The National Energy Regulator of South Africa (Nersa) has approved the registration of a further 16 distributed generation projects with a combined capacity of 211 MW and a collective investment value of R3.65-billion.

The approvals were made during a regulator executive committee meeting on June 6, at which full-time regulator member for electricity regulation Nhlanhla Gumede stated that the 100 MW reform “is now truly in play”.

The reform was announced jointly by President Cyril Ramaphosa and Mineral Resources and Energy Minister Gwede Mantashe in June 2021 and theoretically opened the way for projects below 100 MW to proceed without a licence, even when such facilities wheel electricity through the grid and sell to nonrelated customers.

Prior to the reform the project threshold had been 1 MW.

However, the reform has faced some implementation difficulties, including registration, grid connection and environmental approval bottlenecks.

As a result, Operation Vulindlela intervened in an effort to reduce red tape around the reform generally, as well as to support individual projects, with the first large registrations, involving two 100 MW solar photovoltaic (PV) projects in the North West province, approved in late May.

Of the latest 16 registrations, five projects are above 5 MW in size, with the largest project being an 80 MW solar PV facility, in Limpopo.

The majority of the projects, however, remain below 1 MW in size and are described as ‘own use’ facilities by Nersa.

The commercial projects for which registration certificates were approved and power purchase agreements noted, included:

Lephalale Solar’s 80 MW solar PV facility, in Limpopo;

Msenge Emoyeni’s 72 MW wind project, in the Eastern Cape;

Richtersveld Sunspot’s 40 MW solar PV facility, in the Northern Cape;

Sturdee Energy’s 10 solar PV project, in Limpopo; and

Terradew Three’s 0.77 MW facility, in Limpopo.

The largest own-use registration related to a 5 MW solar PV project, which will be developed for chemicals group Omnia in Sasolburg, in the Free State.

Nersa reports that cumulative registrations under both the 100 MW reform and the previous regime, which had a 1 MW threshold for grid-connected projects, have increased to about 600 and that the registered facilities have a combined capacity of 503 MW.

Mercedes-Benz South Africa (MBSA) will dispose of the passenger car business of its Gauteng West own-retail operations, as well as a portion of its commercial vehicle business, held in Sandown Motor Holdings (SMH), to the Motus Group. The value of the deal is not disclosed.

SMH is a wholly-owned subsidiary of MBSA.

The proposed disposal of SMH forms part of MBSA’s implementation of Project Focus, which resulted in the earlier spin-off of Daimler Truck from the Mercedes-Benz car business on a global level.

The rationale for the spin-off was to enable Mercedes-Benz and Daimler Truck greater entrepreneurial flexibility and agility, the independence to focus on its strategic direction in respect to electric mobility transformation, improved customer centricity and the opportunity to unlock their full potential.

“MBSA’s proposed sale of SMH is the next logical step in the growth of our company,” says Mercedes-Benz Cars and MBSA executive director Mark Raine.

“A simplified corporate structure will enable MBSA to focus on the next phase of the company’s growth premised on customer centricity, and the . . . Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Mercedes-EQ brands.”

The proposed disposal will include the following dealerships: Mercedes-Benz Sandton, Mercedes-Benz Constantia Kloof, Mercedes-Benz Bryanston and a single commercial vehicle dealership in Roodepoort.

The National Rail Policy White Paper will see the rail network opened to participation by the private sector, along with a progressive national move to standard gauge to increase the average speeds of trains, Transport Minister Fikile Mbalula and Public Enterprises Minister Pravin Gordhan said on June 2.

"Rail is an asset to make a country's logistics and freight transport more efficient. The White Paper provides policy certainty and aims to introduce radical structural reforms to enable broader participation in the industry, open new avenues of investment and enable competitiveness," Mbalula said during a visit to the Rhodesfield train station, in Kempton Park.

The policy White Paper intends to determine and enact the structural reforms necessary not only to bring about competition in the railway system, but also to enable private sector participation through concessions, he noted.

"The network industries, such as rail, play a critical role in the efficiency and reliability of an economy and the competitiveness of the economy from an internal and external point of view. The logistics component of the network industries is important for South Africa and across the globe in terms of whether commercial activity in a country takes place properly, with the right services to enable businesses to operate," said Gordhan.

Further, as highlighted by the disruptions caused by the KwaZulu-Natal flooding in April, rail has a significant impact on whether South Africa can trade effectively, including connecting ports and sites of productive activity, as well as enabling the country to import what it needs and, more importantly, to ensure products can leave the country's shores efficiently, he said.

The National Rail Policy, through remedial investment, and market and institutional interventions to lift rail's competitiveness, intends to place rail on a sound footing to collaborate with, and compete against, the other transport modes to position it to serve as the national land transport backbone by 2050.

"The White Paper intends to position rail as the backbone of a seamless, integrated transport value chain that makes a meaningful contribution to the economy. The aim is to achieve a rail renaissance. We aim to position rail to contribute to economic transformation and a reduction of harmful greenhouse-gas emissions," Mbalula said.

A key thrust of the policy is to enable railway investment by exploiting the 'genetic' benefits of rail as a technology, which is well suited for heavy haul, heavy intermodal and commuter and urban rapid transportation, and enable speeds between 160 km/h to 200 km/h, and up to 300 km/h on certain sections, Mbalula said.

Railways that use inappropriate and outdated technologies are inherently less competitive than railways that use appropriate and contemporary technologies. South Africa takes pride in the long, heavy-haul trains on its narrow gauge railways, but, in terms of axle load and speed, the country's performance is mediocre compared with countries with standard gauge railways, the White Paper states.

"Exploiting rail's genetic technology will enable the sector to increase axle loads, speed and train lengths, and thereby improve productivity. The White Paper is a multi-decade vision to evolve rail through government and private sector participation and investment," said Mbalula.

Further, the policy's remedial interventions aim to ensure infrastructure investments to enhance rail's competitiveness, and the secondary interventions aim to adjust institutional arrangements to ensure that rail functions effectively in delivering its share of the national transport task, he said.

"Our interventions in terms of the policy seek to open the industry and give the private sector an opportunity, not through privatisation, but through participation, to bring resources and bigger support to ensure the rail system is in a position to deliver [according to the needs of the economy]," said Mbalula.

Private concession o...

The National Rail Policy White Paper has a deliberate bias towards local manufacturing to ensure industrialisation and the local production of steel, railway lines, rolling stock and supplies, and the State and private sector operators should procure all supplies from South African manufacturers, Transport Minister Fikile Mbalula said this week.

"The obsolete state of much of our rail infrastructure and rolling stock, and the limitation imposed by narrow gauge tracks, as well as the underuse of the existing rail network, are some of the most notable challenges facing the sector," he stated.

The National Rail Policy provides an important opportunity to build and strengthen local manufacturing capacity in South Africa. The localisation strategy will be used to develop the industrial base for an active export strategy, particularly for exports to other African countries, and will also support the Steel Master Plan, the policy document states.

Local manufacturing can include steel of the right qualities and quantities, rail lines and supplies, including railway sleepers, rail joints, fastening systems and switches and control systems hardware and software, as well as rolling stock, including locomotives and engines, wagons and passenger coaches.

The State will take active steps to help develop the technology, skills and manufacturing capacity locally to ensure production of rail-related products increases gross domestic product, jobs and economic inclusivity, the White Paper states.

However, rail uses many systems and technologies that set it apart from other transport modes and industries. Therefore, skills development must rest to a large extent on sector initiatives.

The rail sector employs only 7% of the country's transport industry workforce and, while the resumption of investments, such as in the Gautrain, Transnet locomotives and Passenger Rail Agency of South Africa commuter trains, has re-established skills development channels, there remains a long way to go in terms of skills development, the policy paper states.

BRANCH LINE RECOVERY

Meanwhile, the short-term interventions from now until 2024 will focus on developing the National Rail Bill and the sector master plan, although the Department of Transport will not wait for the finalisation of the master plan before implementing structural reforms in consultation with stakeholders, Mbalula said.

Additionally, short-term interventions will aim for the recovery of rail corridors by providing branch line concessions and third-party access.

In recognition of the important role private sector participation can play in bridging the investment gap, and improving operational and managerial capabilities, the department has established an implementation protocol to drive development and implementation of the plan, which has identified strategic branch lines to recover over the short- to medium term, Mbalula said.

"Agriculture and agricultural exports are a key industry and require that attention is focused on revitalising branch lines to support sustainability and growth in the industry. Agricultural exports over the past decade have achieved continuous annual growth in volumes and [export] revenue for South Africa and is a significant growth industry," he noted.

Rail's competitiveness will be maximised by investing in infrastructure, restoring capacity and investing in modern technology on the national rail network, as well as rehabilitating metropolitan commuter networks.

Investment in infrastructure will, over time, redress and rebalance the significant differences between rail and road asset value and market shares, the White Paper states.

Additionally, the National Rail Policy aims to position the rail sector to start making important contributions to national climate change commitments to 2050, as rail has the lowest energy consumption of all modes of transport for specific tasks, such as heavy haul and heavy intermodal.

Rail is well-positioned to substantially reduce the o...

Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about the latest developments in the Risk Mitigation energy procurement programme, what the prospects are for all the energy procurement projects that are under way, efforts to streamline processes for both utility and embedded generation projects and Mineral Resources and Energy Minister Gwede Mantashe's announcement that the Integrated Resource Plan 2019 will be updated.

Minerals Resources and Energy Minister Gwede Mantashe reported on Thursday that the Integrated Resource Plan of 2019 (IRP 2019), which is widely acknowledged to be out of date, will be reviewed.

However, he said he could not yet provide a timeframe for the publication of the update or indicate what process would be followed.

Speaking at a ceremony held to sign power purchase and implementation agreements for three solar-battery hybrid projects to be developed at a cost of R16-billon by Scatec and H1 Holdings in the Northern Cape, Mantashe indicated that the decision to update the document had been taken at a recent Cabinet retreat.

He reported that President Cyril Ramaphosa requested his Ministers to identify “burning platforms” within their portfolios and that he had identified ongoing load-shedding as the key problem facing his portfolio and that of the economy.

“The last three days, we have been locked away in the bush and the President asked us a simple question: what are the burning platforms in your areas of work?

“In my area of work, the burning platform that we identified was load-shedding.”

He said the decision to review the IRP 2019 had been made too recently to provide specifics on either the timing or process to be followed but indicated that it would involve an intensive reassessment of the plan’s assumptions and likely involve public consultation.

In the meantime, he said efforts would be made to accelerate the implementation of the IRP 2019 through a streamlining of procurement processes for the more than 13 000 MW already catered for in the IRP 2019.

Besides seeking to conclude agreements for the eight remaining projects under the controversial Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), following the signing of the first three project agreements, Mantashe was keen for Bid Window Five (BW5) of the renewables programme to close in line with the new staggered deadline and for BW6 to avoid any delay.

In addition, he indicated that BW7 could be upscaled from the initial determination, which catered for the procurement of only 1 600 MW of onshore wind.

Mantashe also said a gas-to-power bidding programme would be opened along with one for new coal, although he anticipated that the coal programme could face a legal challenge.

The Minister lamented the time it was taking to complete the procurement of much-needed new electricity capacity and said a formula had to be found to cut the time it was taking for processes to be completed and “make it easier to do business in South Africa”.

He also said that Eskom needed to do more to expand the grid and expressed the hope the unbundling of the transmission entity would open up the market as a “wheeler and dealer” in energy.

Eskom CEO André de Ruyter responded by acknowledging the grid constraint, but also highlighted the opportunity that existed to build new generation in Mpumalanga where capacity already existed and where even more would become available as coal plants were decommissioned.

IPP Office CEO Bernard Magoro said that many lessons had been learned from the RMIPPPP, which was the first procurement process to be implemented after the stalling of procurement in 2015 when Eskom’s then leadership refused to enter into power purchase agreements with new renewables producers.

He also said that it was working with Infrastructure South Africa and Operation Vulindlela to streamline the associated processes – including the securing of environmental authorisations and licences – that needed to be followed when procuring new generation capacity.

“As government, we can do a lot to refine our processes,” Magoro said, arguing, for instance, that environmental authorisation appeals should not be taking as long to resolve as they were currently.

A consultant had also been appointed to analyse the local market capacity for solar module manufacturing, in light of the concerns raised by bidders after modules were designated to be procured locally.

“T...

Japanese mobility group Toyota and its subsidiary Woven Planet have developed a working prototype of a portable hydrogen cartridge.

This cartridge design is set to facilitate the everyday transport and supply of hydrogen energy to power a broad range of daily life applications in and outside of the home.

Toyota and Woven Planet will conduct proof-of-concept trials in various places, including Woven City, a human-centered ‘smart city of the future’ currently being constructed in Shizuoka Prefecture, in Japan.

Toyota believes hydrogen cartridges offer numerous benefits.

They are portable (5 kg in weight), affordable and convenient as they make it possible to bring hydrogen to where people live, work and play without the use of pipes, and they are also swappable for easy replacement and quick recharging.

The small-scale infrastructure associated with the cartridges can also meet energy needs in remote and non-electrified areas, as well as during disasters.

Toyota notes that hydrogen is currently largely generated from fossil fuels and used for industrial purposes such as fertiliser production and petroleum refining.

“To use hydrogen as an energy source in our homes and daily life, the technology must meet different safety standards and be adjusted to new environments.

“In the future, we expect hydrogen that will be generated with very low carbon emissions and used in a wider variety of applications. The Japanese government is working on a range of studies to promote the safe, early adoption of hydrogen and Toyota and its business partners are excited to offer their cooperation and support.

“Our goal is to help hydrogen become commonplace by making this clean form of energy safe, convenient and affordable,” says the vehicle manufacturer.

“By establishing the underlying supply chain, we hope to facilitate the flow of a larger volume of hydrogen and fuel more applications.

“Woven City will explore and test an array of energy applications using hydrogen cartridges, including mobility, household applications, and many future possibilities we have yet to imagine.”

The South Africa government and Eskom have signed agreements with three of the 11 projects named as preferred bidders in March 2021 under the much-delayed Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).

The 20-year power purchase agreements (PPAs) and associated implementation agreements were signed on June 2 with Scatec, of Norway, for three solar-battery hybrid projects that will provide 150 MW of dispatchable renewable electricity from 5:00 in the morning to 21:30 in the evening.

The three projects were not initially included among the eight preferred bidder projects selected in March last year, but were added a few months later, increasing to 1 995 MW the capacity being procured under the RMIPPPP.

The original list of projects was dominated by three Karpowership gas-to-power projects, which subsequently faced environmental and legal objections and obstacles that are yet to be cleared.

Known as Kenhardt 1, 2 and 3, the first-of-a-kind projects will be built in the Northern Cape and will have a combined solar photovoltaic (PV) footprint of 540 MW and battery storage capacity of 225 MW/1 149MWh.

The projects include a self-build component for the power line and substation infrastructure required ahead of connection to the Eskom grid.

The bid evaluation price announced at the time of project selection was about R188c/kWh.

The R16-billion investment will be funded through a combination of debt (80%) and equity (20%) and the projects have 60 days to achieve financial close, before entering into an 18-month construction period.

Scatec estimates that 4 968 job opportunities will be created during the period.

The debt is being provided by Standard Bank, which is also the mandated lead arranger and underwriter, and British International Investment, while Scatec (51%) and H1 Holdings (49%), a black-owned and -managed company, are the equity partners.

Scatec CEO Terje Pilskog described the signing, which took place in Centurion, Gauteng, as a landmark and said the hybrid projects were not only unique in South Africa, but would also be among the largest renewable energy and storage projects globally.

Pilskog also expressed confidence that construction would not be affected by supply chain disruptions, despite the fact that the bulk of the components were being source in China.

Scatec and H1 Holdings also stressed that all local-content obligations would be met.

Originally, solar PV modules were designated to be supplied 100% from South Africa, but that threshold was later reduced to 35% following engagement between the preferred bidder and the Department of Trade, Industry and Competition.

Mineral Resources and Energy Minister Gwede Mantashe, who presided over the signing ceremony, indicated that he would like all 11 projects selected under the “emergency procurement round” to reach financial close, including the controversial Karpowership projects.

He said the capacity was needed to reduce the ongoing risk of load-shedding, which he described as a “burning platform” for the country.

IPP Office CEO Bernard Magoro said that there had been ongoing engagements with the other bidders ahead of the latest RMIPPPP deadline for financial close, but that none of the other projects were in a position to sign.

He said no decision had yet been taken to disqualify the outstanding projects, and that every effort would be made to ensure that they too achieved financial close.

“Should the remaining matter not be resolved, the department and other stakeholders will refer this back through the required governance structures to agree the next steps,” Magoro said.

Eskom CEO André de Ruyter expressed delight at both the conclusion of the PPAs and the fact that the contracts were the first to include a new antibribery clause; one which would feature in all future procurement with IPPs.

While far more capacity was required to reduce the threat of load-shedding, De Ruyter described the IPP market as vibrant and active, with 7 20...

The road transport sector can still reach the target of net-zero emissions by 2050 through electrification, but urgent action is required from policymakers and industry participants­ ­– this according to research company BloombergNEF’s (BNEF’s) latest yearly Long-Term Electric Vehicle Outlook (EVO).

Certain segments, such as buses and two- and three-wheelers are close to being on track for net zero, but action is needed to get on track elsewhere, especially in the medium and heavy commercial vehicle segments, notes the report.

“The window to stay on track for net-zero road transport emissions by 2050 is still open – but only just barely,” says BNEF electric vehicles (EV) head Aleksandra O’Donovan.

“A big push is needed from governments, automakers, part suppliers and charging infrastructure providers in the years ahead.”

The EVO report outlines two scenarios for the uptake of electric transport to 2050.

The Economic Transition Scenario, which assumes no new policies and regulations are enacted, is primarily driven by techno-economic trends and market forces.

The second scenario investigates what a potential route to net-zero emissions looks like for the road transport sector by 2050. This Net Zero Scenario looks primarily at economics as the deciding factor in whether drivetrain technologies are implemented to hit the 2050 target.

Sales Rising Rapidly

Passenger EV sales are set to grow rapidly in the next few years, rising from 6.6-million sold in 2021, to 21-million in 2025.

The fleet of EVs on the road is set to hit 77-million by 2025 and 229-million by 2030, based on BNEF’s economic transition scenario.

That’s up from 16-million units at the end of 2021.

As EV uptake continues to grow, they are already displacing 1.5-million barrels of oil demand a day, says the EVO report.

Most of this is from electric two- and three-wheelers in Asia, but rising passenger EV sales should push this to 2.5-million barrels a day by 2025.

Overall, oil demand from road transport is now set to peak by 2027, according to BNEF’s findings, as electrification spreads to all other areas of road transport beyond passenger cars.

Sales of internal combustion engine (ICE) vehicles already peaked in 2017 and BNEF expects the global fleet of ICE passenger vehicles to start to decline in 2024.

To get on track for a net-zero global fleet by 2050, zero-emission vehicles need to represent 61% of global new passenger vehicle sales by 2030, 93% by 2035, and the last ICE vehicle of any segment needs to be sold by 2038.

“EVs are a powerful tool in reducing global carbon dioxide (CO2) emissions from the transport sector,” says BNEF advanced transport team head and EVO report lead author Colin McKerracher.

“There are very positive signs that the market is moving in the right direction, but more action is needed – especially when it comes to heavy trucks. Action also needs to focus on emerging markets, which need financial support to help enable and accelerate the transition to electric mobility of all types.”

According to BNEF, developed countries and multilateral institutions should include EV investments, incentives and charging infrastructure deployments in their international climate finance plans, making capital available to emerging economies that have credible plans to develop this sector.

Concessional finance has been a key enabler for the development of renewable power generation in emerging economies and could play a similar role in the EV sector.

Net Zero Scenario

The fleet of passenger EVs is set to hit 469-million in 2035 in the Economic Transition Scenario, but needs to jump to 612-million by the same date in the Net Zero Scenario, says BNEF.

Much of the gap will have to be met in emerging economies, while wealthy countries should look at ways to support the transition in those markets and avoid a global slowdown of adoption.

Looking at different segments, two- and three-wheelers and buses are already very close to the trajectory needed to achieve B...

Domestic new-vehicle sales in May inched up 2.1%, to 39 177 units, compared with the same month last year.

Naamsa | The Automotive Business Council says this marginal growth reflects the damage caused by the severe floods in KwaZulu-Natal in April, as well as the myriad of headwinds increasingly bruising economic growth and consumers’ disposable income. These include rising interest rates, soaring fuel prices and continued load-shedding.

The new-passenger-car market reached 27 437 units in May – a 13.8% jump on the same month last year.

The car rental industry supported the new-passenger car market during the month and accounted for 10% of sales.

Sales of new bakkies, vans and minibus taxis bore the brunt of the flooding in KwaZulu-Natal, with sales dropping by 22.6%, to 9 221 units.

The Toyota plant in Durban, which assembles bakkies and minibus taxis, saw very little production for the entire month of May.

May medium-truck sales grew by 11.8%, reaching 614 units, while heavy-truck and bus sales grew by 7.1%, to 1 905 units.

Exports was also heavily impacted by the flooding, and plummeted by 30%, to 25 786 units.

This comes as Toyota also produces vehicles for export, while the Port of Durban and its various logistics chains were also damaged during the natural disaster. Some key export markets also experienced challenges, notes Naamsa.

Year-to-date vehicle exports from South Africa are now 6.2% below the figure for the same period last year.