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Mercedes-Benz South Africa (MBSA) will introduce five new battery electric vehicles (BEVs) from the global Mercedes-EQ range during 2022.

This will form part of a “clear strategic push to position the brand as a global and local leader in the electric vehicle (EV) market”.

The ‘EQ’ refers to “electric intelligence and sustainable modern luxury”, adds the local arm of the German premium brand.

The EQ range for 2022 includes the EQA sports-utility vehicle (SUV); the EQB family-sized SUV; the mid-sized EQC, based on the GLC platform; the EQE business sedan; and the EQS luxury sedan.

Newly appointed president of Mercedes-Benz Cars South Africa and co-CEO of MBSA Mark Raine acknowledges that EV sales are relatively small in South Africa, but notes that MBSA is following the global push towards zero-emission mobility.

“The chairman of the board of management of Daimler, Ola Kallenius, has already stated that, over the next 20 years, Mercedes-Benz Cars aims to have a carbon-neutral new-passenger car fleet, and it also aims for plug-in hybrids or all-electric vehicles to make up more than 50% of its car sales by 2030.

“South Africa is not without its challenges in terms of the EV landscape, however, with our customer-centric growth strategy curated towards the local market, a significant interest has already been shown by potential customers for our EQ range.”

Raine says this interest is aided by growth in the public charging grid, including national coverage on main routes, and the number of potential customers with existing renewable energy solutions at home or the office, or those considering adding such solutions in the near future.

“Based on these developments, we are confident that the cars we bring into the country will find many happy owners.”

Raine believes that South Africa will see “a strong uptake and growth” in the luxury EV market in the next 12 to 24 months.

As part of combatting the concerns of new EV customers, such as range anxiety and battery life, MBSA will offer an eight-year warranty on the battery, says Raine.

“And to further align our confidence in the product itself and its characteristics, all electric cars from Mercedes-Benz EQ will carry the same residual value as a car with an internal combustion engine.”

Raine adds that Mercedes-Benz Cars will collaborate with GridCars to further develop the country’s public charge network, noting that every EQ customer will receive a complimentary Mercedes-EQ wall charger installed at the location of their choice.

He also notes that 36 agent partners (formerly called dealerships) across South Africa have been appointed as retail and service partners for the Mercedes-EQ brand, while they will also add to the charging grid.

The Mercedes-EQ RangeThe EQA is a dynamic, all-electric SUV, says MBSA sales and marketing VP Selvin Govender.

A close relation of the GLA, the EQA 250 derivative should be available in South Africa as from the second quarter. It offers a power output of 140 kW, a range of up to 412 km and a combined electrical consumption of 17.7 kWh/100 km.

The EQB is set for introduction in the third quarter. The compact SUV will be available in the form of the EQB 350 4Matic derivative.

This all-wheel-drive model offers a power output of 215 kW, a range of up to 419 km and a combined electrical consumption of 17.4 kWh/100 km.

The EQC mid-sized SUV was the first car to be produced by Mercedes-Benz in the EQ family. Hence, it marked the start of Mercedes-Benz’s move towards future electric mobility.

The all-wheel-drive model offers a power output of 300 kW, a range of up to 437 km and a combined electrical consumption of 21.3 kWh/100 km.

The new EQE business sedan, possibly set for launch in the fourth quarter, offers all the essential functions of the range-topping EQS in a slightly more compact format.

The EQS premium sedan should be available from the third quarter. It offers a range of up to 780 km and an output of up to 385 kW.

The first models in the range to...

Creamer Media's Chanel de Bruyn speaks to Engineering News Editor Terence Creamer about the key themes that emerged during the public hearings, hosted by the National Energy Regulator of South Africa, into Eskom's latest revenue application, the way forward and what is needed for South Africa to move beyond an ongoing tussle over tariffs.

State-owned utility Eskom warns that an inflation-linked hike will force it to seek yet more support from the National Treasury, amid overwhelming calls for the energy regulator to reject its request for a 20.5% tariff hike from April 1 and to implement a single-digit increase instead.

Stakeholder warnings over the unaffordability of the proposed increase on business and households emerged as the core theme during week-long public hearings, which were hosted by the National Energy Regulator of South Africa (Nersa) from January 17 to 21, culminating in a hybrid event in Gauteng.

Eskom, which made major adjustments during the hearings to the assumptions underpinning its application, initially submitted in June last year, is seeking allowable revenue, including outstanding amounts already approved by the regulator, of R293.4-billion for 2022/23.

If approved, the standard wholesale tariff would rise from 133.64c/kWh to 161.04c/kWh, or by 20.5%.

The utility is forecasting sales of 193 579 GWh for the upcoming financial year, which it expects to supply from its own generators as well as through purchases of electricity from independent power producers (IPPs).

After a downward revision to the assumed energy availability factor from its underperforming coal fleet from 72% to 62%, the utility is requesting R86.5-billion to cover its primary energy costs.

Controversially, the figure includes R6.5-billion for the diesel-fuelled open-cycle gas turbines (OCGTs), which Eskom expects to operate at a load factor of 7%, rather than the 1% initially assumed.

There was much debate during the hearings about the prudency of allowing Eskom to use the OCGTs outside of their role as peaking plants. The utility defended the request on the basis that load-shedding carried a cost to the economy, which it estimated to be R9.53/kWh, that was three times that of producing OCGT electricity.

After a material decrease in assumed purchases of electricity from IPPs, from 36 448 GWh in the original application to 25 135 GWh, Eskom is requesting R52.7-billion to purchase electricity from IPPs, a R17.4-billion downward revision from the original application.

The balance of the application comprises R68.3-billion for depreciation, R66.7-billion for operating expenses, R5.7-billion for arrear debt, R4.6-billion for international purchases, R7-billion for the environmental levy, R2.7-billion for the carbon tax and R14.4-billion in previously approved regulatory clearing account-related revenue.

Eskom also adjusted its return-on-assets assumption from -1.99% to -1.2%, which is reflected in a reduced loss of R15-billion, rather than the R25-billion outlined originally.

The proposed hike has been rejected by business, civil society and local government, with the executive mayors of both Cape Town and Johannesburg, Geordin Hill-Lewis and Dr Mpho Phalatse respectively, making direct representations to Nersa during the hearings.

Phalatse argued in her presentation that an above-inflation hike would have a “devastating impact” on the citizens of Johannesburg, erode business confidence and disrupt the economic recovery.

Energy Intensive Users Group CEO Fanele Mondi said that while not all the revenue being requested was within Eskom’s control, including the IPP payments and the environmental levies and taxes, it nevertheless felt that the increase should be limited to a maximum of the consumer price index (CPI) plus 4%.

However, Mondi argued that it would be preferable to contemplate Eskom’s costs in isolation to any pass-through costs, with the producer price index (PPI) rate offering the main guideline for any internal cost increases.

Likewise, Minerals Council South Africa chief economist Henk Langenhoven suggested that increases should be aligned with PPI inflation, or alternatively be governed within a band similar to one deployed by the South African Reserve Bank to manage inflation.

Independent energy analyst Clyde Mallinson also argued that the 2022/23 hike should...

Telecommunications group Telkom has agreed to halt its application for an urgent interdict to prevent the Independent Communications Authority of South Africa (Icasa) from moving ahead with the spectrum auction in March.

The company said an agreement was reached with all the respondents on the need to expedite the hearing for Part B of Telkom’s two-part application.

Part A requests the court to urgently suspend the Invitations To Apply (ITAs) while the court deliberates on Part B of Telkom’s application which focuses on the merits of Telkom’s arguments against the ITA published on December 10, 2021.

“In line with the agreement between the parties, while we await the decision of the court on the proposed timelines for the hearing of the review, Telkom will be removing the hearing of Part A of its application from the urgent roll,” says Telkom regulatory and government relations group executive Dr Siyabonga Mahlangu.

Telkom reserves its rights to reinstate the matter on short notice should it become necessary.

Part A of Telkom’s two-part application was set to be heard on January 25.

Telkom has proposed that Part B of the application be heard on March 1 to 4 should the court be able to accommodate the request.

“Telkom is pleased with the cooperation it has received from the parties on this revised timeframe and expects the regulator to proceed mindful that the outcome of hearing of Part B of Telkom’s application will have material impact on the auction process,” Mahlangu concluded.

The World Bank announced on Friday morning that it had approved South Africa’s request for $750-million (about R11.4-billion) loan.

"This loan will support the government of South Africa’s efforts to accelerate its Covid-19 response aimed at protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and supporting a resilient and sustainable economic recovery," the World Bank and SA’s National Treasury said in a joint statement.

This completes the country's aim to secure R95-billion from multilateral institutions.

In July 2020 the International Monetary Fund granted SA a $4.3-billion (around R70-billion at the time) loan to support job creation and protection for businesses impacted by the Covid-19 pandemic. In April 2021, it was announced that SA would get a $1-billion (R14.5-billion at the time) loan from the New Development Bank (NDB). The NDB is a development finance institution established by Brazil, Russia, India, China and SA as part of the BRICS grouping.

The World Bank and Treasury said on Friday that the "low interest" $750-million development policy loan (DPL) is meant to support the country’s implementation of the country's Economic Reconstruction and Recovery Plan. According to the statement it will enhance financial sector stability - specifically the establishment of a deposit insurance scheme, and will support SA’s "commitment to climate change".

"The World Bank budget support is coming at a critical time for us and will contribute towards addressing the financing gap stemming from additional spending in response to the Covid-19 crisis," Treasury director general Dondo Mogajane said.

"It will assist in addressing the immediate challenge of financing critical health and social safety net programs whilst also continuing to develop our economic reform agenda to build back better."

Marie Françoise Marie-Nelly, the World Bank’s director for South Africa said the loan would provide relief "from the impacts of the most serious economic crisis South Africa has experienced in the past 90 years, while tackling long-standing challenges to growth and development."

"This support aims to put the country on a more resilient and inclusive growth path by leveraging South Africa’s strength to mitigate the effects of the Covid-19 crisis through their strong social safety net and by advancing critical economic reforms."

The transformation and decarbonisation of the South African energy system is gathering momentum; however, a regional plan is required for the coal mining region of Mpumalanga, to prevent considerable economic and socioeconomic losses and ensure a just transition, and a push for renewable energy in the province has the potential to achieve that transition.

This is according to the South Africa Benefits study report: 'From coal to renewables in Mpumalanga: Employment effects, opportunities for local value creation, skills requirements, and gender-inclusiveness', which was published on January 18.

The report analyses and quantifies the socioeconomic implications of re-purposing coal-fired power plants in Mpumalanga through the deployment of renewable energy.

The analysis emphasises opportunities related to job creation, necessary skills development with a focus on gender questions, and regional value creation and industrial opportunities in Mpumalanga.

The study also highlights important framework conditions necessary for fully harnessing these benefits.

The report is published by the Institute for Advanced Sustainability Studies Potsdam with the Institution of Engineering and Technology (IET)

IET and the Council for Scientific and Industrial Research (CSIR) build on a study prepared by a consortium including the CSIR, Enertrag, Prime Africa and Navitas Energy, with financial support from Germany’s International Climate Initiative (IKI).

Renewable energy has considerable job creation potential on a national level; however, only a small portion of these jobs are in Mpumalanga owing to the renewable energy resources advantage of other provinces.

The report says that, therefore, policy initiatives are required to incentivise renewable energy in Mpumalanga, along with the coordinated effort required for reskilling and transition arrangements.

Firstly, it posits that Mpumalanga can compensate a large share of jobs lost in the declining coal sector by incentivising investment in renewable energy in the province.

Secondly, it says that, by deploying renewable and clean energy technologies, Mpumalanga can lay the foundation for becoming the new clean energy hub of South Africa.

Lastly, it notes that the transition from fossil fuels to clean energy sources presents an opportunity to improve and enhance conditions for women working in the energy sector in Mpumalanga.

In terms of employment, some notable insights from the report include that at a national level, the job losses in the coal value chain by 2030 can be adequately replaced by renewable energy.

However, the decommissioning results in net job losses in Mpumalanga by 2030.

Therefore, during a webinar launching the report on January 20, speakers emphasised that it was critical that efforts to increase renewable energy in the province were progressed and incentivised.

In terms of employment, IET founder David Jacobs said there was potential for 25 000 direct, 26 000 indirect and 28 000 induced clean energy jobs to be created in the province by 2030.

These are contained primarily in construction, while operations and maintenance jobs account for 20%.

The highest number of jobs are expected to be created in the solar photovoltaic (PV) industry, with the wind industry not far behind.

The report emphasises that informal skills need to be recognised to facilitate a labour force realignment, while artisans, technicians and engineers can more easily transition.

Meanwhile, the study also highlights that there are a few similarities within the coal and clean technology value chains, such as in the extraction of raw materials, beneficiation of mining materials, transportation and electrical balance of plant, which can be leveraged upon.

The province does have a focus on greening the economy currently, as seen by the different projects and initiatives that are currently planned.

While investor interest is lacking at present, the national transmission infrastructure constraints may improve th...

Global foreign direct investment (FDI) flows showed a strong rebound in 2021 with growth of 77% to an estimated $1.65-trillion, compared with $929-billion in 2020, reports United Nations Conference on Trade and Development (Unctad).

Investment flows not only recovered but surpassed the pre-Covid-19 level.

Unctad secretary-general Rebeca Grynspan says recovery of investment flows to developing countries is encouraging, but stagnation of new investment in least developed countries (LDCs) is a major cause for concern.

She adds that these countries need investment into industries such as electricity, food and health for productive capabilities and also to reach the United Nations Sustainable Development Goals.

Unctad’s latest ‘Investment Trends Monitor’ report shows that developed economies saw the biggest rise by far, with FDI reaching an estimated $777-billion in 2021 – three times the exceptionally low level in 2020.

In Europe, more than 80% of the increase in flows was owing to large swings in conduit economies.

Inflows in the US more than doubled, with the increase entirely accounted for by a surge in cross-border mergers and acquisitions (M&As).

FDI flows in developing economies increased by 30% to nearly $870-billion, with a growth acceleration in East and South-East Asia of more than 20%, a recovery to near pre-pandemic levels in Latin America and the Caribbean and an uptick in West Asia.

Inflows in Africa also rose, with most recipients across the continent recording a moderate rise in FDI. The total for the region more than doubled, partly owing to a single intra-firm financial transaction in South Africa in the second half of the year.

Of the $718-billion increase in global FDI flows in 2021, more than $500-billion, or almost three-quarters, was recorded in developed economies. Developing economies, especially LDCs, saw more modest recovery growth.

Flows to South Africa jumped to $41-billion, from $3-billion in 2020, owing to a major share swap deal between JSE-listed Naspers and Dutch-listed Prosus.

INFRASTRUCTURE FOCUS

The report further finds that investor confidence is strong in infrastructure sectors, supported by favourable long-term financing conditions, recovery stimulus packages and overseas investment programmes.

International project finance deals were up 53% in volume and 91% in value, with sizeable increases in most high-income regions and in Asia and Latin America and the Caribbean.

In contrast, investor confidence in industry and global value chains remains weak. Greenfield investment project announcements were practically flat (-1% in number, +7% in value). The number of new projects in global value chains-intensive industries such as electronics fell further.

In other sectoral trends, greenfield investment activity remains 30% below pre-pandemic levels on average across industrial sectors. Only the information and communication sector has fully recovered.

Project finance in infrastructure now exceeds pre-pandemic levels across most sectors. Project numbers are up most in renewable energy and industrial real estate.

The boom in cross-border M&As is most pronounced in services. The number of deals in information and communication increased by more than 50% to a quarter of the total.

OUTLOOK

The outlook for global FDI in 2022 is positive, but the rebound growth rate in 2021 is unlikely to be repeated, says Unctad.

The underlying trend – net of conduit flows, one-off transactions and intra-firm financial flows – will remain relatively muted, as in 2021.

International project finance in infrastructure sectors will continue to provide growth momentum.

“New investment in manufacturing and global value chains remains at a low level, partly because the world has been in waves of the Covid-19 pandemic and owing to the escalation of geopolitical tensions,” explains Unctad investment and enterprise director James Zhan.

Besides, he adds, it takes time for new investment to take place. There is normally a time lag...

Audi South Africa (SA) is partnering with GridCars to install ultrafast electric vehicle (EV) charging stations across the country.

In doing this, the local arm of the German car maker says it will become the first EV brand to invest in this technology at publicly accessible sites.

The charge points will provide up to 150 kW of direct current (DC) charge to EVs, meaning that an Audi e-tron 55 (with a 95 kWh battery) will charge from 10% to 90% in about 30 minutes.

Audi says it will invest in setting up 70 new EV charge connectors at 33 sites in the country, in order to expand the existing public charging network in South Africa for all EV drivers.

This investment is over and above the charging stations installed at ten Audi e-tron dealerships, which will offer additional ten 50 kW to 75 kW DC chargers with 20 connectors.

“These publicly accessible charging stations will offer all EV consumers, regardless of vehicle ownership, the latest, state-of-the-art charging technology available in South Africa, and aims to assist consumers with the adoption of electric mobility,” says the premium brand.

In preparation for the arrival of Audi’s e-tron EV range in the first quarter of this year, Audi says it recognises the role that it can play to ensure a smoother path to EV adoption for South African consumers.

“Investing in the country’s charging infrastructure to support this shift to future mobility is critical. Audi is committed to playing an integral role in the transition to premium sustainable mobility.”

“The investment and partnership with GridCars demonstrates our brand philosophy that the future is an attitude,” notes Audi SA MD Sascha Sauer.

“As we prepare for the arrival of our e-tron range, we understand that there is more to be done as an automotive brand than simply providing the product. We also have to enable and partner with those who can empower the transition to an electric future with ease and understanding.”

Audi SA started with the installation of the chargers in December, and is continuing the project into this year.

The investment includes the following:

- Four 150 kW DC ultrafast charging stations, enabling roughly 340 km in 30 minutes. These are to be placed along major highways such as the N1, N2, N3 and N4.

- Five 80 kW DC fast-charging stations, enabling around 185 km in 30 minutes, also planned for location on major highways such as the N1, N2, N3 and N4. One of these chargers will close a long-standing gap at Richmond in the route between Johannesburg and Cape Town.

- Twenty-four 22 kW alternating current fast-charging stations, enabling about 100 km in one hour, at public lifestyle and recreational venues across the country as part of Audi’s destination charging strategy.

“GridCars, established in 2009, operates and manages the most extensive network of public charging stations across the country,” says GridCars MD Winstone Jordaan.

“Through this partnership with Audi SA, we are hoping to further progress the EV journey and tackle the challenges around charging, range and accessibility.”

Audi says a full e-tron model range will be available for sale in the next two months, through ten e-tron dealerships nationwide.

This includes the e-tron 55 sports-utility vehicle, e-tron 55 Sportback, e-tron S Sportback, and the pinnacle of the line-up, the e-tron GT and RS e-tron GT.

Eskom has acknowledged that urgent interventions are needed to assist certain large industrial customers, some of which are competing with international companies whose electricity is subsidised, to navigate the transition to cost-reflective electricity tariffs.

In a presentation on the third day of public hearings into the State-owned utility’s 2022/23 allowable revenue application, CFO Calib Cassim said that the country needed to assist industry to remain sustainable, as retaining such operations was critical from an economic perspective.

“Also, the loss of certain industrial customer sales and revenue results in additional upward price pressure on all customers than would otherwise be the case, placing further electricity sales at risk.”

However, he argued that targeted subsidies would cost less than subsidising the yearly shortfall between Eskom’s regulated revenue and its “prudent and efficient costs”.

“Internationally, utilities and governments are retaining large industrial customers through tax rebates, tariff discounts or similar financial mechanisms.

“Certain industrial customers in South Africa are competing internationally with these subsidised customers, so they need support to be competitive and sustainable,” Cassim said during virtual hearings hosted by the National Energy Regulator of South Africa (Nersa).

He suggested that long-term and short-term negotiated pricing agreement frameworks, which had been approved by Mineral Resources and Energy Minister Gwede Mantashe, could go a long way in supporting vulnerable industrial sectors.

However, additional measures for the support of vulnerable sectors should also be considered.

The utility has requested an increase to its allowable revenue that, together with already approved regulatory clearing account amounts, would translate to a 20.5% hike in the standard tariff from April 1.

If approved, the standard wholesale tariff would rise from 133.64c/kWh to 161.04c/kWh, an increase that stakeholders have described as unaffordable.

While all non-Eskom presenters have objected strongly to the increase, the focus during the first three days of hearings has been primarily on the plight of poor households rather than industrial customers.

The objections of larger consumers are likely to be heard mainly on the final day of the hearings, scheduled for Johannesburg on February 21, although Agri Western Cape has already appealed for a hike of no more than 7%.

In response to what could be done to protect poor households from the full impact of the requested hike, Cassim said some mechanisms were available, including free basic electricity of 50 kWh per household per month, a subsidised Eskom tariff on certain categories of consumers and the inclining block rate (IBT) implemented by Nersa to cushion low-income households that use very little electricity.

“The tariff has been successful in lowering the cost of electricity for the poor.

“However, Eskom believes that the IBT as it is currently structured does not sufficiently target low-income households and places an unsustainable subsidy responsibility on urban customers,” Cassim said.

Structural changes have been formally proposed but will not be implemented during the 2022/23 financial year.

While acknowledging the affordability concerns being raised, Cassim nevertheless urged Nersa to assess Eskom’s costs on their merits, before deciding on what regulatory levers or policy interventions could be used to offer support to consumers.

“We should not let affordability cloud the merits of Eskom’s application and the efficient costs should be allowed to be passed on.”

He also noted that most of the objections so far had been from municipal customers, which could reflect the gap between Eskom and municipal tariffs; an issue that he said should also be dealt with separately.

The NantSA vaccine manufacturing campus at Brackengate, in Cape Town, could soon produce its first Covid-19 vaccine, says NantWorks founder and CEO Dr Patrick Soon-Shiong.

President Cyril Ramaphosa and Soon-Shiong on Wednesday officially opened the NantSA facility.

Billionaire Soon-Shiong was born in South Africa to Chinese immigrant parents. He qualified as a doctor at the University of the Witwatersrand and then moved during the Apartheid-era to the US where he subsequently built a medical and business empire.

NantWorks is a network of healthcare, biotech and artificial intelligence startups.

“We are moving at lighting speed. We hope that within the year, quite literally within the year, the first drug substance [active ingredient] will be produced in this facility,” said Soon-Shiong at the ribbon-cutting ceremony.

President Ramaphosa noted this was the first vaccine facility in Africa that would produce drug substances, as the other facilities in the country used imported drug substances, and then acted as fill-and-finish facilities.

“The demand we have been making with the World Trade Organisation is that we want those countries that have the capacity to manufacture the drug substance to transfer their technology so that we are able to manufacture the drug substance ourselves,” he noted.

“This is where the real challenge is: We want to migrate from just fill-and-finish to manufacturing the drug substance ourselves.”

“This state-of-the-art vaccine manufacturing campus officially launching today is part of a broader initiative to propel Africa into the new era of health science,” added Ramaphosa.

“South Africa supports vaccine manufacturing to ensure we become self-sufficient as a continent; that we shed those colonial chains that have always bound us.

“Africa should not be last in line to receive vaccines against pandemics. Africa should no longer go cap in hand to the western world begging and begging for vaccines that they just want to drip off their tables,” he said.

The NantSA facility is part of a R4-billion-plus investment by Soon-Shiong and his family in South Africa, both on a business and philanthropic level.

The facility, set to employ between 400 and 600 people, would focus on a new generation of vaccines, explained Soon-Shiong. It was not an antibody-based vaccine, but a combination of an antibody and T-cell-based vaccine.

The ambition is to “kill the factory”, he noted.

Soon-Shiong said it was too early to become complacent about Covid-19, as concerns lingered around the virus, such as a scenario where the Omicron variant, which is 75% more infectious than the more deadly Delta variant, might combine with the Delta variant.

Trials for Soon-Shiong's new vaccine were being conducted worldwide, including Australia and the US.

Other vaccines to be developed at the Cape Town facility might include ones against HIV, tuberculosis and various forms of cancer.

Other regions in Africa to which Soon-Shiong wanted to expand vaccine production included Ghana, Uganda and Botswana.