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The Department of Mineral Resources and Energy (DMRE) says it is unaware of Eskom’s ‘standard offer’ instrument, through which the utility claims it could potentially secure an immediate 500 MW from private generators with surplus electricity.

Eskom CEO André de Ruyter listed the standard offer among several short-term interventions that should be enabled immediately to ease pressure on the country’s load-shedding-prone grid.

He said that the mechanism had been approved by the Eskom board in August and that, once authorised by government and the regulator, it would enable Eskom to issue a request for bids from small private generators to sell electricity into the grid under three-year contracts.

However, for the standard offer to be activated, Eskom indicated that it would require a Section 34 determination under the Electricity Regulation Act to enable it to buy the electricity, as well as an exemption from some of the requirements of the Preferential Procurement Policy Framework Act.

In addition, the utility would require the concurrence of the National Energy Regulator of South Africa (Nersa), as well as the regulator’s assurance that it could recover the costs through the tariff.

However, in a subsequent interview with Engineering News, DMRE deputy director-general Jacob Mbele indicated that the department was not aware of the proposal and questioned whether it had ever been tabled during one of its monthly meetings with the utility.

“Actually, I picked it up for the first time in the media and this is something that has not been presented to us,” Mbele said, while confirming that he was the official appointed to engage directly with Eskom.

He noted that the DMRE had supported Eskom in its preparations for the short-term power purchase programme (STPPP) by publishing a Section 34 determination.

Eskom decided to abandon the STPPP, however, after Nersa refused to approve a cost-recovery mechanism through the tariff for the purchase of about 120 MW from eight generators.

Engineering News requested Eskom to provide details of its communications with the DMRE on the standard offer and the utility responded saying that a formal request for a Ministerial determination was made to the DMRE on January 6, 2022.

"Eskom is following up on the correspondence as we have not had a response so far."

Nevertheless, Mbele stressed that the department was more than willing to assist in ensuring the injection of much-needed electricity, even though the immediate opportunities were limited.

It was, thus, focusing on completing the various bidding processes under way for new electricity, including the risk mitigation procurement programme and bid windows five and six of the renewables procurement programme.

However, it was factoring in about 160 MW from existing renewables independent power producers (IPPs) into its plans; capacity also referred to by De Ruyter as an immediate supply option.

Eskom estimates that about 200 MW could be secured from these generators once the IPP Office approved the sale of electricity to Eskom above their current contractual limits.

Mbele indicated that it had been agreed that this electricity should be sold at the wholesale electricity price and denied that either the DMRE or the IPP Office were standing in the way of implementation.

The department was also willing to work with Eskom and the IPP Office to facilitate a proposal that the IPP plants be enhanced to inject a further 200 MW in the near term.

Mbele also questioned suggestions that Nersa registration was the main and only impediment to distributed generators taking advantage of the recent reform enabling sub-100 MW projects to proceed without a licence, even in those instances where electricity is wheeled through the grid and sold to third parties.

He said many of the projects remained “conceptual” and required various other approvals, including grid connection quotations from Eskom, before they could proceed.

Eskom group executive for distribution Mon...

The flood damage to the Toyota assembly plant in Prospecton, Durban, has not yet been fully quantified, with a forecast on the resumption of production to be provided once all the appropriate assessments have been completed, says Toyota South Africa Motors (TSAM).

Production was suspended following citywide flooding earlier this month.

TSAM notes that the plant had “numerous upgrades” following the 2017 floods, as a countermeasure to similar future events.

These included the installation of pumps and piping within the plant to disperse water, as well as regular maintenance of the water-drainage channels surrounding the facility.

These measures were, however, “no match for the mass of water that breached the facility when the banks of the Mlazi river broke”.

“Our approach and response is to prioritise our staff and their families, ensuring that their safety and wellness comes first,” says TSAM president and CEO Andrew Kirby.

“This will then be followed by the communities around us, including our extended Toyota family – our dealers and suppliers. In fact, we have already put plans in place to make a sizeable donation to a nongovernment organisation to assist local communities.”

From a sales perspective, Toyota confirms that the disaster has impacted on its immediate ability to deliver vehicles.

As the longstanding sales leader in South Africa, with a 25.4% market share in South Africa in 2021 (which means one in every four new vehicles sold in the country is a Toyota), the disruption within the Japanese car maker’s local network is set to have a significant impact on domestic new-vehicle sales in April, as well as on export numbers from South Africa.

TSAM produces the Corolla Cross, Fortuner, Hiace Ses’fikile minibus and Hilux bakkie for the local market, while some models are also exported – most notably the Hilux. The Prospecton operation also hosts the Hino truck assembly plant.

TSAM sold 15 000 new vehicles in South Africa in March alone, with both its exports and imports, such as the popular Starlet, moving through the Port of Durban, which also suffered damage in the floods.

TSAM’s new-vehicle exports reached 6 837 vehicles last month.

Of the total number of water-damaged vehicles assessed following the flooding, 500 units have passed inspection and will be retailed, says TSAM.

The remainder – not quantified – will be scrapped.

TSAM sales and marketing senior VP Leon Theron says customers whose vehicles were destroyed will be prioritised.

“This will be easier to facilitate with imported vehicles as these are sourced from other plants.

“Of course, there is a pipeline for all imported vehicles, but we will try to increase this supply in order to make up for the units lost.”

The news is less positive for customers of locally produced vehicles.

“Locally-produced models, such as the Hilux, are more of a challenge and we will be personally reaching out to customers to inform them of the delays in production,” says Theron.

UK-based sustainable logistics company Magway has secured its first commercial customer in the form of a large Fortune 500 multinational group, says CEO and founder – and South African – Rupert Cruise.

Magway is a zero-emission delivery system (when powered by renewable energy), consisting of carriages running at speed, on a track, on a network of overground or underground pipes that are around one meter in diameter.

The network can span a distance ranging from a few hundred meters to tens of kilometres. The carriages can move horizontally or vertically, even inside buildings, owing to its small diameter, explains Cruise.

Apart from very low energy use compared with other transport methods, including electric vehicles, the system is also green as it replaces delivery vehicles in the middle-mile of the logistics chain. This means it also reduces traffic congestion.

Magway’s technology adopts electric linear motors to power the carriages. Deliveries can be timed to the second, with a tracking system allowing the customer and the service provider to monitor where deliveries are located within the system, while also reporting on the general health of the goods.

For the 49-year-old Cruise, Magway’s first big customer is a timely coup as his company moves from startup to scaleup.

Cruise graduated in 1994 with a BSc in electrical engineering from the University of the Witwatersrand (Wits); his final-year project investigated the control of linear induction motors for deep-level mining hoists.

He filed his first patents on linear motors in 1998.

Cruise worked on a number of South African mine-related projects, before starting an MBA at Oxford University in 2000 on the back of the gold price sliding to $280/oz.

He settled in London in 2001, starting a company called Texchange. In 2015, this became Linear Motion Technologies (LMT), with Magway spinning out of LMT in 2017.

Projects on Cruise’s CV include designing linear synchronous motor systems for a US Navy aircraft carrier, working in partnership with Chris Lines, a master’s student at Wits.

Cruise and Lines also assisted Hyperloop One (later to become Virgin Hyperloop One) on the analysis of the design of the company’s linear motors and eddy current brakes.

Today, Cruise, his wife and children live in North West London.

Materials Mover

Magway’s first customer visited its facility in September 2020, says Cruise.

The Magway building houses a 65 m loop track, demonstrating the viability of the technology, while it also provides the engineering team the opportunity to continuously refine the system.

“Once the client saw the test track, we spent the next six months negotiating a mutual collaboration agreement. We then kickstarted the project in March 2021,” says Cruise.

“Over a nine-month period, we went from concept to full-scale design for a Magway system to move materials within this company’s industry.

“Unfortunately we can’t say who they are, only that they operate outside our initial core focus, which is to decarbonise e-commerce.”

Cruise tells Engineering News Online that Magway is “helping the customer to transform its business, which has been operating in the same manner for the past 150 years, to become more sustainable”.

“These guys have a whole division looking at how tech can be used to make their business more sustainable.”

“What we are doing is much the same as in 1995, but a lot has also changed,” notes Cruise. “The technology has shrunk in size and come down in price significantly. Add to that more processing power and smarter data communication and all of a sudden you have a very flexible, very green delivery network.”

Cruise explains that Magway will not construct the transport system for its first client.

“We’ll do the design and the software, but someone else will manufacture and build the system. For our first commercial small plant we’ll operate it jointly.”

Cruise adds that Magway has had “phenomenal growth” over the past year.

“We grew the team by 200%. We hav...

JSE-listed freight and logistics group Grindrod says its container depots, terminals and warehouse facilities in and around central Durban have been heavily impacted by the recent floods in KwaZulu-Natal, with operations at five sites suspended – “and likely to be so for several weeks”.

“We are grateful that all our staff, and our service providers’ staff, are accounted for and are safe,” notes the company.

“The impact to Grindrod includes damage to equipment and infrastructure.

“Activity to recover customer containers and restore facilities has commenced, in collaboration with our insurers,” says the company.

“Whilst the floods have been devastating, our equipment and facilities that have been damaged are all insured, including cover for business interruption.

“In addition, engagement with key customers is underway around contingencies, including those required for the upcoming citrus season.”

Grindrod says it continues to take the necessary precautions in view of the heavy rains still being forecast over the next few days.

“The safety of our staff is our main priority. The situation is challenging, and our solutions are evolving as we focus on supporting our people, our communities and our customers.”

Force Majeure at Matola Terminal

Operations at Grindrod’s Matola terminal, at the Port of Maputo, in Mozambique, were also impacted this month when a force majeure was declared after a ship collision damaged port infrastructure at the terminal.

“Discussions with the port authority and insurers are ongoing, and ship-loading operations are expected to commence this month,” notes the company.

From the perspective of State-owned Transnet National Ports Authority (TNPA), Durban harbour is fully functional, with gradual improvements expected to take place where gaps in functionality occur, Public Enterprises Minister Pravin Gordhan said during a media briefing on April 19.

“Ships are coming in, ships are going out and the necessary work is being done by the TNPA to ensure the harbour is in the state where it can be used,” he said, providing an update on operations following the severe weather and rainfall in KwaZulu-Natal last week.

Gordhan said a dredger was on its way from Cape Town to Durban to assist in clearing up the significant amount of debris that washed into the harbour from the harbour’s many tributaries.

In terms of accessing the harbour from land, part of Bayhead road had been reopened after urgent repairs were conducted. The road is a key access route to the harbour.

Gordhan said an alternate route was also being prepared and would be ready by mid-year, to prevent the port from being inaccessible ever again.

“That's another lesson that we've learned in terms of building in redundancy on our side as far as imports and exports are concerned,” Gordhan explained.

In terms of rail access, a variety of repairs needed to be conducted in several places along the tracks throughout KwaZulu-Natal following the collapse of rail-bearing embankments and mudslides.

The damage ranged from rails simply being covered with mud and debris, to rails being left hanging and twisted in mid-air and the embankment under it gone. This could take up to eight weeks to repair, Gordhan said.

TNPA Durban port manager Mpumi Dweba told Engineering News & Mining Weekly that, while the rail infrastructure was built to the highest standards, the unprecedented amount of rain really showed that a lot of work needed to be done in terms of making sure the tracks were strengthened and maintained against future possible floods.

She also said the encroachment of illegal settlers onto railway servitudes and sidings had interfered with the drainage systems, worsening the flooding and resulting damage.

“We are continuously doing maintenance on the lines, but it is hampered by access into some areas, but it's something that we're working on,” she said.

Eskom CEO André de Ruyter has appealed for an immediate easing of regulatory impediments to the introduction of both immediately available capacity of about 500 MW and the accelerated procurement, or introduction, of the generation capacity required to ease the now constant risk of load-shedding.

De Ruyter made this “call to arms” after the utility declared Stage 4 load-shedding at short notice on Tuesday morning and indicated that the rotational cuts would continue until 5:00 on Friday morning, owing to high levels of unplanned breakdowns of more than 15 600 MW.

“There are a number of steps that can be taken on an urgent basis by a number of parties [and] clearly Stage 4 load-shedding is a call to arms to address these issues,” he said during a briefing.

One of these actions included receiving authorisation for a so-called ‘standard offer’, through which Eskom would seek bids from small private generators to sell their surplus electricity into the grid under three-year contracts.

“The idea is for us to enter into these standard-offer agreements and fund these through the normal cost-recovery arrangements,” De Ruyter said, reporting that the Eskom board had approved the instrument in August.

For the standard offer to be activated, however, Eskom required a Section 34 determination under the Electricity Regulation Act to enable it to buy the electricity, as well as an exemption from some of the requirements of the Preferential Procurement Policy Framework Act.

In addition, the utility would require the concurrence of the National Energy Regulator of South Africa (Nersa), as well as the regulator’s assurance that it could recover the costs through the tariff.

“We are waiting for a variety of approvals from the National Treasury, Nersa, as well as from the Department of Mineral Resources and Energy (DMRE) to bring this online.

“This could yield about 500 MW to 600 MW – so not huge in the bigger scheme of things, but if you add up all of the other initiatives that we are proposing, we are looking at [reducing] one or two stages of load-shedding.”

The other initiatives referred to included making amendments, through the Independent Power Producer (IPP) Office, to the contracts in place with existing IPPs to unlock a further 200 MW that these generators are currently contractually disallowed from injecting into the grid.

In addition, there is potential, also through the IPP Office, to facilitate IPP plant improvements that could add a further 200 MW in the near term.

In parallel, Eskom was working to debottleneck the evacuation infrastructure servicing those IPPs to potentially unlock a further 200 MW to 300 MW.

Asked by Engineering News whether these proposals had been made formally to both the Department of Public Enterprises (DPE) and the DMRE, De Ruyter stressed that all its communications with government was being channeled through the DPE, including those that required action from either the National Treasury or the DMRE.

“So, I think that the steps that are required to resolve the crisis are known, they have been communicated and we have emphasised the need for urgency.”

In the longer-term, however, new generation capacity was required to close a prevailing supply gap of between 4 000 MW and 6 000 MW.

“We need more capacity to be added to the grid as soon as possible, and we should remove all roadblocks that stand in the way of adding that capacity as quickly as possible.”

In the process, South Africa could “pivot from our historical coal-fired base, which is not as reliable and as available as it should be, to low- and no-carbon forms of electricity generation”.

Such a transition, De Ruyter added, could be partly funded through concessional finance being made available in the wake of the COP26 climate talks in Glasgow, Scotland.

South Africa has received an $8.5-billion transition offer, which is currently the subject of government-to-government negotiations with the European Union, Germany, France, the UK, and the US.

A small proof-of-concept green hydrogen facility in Vredendal, in the Western Cape, has entered into production and its developers are now seeking to raise finance for a 5 MW commercial project, which they believe could be the precursor to a ‘hydrogen valley’ in the province.

The commercial plant would comprise a 10 MW solar photovoltaic facility and a 5 MW hydrogen plant and is expected to involve an investment of R460-million, depending on the cost of the electrolyser units.

Keren Energy MD George van Rensburg reported this week that the proof-of-concept facility, which has been developed together with Sakhumnotho Power, a subsidiary of Sakhumnotho Group Holdings, began producing green hydrogen on February 21.

To the best of Keren Energy’s knowledge, the plant is South Africa’s first producer of the carbon-free energy carrier.

The facility, which has produced three kilograms to date, uses electricity produced from a 100-kW solar photovoltaic generator to split water into hydrogen and oxygen using an electrolyser.

Speaking during a webinar hosted by the Saldanha Bay Innovation Campus, Van Rensburg reported that the plant had been developed under the aegis of government’s HySA research and development programme and also received support from the University of Cape Town, the University of the North West and the University of the Western Cape.

Hydrogen fuel-cell component manufacturer Cape Stack and Namaqua Engineering partnered with Keren on the plant’s design and construction.

Finance is now being sought for the commercial project, which will be located about 20 km from the proof-of-concept facility.

Keren Energy reports that all permits and environmental approvals are in place and that it is aiming to reach financial close before the end of June so that the plant is in a position to enter into production by March 2023.

“We have very good solar resources and an abundance of water in the area, which means that we will not need to invest in desalination,” Van Rensburg said.

The property has various boreholes, one of which already produces more than enough water to support the hydrogen production.

“At full production the water usage will be 11 200 litres per day and we envisage 300 working days, which equates to 3 360 000 litres per annum,” Keren Energy told Engineering News in response to questions.

Asked whether such a project could be justified given water scarcity in the region, the company said: “Yes, we will be using minimal water from an established borehole.”

Based on an 80/20 debt-to-equity finance split, Keren Energy is currently estimating a cost of production of about R70/kg hydrogen, which includes the sale of the oxygen that will be produced during the process.

It is also hoping to secure some grant finance for the project.

Land has also been secured near Saldanha Bay for a 400 MW green hydrogen project and Van Rensburg reports that about 70% of the necessary permits have already been secured. Again, there are water resources available in the area and desalination is, thus, not envisaged.

No capital estimates or timelines were provided for this far larger project, which Van Rensburg argued could be the “start of a hydrogen valley in the Western Cape”.

He said the decision to locate close to the deep-water harbour in Saldanha Bay formed a “crucial piece of the puzzle”, as the location provided both domestic offtake and export opportunities.

Council for Scientific and Industrial Research senior research engineer Thomas Roos said that Saldanha Bay had been identified along with Coega, in the Eastern Cape, and Boegoebaai, in the Northern Cape, as potential green hydrogen export hubs.

Roos said the ability to co-locate various hydrogen-consuming activities into a particular region opened up the prospect for a hydrogen valley in Saldanha Bay that could be similar in concept to the one being proposed from Anglo American Platinum’s Mogalakwena mine in Limpopo, through Pretoria and Johannesburg, down to Durban.

Besides th...

Toyota South Africa Motors (TSAM) says it has suffered “extensive damage” at its Prospecton assembly plant, in KwaZulu-Natal, owing to widespread flooding in the coastal province in the past week.

The local arm of the Japanese manufacturer adds, however, that the extent of the impact cannot yet be quantified.

“No injuries were reported on site.”

TSAM says the plant remains shuttered, but notes that mop-up operations have already started.

“TSAM is working to recoup the lost time, as well as to mitigate, as much as possible, the knock-on effect of delays arising from this unfortunate situation.”

TSAM produces the Corolla Cross, Fortuner, Hiace Ses’fikile minibus and Hilux bakkie for the local market, while some models are also exported. The Prospecton operation also hosts the Hino truck assembly plant.

Toyota is the sales leader in the local market, and the Hilux the country’s best-selling vehicle.

Eskom has indicated that there is a threat of a resumption of load-shedding after the Easter long weekend given its assessment that more than 9 700 MW of capacity is currently “at risk” of tripping in addition to that which is currently unavailable owing to planned or unplanned outages.

Generation executive Phillip Dukashe reported on Thursday that there was a plan to use the space created by the falloff in demand over the public holiday weekend to tackle those units that were currently showing signs of being under strain.

He said some of the work would require the units to be offline for between five and seven days.

“That is why we are worried about next week, particularly the start of next week,” Dukashe said during a briefing.

CEO Andre de Ruyter reported that Stage 2 load-shedding was still expected to be suspended at 5:00 on Friday April 15, but that load-shedding would continue on Thursday night, despite an expectation that peak demand would decline by about 2 000 MW to about 27 183 MW as the long weekend began.

He said efforts would be made over the weekend to replenish diesel reserves at Ankerlig and Gourikwa, in the Western Cape, as well as at its pumped storage plants.

De Ruyter admitted that the position at its pump-storage schemes was “not where we would like it to be”.

“Drakensberg has 77 hours left to pump to fully replenish the dam, which is more than we would have liked.”

The Ingula scheme, meanwhile, had been affected by the heavy rains over KwaZulu-Natal, leaving both the upper and lower dams full.

“Over the weekend, we will be releasing water, in a responsible manner, bearing in mind that the Ingula wetland area has been declared a Ramsar heritage site.

“So we're very aware of our environmental responsibility and we will do everything that we can to avoid damage.

“[But] we will slowly release water in order to create space in the lower dam for additional storage.”

Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about the launch by power utility Eskom of a bidding process for land in Mpumalanga, which can be leased by private generators to produce electricity; how much electricity this is likely to add to the South African system; and how this programme fits in with broader efforts to grow South Africa's electricity generation capacity.