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Any public steps by South Africa that were suggestive of new coal having a place in the country’s future energy mix would be inconsistent with the intentions of the Just Energy Transition Partnership (JET-P) signed at COP26 in November, US Treasury climate counselor John Morton has cautioned.

The partnership, which was also signed by France, Germany, the UK and the European Union (EU), includes an offer of $8.5-billion in climate finance to support South Africa’s transition from coal and negotiations are currently under way to convert the offer into an investment plan ahead of COP27, scheduled for Egypt in November.

“While South Africa has made great progress in carrying out necessary reforms, we must be cognizant of new and avoidable challenges to South Africa's clean-energy future.

“When it comes to new coal, we emphasise the need for a continued shared commitment to the climate ambition South Africa put forward in the JET-P and its goal of an energy transition.

“And we would be concerned about any public steps that suggest new coal has any place in South Africa's future energy mix,” Morton said during a recorded address to the Enlit Africa conference, under way in Cape Town.

“Any new coal generation capacity would be inconsistent with South Africa's updated Nationally Determined Contribution (NDC) and would be inconsistent with the spirit and intentions of our shared partnership, which aims to expedite South Africa's transition away from coal and toward a cleaner and greener energy future.”

Morton said the US was sympathetic to South Africa's energy security needs and praised recent reforms designed at facilitating new private investment, including the increase in the licensing threshold on embedded generation projects to 100 MW and moves to unbundle Eskom and create an independent transmission entity.

He emphasised, however, that the US government saw the expansion of renewables as the most promising and economical path forward.

South Africa’s Integrated Resource Plan of 2019 (IRP2019) still includes an allocation of 1 500 MW of new coal to be introduced before 2030 and government has indicated that it plans to continue with the implementation of the plan, which is widely considered to be outdated, while pursuing a review.

Speaking ahead of Morton’s address, Department of Mineral Resources and Energy deputy director-general Jacob Mbele indicated that government intended implementing a procurement pipeline of 13 000 MW by 2027 as catered for in Section 34 Ministerial determinations that facilitate procurement in line with the IRP2019.

“We intend to issue, during this financial year, a Section 34 determination for the remainder of the capacity allocations in the IRP,” Mbele said, stressing that these allocations were made up primarily of renewable-energy technologies.

Morton argued that the JET-P and the “initial pledge” of $8.5-billion seeks to support South Africa achieve “the most ambitious end of its revised NDC which aims toward a 1.5 oC global warming trajectory”.

COMPREHENSIVE INVESTMENT PLAN

He reported that the development of a “comprehensive investment plan” was viewed as the next key step, as such a plan would act as the “North Star of this partnership” and define where and how South Africa felt the finance would be best directed.

“While we are awaiting an investment plan to guide this financing, we envision that the US contribution to the $8.5-billion could include loans, equity investments, [and] grant finance for technical assistance, feasibility studies and pilot projects from a variety of US government agencies.”

Federal Republic of Germany Consul General in South Africa Tanja Werheit also offered further insight into Germany’s contribution to the package.

She revealed that 20% of its $800-million contribution would take the form of grant finance, while the balance would be disbursed as loans.

Werheit stressed, too, that as a multi-decade undertaking the JET-P should be directed by the government of South ...

The Council for Scientific and industrial Research (CSIR) has confirmed that 2021 surpassed 2020 as South Africa’s most intensive load-shedding year to date, as the performance of Eskom’s coal fleet continued to deteriorate.

Load-shedding occurred for 1 169 hours, or 13% of the year, with an upper limit of 2 521 GWh, representing a 40% increase compared with the 2020 load-shedding upper limit of 1 798 GWh.

The energy availability factor (EAF) of Eskom’s coal-heavy fleet fell to 61.8% for 2021, from 65% for 2020, 66.9% for 2019 and 71.9% in 2018.

There has been little sign of a marked recovery in the EAF during 2022, despite an intensification of planned maintenance in recent years. For the year to end March, the State-owned utility reported an overall EAF of 62% but load-shedding has intensified since then with the coal fleet’s EAF dipping well below 60% at times.

South Africa’s Integrated Resource Plan of 2019 (IRP 2019), which outlines the technologies needed to ensure supply security to 2030, assumes an EAF of 70%, rising to 75% by mid-decade, and an immediate shortfall of supply of about 2 000 MW.

The supply deficit is currently considered to be far larger, with Eskom calculating the shortfall to be between 4 000 MW and 6 000 MW.

Mineral Resources and Energy Minister Gwede Mantashe announced last week that Cabinet had decided to review the IRP 2019, which is regarded as being outdate on more than only its EAF assumptions.

Mantashe also said the plan would extend beyond 2030, but he did not provide a specific timeframe for the completion of the review.

The CSIR indicates that the intensification of load-shedding could be attributed largely to the increase of unplanned outages across Eskom’s coal fleet, a trend that has continued into 2022.

Eskom has indicated that there could be as many as 104 days of load-shedding this winter and another 191 days during the summer months.

“Load-shedding in 2021 overtook 2020 as the most intensive year of load-shedding to date, with load-shedding concentrated in October and November, and dominated by Stage 2 load-shedding overall,” the CSIR states.

During the first half of the 2022 calendar year, rotational power cuts have been implemented up to Stage 4, or 4 000 MW.

The statistics also show that, in 2021, the total system demand increased by 6.5 terawatt hours (TWh), a 3% increase compared with total system demand in 2020. However, total system demand last year was still 5.3 TWh, or 2%, lower than pre-lockdown levels of 2019.

Coal still dominates the South African energy mix, providing 81.4% of the total system load. The contribution of renewable energy technologies increased in 2021 to a total of 5.7 GW installed capacity and provided 6.6% of the total energy mix.

JSE and ASX-listed emerging helium and natural gas producer Renergen has signed a retainer letter with the US International Development Finance Corporation (DFC) for a possible $500-million loan to finance the Phase 2 development of the company’s Virginia gas project, in the Free State province of South Africa.

DFC provided $40-million in financing for Phase 1 operations and is currently screening the proposal for Phase 2 financing.

Renergen says it is considering co-lenders alongside DFC, after receiving multiple letters of intent from additional lenders.

All lenders are in the process of reviewing Phase 2 information and will be conducting an on site inspection of the Phase 1 operations, as part of the necessary due diligence.

For Phase 2, Renergen plans to secure 65% debt funding, while equity funding will comprise the balance.

“We find ourselves in a strong position as we embark on turning on the Virginia gas project plant in coming weeks. The company has grown significantly in size and scale and, importantly, now has the ability to sculpt terms to suit our financing requirements,” comments CEO Stefano Marani.

The Virginia gas project spans 187 000 ha of gas fields across Welkom, Virginia and Theunissen, in the Free State. The full project entails the construction of a 52 km gas-gathering pipeline and cryogenic liquefication processing facilities.

Phase 1 is expected to produce 350 kg/d of helium and 50 t/d of liquefied natural gas, with Phase 2 earmarked to increase these numbers.

As of May 30, the Phase 1 plant was being commissioned.

The Toyota Corolla Cross has been named as the 2022 Car of the Year (COTY) by the South African Guild of Mobility Journalists (SAGMJ).

The category winners for this year’s competition are:

Compact Category: Toyota Urban Cruiser

Compact Family Category: Toyota Corolla Cross

Midsize Category: Mercedes Benz C-Class

Performance Category: Volkswagen Golf GTI

New-energy Category: Toyota Corolla Cross Hybrid

Adventure Sports-Utility Vehicle Category: Toyota Landcruiser 300

Double Cab 4 X 4 Category: Nissan Navara

Jurors’ Excellence Award: Mercedes Benz C-Class

Motor Enthusiasts Choice: Peugeot 208

The Budget and Premium categories did not have any 2022 contenders.

Introduced in 2021, the Jurors’ Excellence Award considers only the raw scoring of the jurors without automated scoring factors.

The overall winner includes additional scoring criteria, such as sales, segment share and specification adjusted pricing.

The South African COTY trophy has been awarded since 1986.

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...