand in general.

“Prospects for vehicle-export growth remain optimistic on the back of further new model introductions by major exporters in the domestic market.”

Initiatives being coordinated under the aegis of the National Energy Crisis Committee (NECOM) will seek to recover and add about 8 800 MW of capacity to South Africa’s electricity supply during the course of 2023 in an effort to reduce the intensity of loadshedding, a senior official from the NECOM secretariat has confirmed.

In a briefing to editors, head of the project management office in the private office of the President Rudi Dicks, who is also heading the NECOM secretariat, indicated that the additions do not include any success Eskom may have in recovering the performance of its coal fleet.

However, the plan does assume the reintroduction during the year of the 2 160 MW associated with the three Kusile units that were rendered inoperable following the collapse of the Unit 1 flue duct in October – a development that also compromised units 2 and 3 and has added two stages of loadshedding ever since.

It also assumes the introduction of Kusile Unit 5, synchronisation of which has been delayed until at least July as a result of a pre-commissioning gas-heater fire incident.

The return of Kusile units 1, 2 and 3 this year will hinge, Dicks confirmed, on Eskom receiving a temporary exemption from the Department of Forestry, Fisheries and the Environment allowing it to bypass the flue-gas desulphurisation (FGD) plant, using temporary flues, for about two years to facilitate full remediation of the permanent flues.

Eskom acting group executive for generation Thomas Conradie confirmed that, by using temporary flues, the three units could be returned to service about a year earlier than would be the case if Eskom were to focus exclusively on the repair of the three permanent flues, which share a common chimney.

Should Eskom secure the exemption to bypass the FGD, it is anticipated that it will take about ten months to construct the first stack, with stacks 2 and 3 becoming available at one-month intervals thereafter.

The temporary stacks will be designed, constructed and commissioned by Concor and preparatory work is reportedly already in progress.

The balance of the plan includes:

Importing electricity from Botswana, Zambia and Mozambique in addition to the 300 MW already being purchased from the Southern African Power Pool, to increase imports by about 1 600 MW overall;

Implementing Eskom’s Standard Offer to buy electricity at a set price from existing commercial and industrial entities with surplus generation, as well as through its emergency generator programme, which pays a variable price based on Eskom’s hourly market price. Together, the programmes are expected to secure 1 000 MW;

Implementing a net-billing and/or feed-in tariff to unlock supply from commercial and household rooftop solar generators to secure and initial 850 MW this year;

Supporting the utility-scale embedded generation projects that could introduce nearly 1 600 MW in 2023;

Completing the first 200 MW phase of Eskom battery energy storage roll-out;

Mopping up 70 MW of surplus supply available from existing renewable facilities; and

Ramping up demand-side and energy efficiency programmes to secure savings worth about 250 MW.

SHORT-TERM PROCUREMENT & DIESEL

NECOM is also working on the details of a so-called ‘Loadshedding Reduction Programme’, whereby Eskom will be given the authority to enter into five-year power purchase agreements with new suppliers able to deliver electricity in the short term, but probably not during 2023.

It is possible that Karpowerships could feature in this programme should these fail to close the projects selected under the Risk Mitigation Independent Power Producer Procurement Programme, which is scheduled to be concluded by March.

Dicks also confirmed that a diesel funding mechanism had been agreed for the remainder of Eskom’s financial year to March 31, but said details would be provided by Eskom and the National Treasury.

It is believed that the National Treasury will back Eskom to raise about R5-billion in loans from commerci...

Chemicals group Omnia has signed a memorandum of understanding (MoU) with WKN Windcurrent, a subsidiary of German renewable energy group PNE, to explore the feasibility of developing a green ammonia production plant in South Africa.

Omnia CEO Seelan Gobalsamy says ammonia is a key ingredient in the agricultural and mining markets, which are the primary sectors that Omnia supplies.

He adds that a green ammonia production plant would greatly reduce the group’s need to import ammonia and, therefore, save on costs and the need to rely on often inefficient railway logistics.

Most importantly, it will help the company to decarbonise its operations, particularly as it currently procures 15% of its ammonia requirements from a fossil-fuel-heavy source in South Africa and imports the remainder of its ammonia from other markets. The imported ammonia is mainly produced using fossil fuels, adding to Omnia’s carbon emissions.

Through the partnership with WKN, Omnia pledges its commitment to providing capital and intellectual capital towards exploring the feasibility of building a green ammonia production plant.

The partners will conduct a prefeasibility study before embarking on a feasibility study.

Omnia group executive Jona Pillay says the preliminary idea is to build a 100 MW combined wind and solar energy plant, externally, and install between 40 MW and 50 MW of solar power internally, tied to an electrolysis plant.

He confirms the company is considering installing a few 20 MW electrolysis modular units, which are each able to produce 20 t/y of ammonia. This will be combined with an air separation unit to ultimately produce 100 000 t/y of green ammonia.

Omnia currently uses 280 000 t/y of ammonia; therefore, the plant would manufacture about 30% of its requirement.

Pillay states that if Omnia can feasibly expand this plant and make greater use of green ammonia, it will greatly reduce its carbon emissions.

The total battery electric vehicle (BEV) market in South Africa grew by 137% in 2022, says BMW Group South Africa (BMW SA).

Just under 420 BEVs were sold in South Africa in the first eleven months of last year, according to data from Naamsa | The Automotive Business Council.

BEV sales totalled 218 units in 2021.

Last year’s BEV sales were boosted by the launch of several new premium-brand models, however, no mass brand sells an EV locally yet.

Combined, BMW SA, which includes the Mini brand, accounted for close to 75% of BEV sales in the country’s premium segment, says BMW SA spokesperson Hailey Philander.

BMW SA offers a range of BEVs in the local market, namely the Mini Cooper SE (currently the most affordable BEV), BMW iX, BMW i4 and BMW iX3, alongside the newly introduced BMW i7 xDrive60.

The BMW iX1 xDrive30 will be added to the mix by the second half of this year.

The first electrified high-performance model, the BMW XM, will also be introduced in South Africa this year, says Philander.

The New 7 Series

The new 7 Series line-up adds the all-electric i7 to its fold.

The range starts from R2.16-million if you buy a ‘standard’ vehicle, and from R2.82-million if you wish to acquire the fully electric version.

As always, the 7 Series is as much about the rear-seat passengers as it is about the driver.

Unlike its predecessors, the new 7 Series is available worldwide exclusively as a long-wheelbase model that maximises the space in the rear.

This sees the almost limo-style vehicle offering a theatre screen that drops down from the roof behind the driver and front passenger seat, offering content similar to a home entertainment system.

The screen has a 31.3-inch touchscreen and 8K resolution, Bowers & Wilkins surround sound system with optional exciters in the seats, and 5.5-inch touch-controlled displays in the rear doors.

This means passengers can stream videos, play games, listen to music, get information, and watch downloaded programmes, all while on the road.

Touch command control units in the doors now also allow rear-seat passengers to make phone calls using the car's audio system.

An Executive Lounge option for the rear offers a reclining seat position, with a merino leather/cashmere wool interior trim offered as a new option to buyers.

For the driver, technology such as Manoeuvre Assistant offers aid for automated parking and manoeuvring.

On models fitted with Parking Assistant Professional, the Reversing Assistant can now carry out steering movements for distances of up to 200 m.

The Manoeuvre Assistant helps the driver to an even greater extent.

On prestored manoeuvring routes, this system automatically carries out all the tasks required, such as controlling the accelerator, brakes and steering, as well as changing gear to move forward or reverse.

Inside the cockpit of the new 7 Series, there are a significantly lower number of buttons, switches and controls than in the outgoing model.

The key here is the digitalisation found in the BMW curved display screen.

This fully digital screen grouping consists of a 12.3-inch information display behind the steering wheel, and a control display of 14.9 inches.

The driver and front passenger can also utilise YouTube video-on-demand streaming on the control display for the first time.

A 5G-compatible aerial system in the new BMW 7 Series provides high-speed connectivity.

Outside, a variety of two-tone finishes add to the standard colours available.

Under the hood, so to speak, the electric i7 is powered by two electric motors, which together develop 400 kW and an array of innovations that increase its range to between 590 km and 625 km.

In South Africa, two models with 48 V mild hybrid technology are also on offer from the start of sales.

A six-cylinder in-line diesel engine developing 220 kW of power in the form of the BMW 740d will be added to the portfolio in the second half of this year.