Sasol CEO Simon Baloyi has confirmed that the JSE-listed group has applied to the National Energy Regulator of South Africa (Nersa) for an electricity trading licence, and is also planning to take equity positions in renewable-energy projects in future.

In an interview with Engineering News, which came as Nersa moved to finalise trading rules and Eskom mounted a legal challenge against the regulator's decision to license five domestic traders in 2024, Baloyi said a trading licence would offer it flexibility as a large procurer and potential direct investor in renewables.

"For small and medium enterprises, we already have a JV with Discovery called Ampli Energy.

"Sasol is applying for a licence to sell to big corporates, which Ampli Energy doesn't deal with," Baloyi explained, adding that it already supplies other utilities, such as steam and water, to companies that operate on its sites.

He argued that a trading licence would provide Sasol with greater agility as prices fluctuated in a future competitive market, and as it considered large electricity-intensive investments (such as electrolysers to produce hydrogen) that would seek to take advantage of periods when prices could turn negative.

For the immediate future, however, the group would seek to increase the supply of renewable electricity to its own fuels and chemicals operations, both to decrease its carbon emissions as well as to lower the cost of supply.

While it is persisting with its carbon-intensive process of producing gas from coal, which it then uses to produce fuels and chemicals, Sasol has announced plans to "turn down" coal-fired electricity plants to support its decarbonisation and replace these with renewable electricity.

Speaking during an earlier results presentation, CFO Walt Bruns reported that much pressure was being placed on the team responsible for introducing renewable electricity to meet the emission reduction roadmap, but also because "those electrons are value accretive versus the Eskom alternative".

Sasol had concluded power purchase agreements with independent power producers (IPPs) for 920 MW of wind and solar PV electricity and had set a goal of securing 2 000 MW by 2030.

Baloyi told Engineering News that it would not seek controlling equity but that it would take up positions in IPP projects in future, noting that Sasol "will always have a home for electrons".

He also announced to stakeholders that progress was being made with government on the prospect of "recycling" carbon tax revenues towards energy-transition projects and that the policymaker had been receptive to its ideas.

"There's a stronger collaboration between government and businesses that is enabling an open and solution-focused dialogue that will unlock the energy transition in South Africa.

"We are also seeing positive momentum in the policy and regulatory space.

"This includes constructive engagement on the carbon tax framework and a positive policy signal for carbon tax recycling," Baloyi said during the presentation.

Energy and chemicals group Sasol reports that construction of its coal destoning plant has been completed and that the facility, which should be ramped up to full production by December, is producing coal with a 'sinks' content (rock fragments or other impurities) of between 0% and 1.5%.

The brownfield project has involved a repurposing of the Twistdraai export coal plant and an investment of less than R1-billion.

It is part of the JSE-listed group's strategy to address persistent coal quality problems that have negatively affected gasifier yields and caused mechanical damage.

Output at Sasol's Secunda Operations, in Mpumalanga, has in turn been negatively affected, with the facility having produced 6.7-million tons in the year to June 30, 2025 - an outcome that was below targeted volumes of between 6.8-million and 7-million tons.

CEO Simon Baloyi told Engineering News in an interview that the 10-million-ton-a-year destoning plant would reduce the average sinks content of coal being used by the gasifiers to between 12% and 14% once material from the plant was blended with coal from Sasol's own mines and that which it bought in from other miners.

It will also enable Sasol to reopen sections at certain mines that were closed owing to poor quality, and enable it to progressively decrease its purchases of third-party coal.

However, he said the group would continue to buy coal for quality, quantity and cost reasons and would be looking to replace volumes currently being purchased under a contract with Thungela Resources' Isibonelo colliery with a similar long-term contract.

During its 2025 financial year, Sasol produced 28.2-million tons of coal, down from 30.2-million in the prior year, and made external purchases of 10-million tons (9.2-million tons).

The destoning plant would treat coal from Sasol's Bosjesspruit and Thubelisha, where the sinks content was sometimes as high as 20%, before being blended to ensure that the average sinks content did not exceed the stated range.

The expectation is that the yields from the 74 gasifiers that Sasol typically operates at any one time will rise, while also improving the overall mechanical integrity of the gasifiers.

"In other words, the amount of gas that comes out of a gasifier will go up and we also expect an availability benefit, which you should see in the Secunda volumes, which is the true test for us," Baloyi said.

Sasol is aiming to produce between 7-million and 7.2-million tons at Secunda in its 2026 financial year and is targeting to sustain output of about 7-million tons by 2030.

However, it has indicated that yearly volumes from its Secunda liquid fuels refinery, which has been fully impaired, will fall to 6.4-million tons from 2034 as natural gas from Mozambique is depleted.

GAS CLIFF?

The tapering of gas volumes from Mozambique will be felt far earlier by domestic gas customers, with Sasol having announced that supply will be halted in 2028; a stoppage that has come to be known as the 'gas cliff'.

The 60 PJ of gas consumed domestically would represent between 10% and 15% of the yearly output from the gasifiers, Baloyi indicated.

He confirmed with Engineering News that Sasol remained committed to supplying domestic customers to 2030, but with methane-rich gas (MRG) produced by the Secunda gasifiers.

The price of MRG would be higher, however, and Sasol would seek to justify these prices in a future application to the National Energy Regulator of South Africa (Nersa).

Its submission to Nersa for the 2027 financial year would include MRG and the regulator would need to make a pricing determination.

He also insisted that MRG, which was being diverted from being used by Sasol internally to produce fuels and chemicals, had to be viewed as a bridging solution ahead of the importation of liquefied natural gas (LNG).

Sasol had already determined that it would be uneconomic to use LNG in its own production processes, but was a strong advocate of supplementing existing domestic demand...

Transport Minister Barbara Creecy has announced that 11 of the 25 private train operating companies (TOCs) that applied to operate routes on Transnet's rail network have met the requirements to do so and will now enter into contract negotiations to enable them to gain access to the network and begin operating the routes.

The announcement represents a significant step in opening South Africa's freight rail network, which has hitherto been monopolised by State-owned Transnet, to third-party operators.

This change is catered for in the country's rail policy and has been facilitated by the recent vertical separation of Transnet's rail business into the Transnet Freight Rail Operating Company and the Transnet Rail Infrastructure Manager (TRIM), which published the Network Statement that created the operating and tariff framework for the entry of private TOCs.

The inaugural application process for slots opened in December following the publication of the Network Statement and closed in February. It was followed by an evaluation process that culminated in the Minister's August 22 confirmation of the first 11 successful TOC applicants.

Creecy confirmed during the briefing that these applicants had applied for a total of 41 routes across six corridors, including:

The North Corridor, where six new entrants applied for 15 routes for the transportation of coal and chrome;The Iron Ore Corridor, where one new entrant had applied for one route for transportation of iron-ore;The Cape Corridor, where two new entrants applied for two routes for the transportation of manganese;The Northeast Corridor, where six of the TOC applicants had applied for 16 routes for the transportation of coal, chrome, magnetite, fuel, and containers;The Central Corridor, where one new entrant applied for two routes for the transportation of coal, containers (manganese); andThe Container Corridor, where four new entrants applied for five routes for the transportation of containers, coal, and sugar.

The identities of the successful TOC applicants, their shareholders and the routes for which they had applied were not immediately disclosed.

However, Transnet CEO Michelle Phillips confirmed that letters had been sent to these TOCs indicating that they could now enter into a commercial process with Transnet to finalise an access agreement.

Once these negotiations were finalised the names of the TOCs would be released, alongside details of their routes and the commodities that would be transported.

Durations of the allocations range from one to 10 years, and operating companies can commence with operations once the contract conditions have been addressed.

Phillips revealed that one of the TOCs had indicated that it should be in a position to begin operating in the second half of 2026, while others had stated that they were likely to begin operating only in 2027 or 2028.

Letters had also been sent to the unsuccessful applicants explaining reasons for the decision, and to indicate that TRIM would be running an ad hoc process under the same Network Statement, or version three, and that they would be entitled to submit revised applications, alongside new applications, during the 2025/26 timetable.

A date of publication of Volume 4 of the Network Statement would be announced by the Department of Transport, together with a timeline for the opening of applications for available slots for the 2026/27 timetable.

Phillips confirmed that some of the TOCs had applied to lease surplus rolling stock from Transnet, which was also in the process of setting up a new partnership for a leasing company, dubbed LeaseCo. However, it was also possible that the TOCs would source rolling stock elsewhere.

She also stressed that the TOCs were aware of the poor state of parts of the network on which they had applied to operate, and that they would, thus, be accessing the network at their own risk.

That said, Transnet had existing plans and capital budgets for upgrading and maintaining the network, ...

Engineering News editor Terence Creamer discusses Eskom's invitation to large electricity users to bid for 291 MW of solar electricity that it is preparing to build and trade and the questions this raises about fair competition given Eskom's objections to traders.

JSE-listed real estate investment trust (Reit) Growthpoint Properties said it is giving a massive boost to Africa's first open blockchain-enabled REC exchange, Fuel Switch, while unlocking certified clean energy trading for tenants when its e-co2 green energy initiative, goes live in October.

The Reit pointed out that wheeled green energy would be made available for daily business in South Africa from October.

"What we have seen in the industry currently is that sustainability reporting is becoming a very onerous task, [especially on the] listed companies . . . almost to the extent that it is becoming equal to financial reporting," said Growthpoint corporate advisory head Werner van Antwerpen during a media presentation.

"That's why we actually developed this e-co2 initiative . . . to, first of all, . . . wheel green power to those tenants, but also then to certify those . . . so that they can use that to reduce their emissions in their reporting structures," he explained.

Growthpoint's e-co2 will deliver its first green electrons to ten Sandton office buildings in October, with hydropower wheeled over the national grid from the Boston hydroelectric plant, newly developed as part of the Lesotho Highlands Water Scheme in partnership with Serengeti Energy.

The company said in a media release that the e-co2 roll-out puts Growthpoint well ahead in bringing certified renewable energy into daily business.

The company explained that the use of e-co2 wheeled green electricity is cost competitive for Growthpoint tenants and has a zero-carbon footprint, allowing them to save money and advance their sustainability goals.

For e-co2, the company signed a 195 GWh power purchase agreement with Etana Energy in 2023, securing a mix of hydro, wind and solar power.

The company said this energy underpins its pioneering e-co2 solution, which delivers wheeled renewable electricity directly to commercial buildings and their tenants.

"But the real breakthrough lies in how this energy is certified, tracked and monetised for Growthpoint's tenants," the company said in the release.

To deliver this capability as part of a growing suite of high-impact business-enabling tenant benefits, Growthpoint partnered with Fuel Switch.

During the presentation, Fuel Switch CEO Jan-Paul Spangenberg explained that tenants can face issues such as having limited choice regarding electricity, as well as tedious onboarding processes and high fees.

"It's really a difficult market to navigate and know where to go, so we plan to solve that. We are busy solving that," he said.

GREEN ENERGY CERTIFICATION

Fuel Switch's platform certifies the electricity as green using Internet of Things (IoT), blockchain and AI, providing independent third-party verification in an innovative manner.

Once certified, the green energy benefit is recorded on a digital certificate.

Each REC confirms that 1 MWh of renewable energy has been generated and supplied to the national grid.

The RECs are stored on the blockchain as a digital asset. Each is time-stamped and linked to a renewable-energy source.

"Think of it like this: when a solar panel generates electricity, it creates two things - actual power, and a certificate that says, 'this power came from a clean, renewable source'," Growthpoint explained.

The Reit noted that corporates had come under increasing pressure to meet net-zero and environmental, social and governance (ESG) commitments, adding that sustainability reporting is increasingly carrying the same weight and scrutiny as financial reporting.

RECs can be redeemed for certified reduction of Scope 2 carbon emissions. Fuel Switch integrates directly with South Africa's national REC registry, zaRECs, as well as the global I-REC standard governed by the I-TRACK Foundation.

Growthpoint expressed that its blockchain platform provided an "immutable record" for each REC from issuance to retirement, which ensured auditability aligned with global ESG standards.

"What's more, with South Africa's...

Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO-designate Tafadzwa Chibanguza says the prevailing uncertainty surrounding South Africa's public procurement rules in relation to local content has emerged as a major obstacle to reigniting industrialisation on the back of the country's large grid roll-out.

In addition, he argues that the recently released request for proposals (RFP) for South Africa's inaugural procurement of independent transmission projects (ITPs) is so heavily geared towards foreign investors that it could leave domestic capacity stranded.

Speaking at a National Business Initiative dialogue on the economic and industrial potential of the Transmission Development Plan (TDP), Chibanguza underlined the potential of the grid roll-out to revitalise manufacturing, especially in the metals and engineering subsector.

"Beyond the immediate benefits of energy sovereignty and cleaner energy supply, the TDP stands as the largest build programme South Africa will undertake in the next decade, creating an unparalleled opportunity to anchor a bold industrialisation agenda."

It could prove especially important for the metals and engineering value chain, owing to the metals-intensity of the suite of products required, which ranged from fabricated steel structures, to cables, transformers and circuit breakers.

It is estimated that the National Transmission Company South Africa (NTCSA), which is the custodian of the TDP, together with private ITP investors, will need to spend some R400-billion to build 14 500 km of new powerlines and add 133 000 MVA of additional transformers to the grid by 2034.

Significant attention is, thus, being given to whether the roll-out could be leveraged to help revive South Africa's ailing manufacturing sector, as well as to rebuild capacity lost as a result of an extended period during which investment in the transmission system was suboptimal, and stop/start in nature.

However, Chibanguza warned that delays to the finalisation of the country's new public procurement framework had made previous local-content designations unenforceable and had created an "untenable situation" whereby State organs had become some of the country's largest importers of goods.

"The revised Public Procurement Bill provides a potential baseline for advancing an industrialisation agenda. However, the delays in developing supporting regulations - particularly around designation, localisation, and preferential procurement - pose a real risk," he warned.

Describing it as the "elephant in the room", he bemoaned the fact that long-term planning was currently proceeding on the basis of interim regulations that excluded local preferences in the form of designations.

"Those interim regulations have effectively nullified all historic preferences that were included in the Public Finance Management Act around localisation.

"You had power transformers designated for local procurement, you had steel products designated, and electrical cables but those designations no longer apply," Chibanguza explained.

Seifsa was, thus, appealing for a restatement by the National Treasury of clear localisation requirements for the TDP and an enforcement of those requirements.

In addition, it was preparing to make a formal submission to government in relation to the way the RFP issued for the inaugural ITP procurement programme had been drafted.

While stressing Seifsa's support for the ITP programme, which he believed would support an acceleration of grid projects, Chibanguza reported that many industry participants had expressed unhappiness with the contents of the RFP.

"The feeling is that the current RFP and the way it has been put together is structured for foreign companies," he explained, indicating that it would elaborate on these concerns in its formal submission to government and the NTCSA.

Eskom says its recently published request for proposals (RFP) inviting large power users to bid for 291 MW of solar PV capacity that the State-owned entity is aiming to introduce in phases from the end of 2027 has been tailored to meet the growing demand of such customers for solutions that reduce their indirect carbon emissions.

Successful bidders for what Eskom is calling its 'Renewable Energy Offtake Programme' will enter power purchase agreements (PPAs) of between five and 25 years, with the renewable electricity delivered in phases from multiple Eskom projects.

The earliest project is expected to reach commercial operation by December 2027.

No tariff range has been provided, with Eskom indicating in the RFP that the price bid by prospective offtakers will carry the heist weighting of 48% in its evaluation, followed by the length of the PPA term (32%) and the size of the offtake (20%).

Eskom has set a minimum offtake size of 10 MW, with the maximum offtake volume aligned to the 291 MW capacity envelope.

The solar PV projects themselves were not identified but Eskom said in a statement that it was targeting 2 GW of construction-ready projects by 2026.

In a recent interview with Engineering News, Eskom group executive for renewables Rivoningo Mnisi confirmed that work was under way on a 5 GW 'repowering' project pipeline at Komati, Hendrina, Grootvlei, Arnot, Camden and Kriel. This, alongside efforts to develop a standalone Eskom Green business that would partner with independent power producers to finance and build the renewables plants.

Mnisi also reaffirmed that Eskom has ambitions to develop a 32 GW renewables portfolio by 2040, which has raised questions about how Eskom will secure the finances and whether there will be fair competition for scare grid-connection access.

Mnisi reported that work was under way on a public-private partnership framework, with Eskom having the initial financial capacity to carry the costs of advancing the projects to bankability only, and not for construction. In addition, some of the development finance that could be made available for repowering under the Just Energy Transition Partnership was contingent on there being private participation.

In a statement CEO Dan Marokane described the offtake programme as the "next step in the focused execution of our strategy to integrate additional renewable energy into the grid".

He reported strong interest in Eskom supplying green energy, noting that the programme followed an expression of interest process and engagements with commercial and industrial customers.

Eskom Distribution acting group executive Agnes Mlambo added that the renewable energy offtake solution would enable customers to transition to low-carbon operations while ensuring a secure and competitive supply.

Large South Africa exporters are pursuing ways to decarbonise their electricity supply in light of the threat coal-fired electricity poses to their future competitiveness. This, as carbon border adjustment mechanisms are introduced, initially in Europe but with indications that similar schemes will be rolled out elsewhere.

The bid submission deadline for the RFP is September 19, 2025.

Licensed electricity trader Energy Exchange of Southern Africa (EXSA) describes its recently concluded 15-year power purchase agreement (PPA) with Seriti Green as a major milestone in positioning the company as a sizeable "pure-play" trader ahead of South Africa's transition towards a more competitive market.

The R5-billion Mpumalanga project reached financial close in August on the back of the PPA, through which EXSA will buy all of the 525 GWh of electricity that the wind farm is expected to produce yearly once in full production. The 155 MW project, which will incorporate 25 wind turbines, is expected to begin generating electricity in October 2027.

The PPA is underpinned by the conclusion of firm offtake agreements between EXSA and several large corporate and industrial customers, whose signatures have been crucial for advancing the project to "bankability".

The local funders of the project received further comfort from the fact that the project is a second phase of the first wind farm developed by Seriti Green in Mpumalanga. Both projects form part of the larger 900 MW Ummbila Emoyeni complex, which will be built in phases and will also include solar PV and battery storage components.

EXSA CEO Wayne Cowie confirms with Engineering News that some of the initial offtakers are blue-chip entities owned by Remgro. Remgro holds 75% of EXSA, which was founded in 2017 and licensed by the National Energy Regulator of South Africa (Nersa) in 2022, while RMB owns the 25% balance.

Cowie says that, while a critical mass of offtakers have been secured for bankability, EXSA is now pursuing additional customers to ensure that the electricity is fully subscribed by the time the wind project enters into commercial operation.

"Reaching financial close on this project is a big step in our scaling up of EXSA," Cowie says, indicating that it has raised from 39 MW to 194 MW the capacity of renewable generation it has contracted to buy to date.

The initial projects include various solar PV projects in the Western Cape, as well as 4 MW of generation capacity from bagasse, a form of renewable energy produced as a sugarcane byproduct. Prior to the Seriti Green contract EXSA had offtake contracts with Woolworths, Wispeco, Siqalo Foods, Delaire Graaf, and Old Mutual amongst others and Cowie says the business has gained vital experience while trading at a relatively small scale.

"We will now take a little pause to digest this large Seriti Green project and focus on customers before returning to our pipeline of solar PV and wind opportunities," he reports, adding that it intends employing additional people in the coming months to ensure that the business' human resources are aligned to its expanded size. EXSA currently has eight employees but expects to expand the team significantly in the coming year.

As a pure-play trader, EXSA does not invest directly in the projects, which Cowie argues offers it the flexibility to partner with multiple generators while focusing on its core trading function. It also allows it to target partnerships with both wind and solar PV generators, which have complementary supply profiles in the South African context.

Chief technology officer Shailin Moodley says EXSA's trading focus also means that it can dedicate time and resources to understanding how the market is likely to change once the South African Wholesale Electricity Market, or SAWEM, is launched next year.

EXSA has participated in consultations on the Market Code and has also sent staff members to the pilot SAWEM School run by the National Transmission Company South Africa and has employees registered for the upcoming three-day school to be hosted at the University of Cape Town.

Moodley believes there will be an important role for traders, especially those with operational experience, once the SAWEM platform is launched and as the South African electricity market becomes increasingly competitive.

EXSA is monitoring developments around the SAWEM closely includin...

Engineering News editor Terence Creamer discusses the background to South Africa's economic reforms; the focus on electricity sector reforms, in particular; and a new initiative to provide an independent view of reforms progress or otherwise.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa on August 14 visited Seriti Green's flagship Ummbila Emoyeni renewable-energy project in Mpumalanga, highlighting it as an exemplar for the country's just energy transition (JET).

The project was "major", as it was located in the coal heartlands, where the majority of the country's energy came from, and also represented the coexistence of renewable-energy technology with coal, the Minister told media on the sidelines of the visit.

"What's more significant is that Seriti Green has been able to invest in the people, and ensure the coexistence of primary agriculture and the interventions that they are making. The Seriti Green project is a perfect illustration of what can be achieved - a genuine, JET," he acclaimed.

He also welcomed the investment from Chinese-company Goldwind, which was supplying the wind turbines to Seriti Green, as it represented foreign direct investment into the country.

Seriti Green project manager Rudolph Botha pointed out that an associated benefit of the project was the company's R50-million co-investment with Goldwind in upgrading the facilities at the Port of Richards Bay, where the turbines for the project were being delivered.

Ramokgopa emphasised that energy development was a lynchpin for economic development in the country.

"Energy leads and the rest follows. It must be affordable and the mix must be right. Ummbila Emoyeni is a perfect illustration of the best of the renewable-energy sector and it is significant that it is happening in Mpumalanga." (Also see attached video for more of the Minister's thoughts on the positive impact of the project.)

Seriti Green, a wholly South African and majority black-owned independent power producer, is pursuing the advancement of the country's JET, through the Ummbila Emoyeni project, as well as the adjacently-located Phefumula Emoyeni wind farm project.

The company is a subsidiary of Seriti Resources, which has a 54.18% stake, while other shareholders include VennEnergy with a 15% stake, Rand Merchant Bank with a 15.41% stake and Standard Bank with a 15.41% stake.

Seriti Resources CEO Mike Teke explained that coal still had a role to play in the country's energy mix as part of the JET, noting that the group was cognisant of this, with no plans to sell any of its coal mine assets, and continuing to develop these.

The project is a manifestation of Seriti Resources' hybrid strategy of having both coal and renewable-energy assets in its portfolio.

"What has been unfortunate in the country is what I call the binarization of the conversation - it's coal or renewables - and I'm saying it's all of the above, but also accepting that there's going to be an exponential increase of the share of renewables in the mix, and then reduce the emissions of the coal power stations that continue to run," Ramokgopa commented.

However, Teke did draw attention to an issue being faced as that of the onerous red tape companies contend with, with long lead times and challenges in the approvals process.

Seriti Green CEO Peter Venn reiterated this point, noting that it took several years to secure the paperwork to build the project, incongruously longer that the time it takes to actually build it.

Ramokgopa acknowledged that private investment in renewable energy was necessary to meet the country's goals of an additional 15 GW of energy by 2030, and that this would not be realised without resolving regulatory challenges.

"What we want to do is to make sure that we ease the regulatory requirements, the time it takes for the approvals to happen, in particular, the zoning, the environmental-impact assessments (EIAs), the water-use licences and the grid access - you need to truncate all of that," he told Engineering News and Mining Weekly.

He added that issues being faced in the space were gleaned from discussions with Seriti on the day, underscoring the importance of learning from live projects.

Ramokgopa mentioned that it was signifi...