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  • Immediate introduction of new tariff methodology ‘not feasible’
    State-owned electricity utility Eskom says it is “not feasible” for the National Energy Regulator of South Africa (Nersa) to make a revenue determination, for implementation on April 1 2022, on the basis of a new methodology that has yet to be consulted or finalised.
    On September 24, Nersa published a consultation paper on a possible new price determination methodology in which it states that the “current revenue-based methodology has fallen short in providing stable prices”.
    The paper highlights the fact that electricity tariffs have surged by 175% over the past decade, in a context where consumer inflation had remained within a 3% to 7% band.
    It suggests a shift to a “cost-to-serve approach”, based on the principles of activity-based costing, type-of-service costing, and marginal pricing to set tariffs.
    Nersa has set October 22 as the closing date for written submissions and intends to conduct virtual public hearings, as well as one physical hearing in Gauteng, from October 25 to 29.
    It is understood that Nersa’s Electricity Subcommittee, which has overseen the drafting of the consultation paper, could propose that the Energy Regulator reject a revenue application submitted by Eskom in June in favour of a determination based on the new methodology, or an interim one-year determination while the methodology is finalised.
    Eskom submitted its fifth multiyear price determination (MYPD5) application, covering the three-year period from April 1, 2022, to March 31, 2024, on June 2 and it was anticipated that Nersa would formally begin the process of adjudication soon thereafter so that a determination could be made by year-end.
    The revised tariffs in accordance with the determination must be submitted to Parliament by March 15 2022 to allow Eskom to implement these revised tariffs on municipal customers.
    The Energy Regulator, which comprises both fulltime and part-time regulators, is scheduled to meet on September 30, where it is expected to decide how to process the MYPD5 application.
    Eskom tells Engineering News & Mining Weekly that, having submitted the application, Nersa is required to process the application, starting with confirmation that the submission is in compliance.
    “Our understanding is that this was done, since Nersa has requested areas of confidentiality before it publishes and this can only happen with a compliant application,” Eskom said in response to emailed questions.
    However, Nersa has not yet published the MYPD5 revenue application on its website and has also not outlined a timeframe for adjudication, including a schedule of public hearings.
    Eskom tells Engineering News & Mining Weekly that the timing does not allow for a new submission under a new methodology.
    “That it is not feasible,” the utility states, explaining that it would typically need between nine and 12 months to finalise an application and complete the various legislated consultation processes required ahead of submission.
    In addition, Nersa has indicated that it requires at least six months from submission to decision.
    “It should also be noted that the consultation paper is not a consultation on a methodology – it is a consultation on what a methodology should entail.
    “Thus, it could be inferred that Nersa still has to develop a methodology, once feedback has been received from stakeholders and that the actual methodology development, consultation and approval process will take much longer.”
    Eskom refused to be drawn on whether it would take legal action against Nersa should the Energy Regulator reject its MYPD5 application saying only: “Eskom is committed to ensuring that legal processes are followed . . . [and] has a fiduciary responsibility to ensure that timeous and legal applications are made to continue the migration towards a sustainable business.”
    Eskom says it will participate in the consultation initiated by Nersa on the new price determination methodology, but says it is not in a position to comment on the contents of the paper.
    Ho...
    5 min
  • Risks linked to South Africa’s more ambitious decarbonisation pledge not yet ‘adequately addressed’
    Minerals Council South Africa has signalled its support for South Africa’s transition to a low-carbon economy, but is concerned that the immediate risks associated with the country’s more ambitious decarbonisation targets are not being adequately addressed.
    CEO Roger Baxter told participants to a virtual Presidential Climate Commission dialogue on the just transition on Thursday that systemic policy interventions, and other support, were required to drive a “risk-managed decarbonisation journey for South Africa”.
    He stressed that the domestic mining industry was supportive of implementing measures to transition to a low-carbon economy and was also convinced that green energy could create significant new opportunities, particularly in the area of green hydrogen.
    However, the transition had to be grounded in a systemic analysis of the risks and “pragmatism must prevail” so as to minimise disruptions to reliable electricity supply.
    “The recently Cabinet approved Nationally Determined Contribution (NDC) provides for a more ambitious target for greenhouse gas (GHG) emission reductions.
    “However, the Minerals Council does not see that the increased immediate-term risks related to this ambitious target are being adequately addressed, especially risks to electricity supply,” Baxter said.
    Technical, financial and capacity building, together with enabling policy framework, would be required to meet the NDC obligations, he added.
    The revised NDC was approved by Cabinet in mid-September and will be deposited with the United Nations Framework Convention on Climate Change ahead of the upcoming COP26 climate talks in Glasgow, Scotland.
    South Africa’s 2030 mitigation target range has been updated from the 398 – 614 metric tons of carbon dioxide equivalent (Mt CO2-eq) range pledged in 2015 to a range of 350 – 420 Mt CO2-eq.
    The higher figure is said to be in line with the Paris Agreement's commitment to limit the rise in the average global temperature to below 2 °C above pre-industrial levels, while the lower figure is consistent with increasingly assertive moves to cap the rise at below 1.5 °C.
    The most recent Intergovernmental Panel on Climate Change report warns that the 1.2 °C threshold has already been breached and that accelerated mitigation action is required this decade for the 1.5 °C target to remain within reach.
    “We support the transition to a low-carbon economy and society – contingent on doing it judiciously and systemically,” Baxter said, adding that ensuring that the transition was just for coal workers and communities was dependent on “a compelling plan that understands the socioeconomic implications of the transition”.
    There was also a need to acknowledge, he argued, that coal remained a critical component of energy provision and economic development, contributing R80-billion to gross domestic product (GDP) yearly, while sustaining 120 000 jobs and supporting the livelihoods of some 500 000 households.
    “Coal-related energy accounts for 45% of employment, 60% of GDP and 70% of export earnings and is hugely important to specific communities, particularly in Mpumalanga,” Baxter said, indicating that this contribution would taper over time.
    Speaking on the same platform, Trade & Industrial Policy Strategies senior economist Neva Makgetla said that the shift to new energy sources was inevitable, largely because coal-based electricity technologies were no longer competitive with renewables and because South Africa’s unusually high coal-linked emissions posed real trade and investment risks.
    While the transition offered significant new economic opportunities for South Africa, Makgetla said stakeholders in the coal value chain faced substantial costs, particularly as the transition accelerated towards the end of the current decade.
    “Coal mining will be the most affected by the decline in coal use, since downstream production can move to other energy sources.
    “In this context, many working people and small businesses in the coal-dep...
    7 min
  • Sasol triples 2030 decarbonisation target, makes net-zero by 2050 pledge
    Chemicals and energy group Sasol has announced a material acceleration of its decarbonisation plans, confirming that it will reduce greenhouse gas (GHG) emissions by 30% by 2030 rather than by the much-criticised 10% level to which it initially committed.
    CEO Fleetwood Grobler has also pledged that the group will transition to net-zero emissions by 2050 and has confirmed that Sasol will not invest in any new coal reserves.
    The JSE-listed group will invest between R15-billion and R25-billion by the end of the decade to meet the new target, which involves reducing South African Scope 1 (direct) and Scope 2 (derived from the consumption of purchased electricity, steam, heat and cooling) emissions from a 2017 baseline of 63.9-million carbon dioxide equivalent (CO2e) tons to 44.7-million CO2e tons.
    The target represents a 19-million CO2e tons reduction in emissions over the period and is a tripling of Sasol’s previous target, which aimed to reduce GHG emissions to 57.5-million CO2e tons by the end of the decade.
    In addition, Sasol has pledged to reduce Scope 3 emissions (indirect emissions that occur in its value chain) from a 2019 baseline of 35.6-million CO2e tons to 28.5-million CO2e tons by 2030.
    Much of the decarbonisation plan to 2030 will involve replacing coal in its value chain with natural gas, starting with another 40 PJ/y to 60 PJ/y by 2030.
    “While our end-state is a move to green hydrogen and sustainable carbon feedstocks, we believe gas has an important role to play in our mix, as a transition feedstock, with an inherent but significantly lower GHG footprint versus coal,” Grobler says.
    COAL-TO-GAS SHIFT
    Sasol is considering new sources of gas, including securing additional resource from the Pande and Temane gasfields in southern Mozambique, as well as importing liquefied natural gas (LNG) through Motola, in Maputo, and Richards Bay, in KwaZulu-Natal. Grobler reports that negotiations are at an advanced stage for the importation of LNG through a proposed import terminal at Motola.
    Much of the capital investment to 2030 will, thus, be directed towards a gas reforming technology that will enable Sasol to inject the gas into its processes, with the balance flowing towards energy efficiency projects, mostly at Secunda.
    CFO Paul Victor says most of the investments will take place between 2026 and 2028 and will be easily absorbed into the group’s anticipated yearly capital investments profile of between R20-billion and R25-billion.
    Victor does not anticipate any coal-related impairments, despite the falling consumption profile, stating that it has sufficient reserves to 2043.
    The group will also procure 1 200 MW of renewable electricity from independent power producers by 2030, the first 600 MW of which in partnership with Air Liquide.
    GREEN HYDROGEN
    Grobler again stressed the leadership role that Sasol intended playing in the development of Southern Africa’s green hydrogen economy but indicated that the bulk of the investment would arise only after 2030.
    A new business, called Sasol ecoFT, is being established, however, to lead the development of sustainable solutions that leverage the group’s Fischer Tropsch (FT) technology.
    “We believe that FT is uniquely positioned to thrive in a fossil fuel-free world.
    “One of the first applications for the technology is likely to be sustainable aviation fuels.”
    Sasol is partnering with Enertrag, Afrox and Navitas on a sustainable aviation fuel initiative, involving the deployment of green hydrogen, wind and solar assets at Secunda, in Mpumalanga, to produce carbon-neutral jet fuel.
    Currently, Sasol produces certified aviation fuel from coal.
    “South Africa has fantastic potential for renewables and low-cost green hydrogen production, which positions us well for export opportunities,” Grobler says, indicating that its primary objective is to shift from grey to green hydrogen rather than to pursue so-called blue hydrogen, which involves adding carbon capture to grey hydrogen production...
    8 min
  • Nkabane says South Africa will move ahead with nuclear procurement in 2022
    Deputy Mineral Resources and Energy Minister Dr Nobuhle Nkabane says that South Africa plans to issue a request for proposal (RFP) for a 2 500 MW nuclear programme by the end of March 2022 and complete the procurement in 2024.
    In an address to the sixty-fifth general conference of the International Atomic Energy Agency on Tuesday, Nkabane reported that government had received positive responses from 25 companies to a request for information issued in June 2020 and stated that the National Energy Regulator of South Africa (Nersa) had concurred with a Ministerial section 34 determination for the procurement.
    In its concurrence statement, Nersa listed a number of suspensive conditions, including:
    satisfaction of Decision 8 of the Integrated Resource Plan of 2019 (IRP 2019), which requires that the nuclear build programme be at an affordable pace and modular scale that the country can afford;
    recognition of technological developments in the nuclear space;
    that the rationality for a nuclear procurement be established through a demand analysis;
    that the generator of the electricity produced be Eskom Holdings, or any other organ of State, or in partnership with a juristic person;
    that the buyer of the electricity be Eskom Holdings, or any entity determined through Eskom’s unbundling process as the future buyer of electricity;
    that the Department of Mineral Resources and Energy (DMRE), or an organ of State, be the procurer and be responsible for determining a fair, equitable, transparent, competitive and cost-effective procurement process; and
    that new nuclear power be procured based on engineering, procurement and construction contract principles rather than through fragmented contracts.
    No mention was made by Nersa about the fact that there is no allocation in the IRP 2019, which covers the period to 2030, for new nuclear.
    The only allocation made for nuclear relates to a life extension project at the Koeberg power station, in the Western Cape.
    The DMRE has indicated previously, however, that any new nuclear capacity would not be introduced to the grid prior to 2030, owing to the long lead times involved in procuring and building nuclear.
    Government has also indicated its preference for small modular reactors, despite the fact that no such reactors are yet commercially available and South Africa has abandoned the Pebble Bed Modular Reactor programme, which has since been transferred to Eskom’s custodianship.
    In addition, Eskom has indicated that, besides the Koeberg extension, it has no immediate nuclear plans, partly owing to its weak financial position, but also because of the time and cost advantages associated with renewable energy and gas-to-power, which it is investigating as it moves to decommission coal stations.
    The State-owned utility has indicated that it hopes to pursue a just energy transition transaction to raise concessional finance to repurpose and repower some of its old power stations, including by installing solar photovoltaic, gas and battery energy storage.
    In her speech, Nkabane said the proposed nuclear procurement would support government’s Economic Reconstruction and Recovery Plan and ensure security of energy supply.
    “In line with the nuclear energy policy as we embark on the just energy transition in South Africa, we recognise that nuclear plays a pivotal role as one of the clean energy sources that are needed to achieve net-zero emissions by 2050,” she said.
    4 min
  • iREREP to have 30-year lead time, private sector to be responsible for technical and financing aspects
    The Department of Public Works and Infrastructure (DPWI) launched its Integrated Renewable Energy and Resource Efficiency Programme (iREREP) by opening its request for information (RFI) on September 20, saying its 30-year lead time is aligned with government’s National Infrastructure Plan 2050 and will be rolled across various DPWI-managed buildings up to 2050.
    The iREREP’s RFI is intended to test the market for additional ideas and information which comprehensively looks at ways to deliver mutual value through strong partnerships across government and the private sector, Public Works and Infrastructure Minister Patricia de Lille said.
    Also known as the Photovoltaic (PV) and Water Savings on Government Buildings Programme, this project was gazetted as a Strategic Integrated Project in July 2020, as part of a credible pipeline of projects in the Infrastructure Investment Plan which was approved by Cabinet in May 2020.
    Recent studies into the DPWI’s property portfolio place yearly electricity and water consumption at an estimated 4 021 GWh and 39-billion litres, respectively, equating to an average yearly expenditure on electricity of R2.4-billion, and R1.8-billion for water.
    In addition, DPWI properties generate about 822-million tonnes of waste a year.
    OBJECTIVES
    Over the 30 years of its implementation, the DPWI says the project will result in savings and revenue worth over R401-billion, which can be “reallocated to other government priorities”, and make a direct contribution to South Africa’s gross domestic product of R253-billion.
    As a result of implementing the iREREP, the department says 3 800 new small businesses will be developed, 146 000 jobs created and more than 117 000 people taught new skills.
    The iREREP is also envisaged to reduce the DPWI’s energy use intensity by between 22% and 45%, while reducing water consumption by between 30% and 55%.
    A reduction in waste and the diversion of 50% of currently-generated waste from landfill sites is expected to save 12-million tonnes from reaching landfills, while the programme is also expectd to reduce carbon dioxide and other greenhouse gas emissions from DPWI buildings by over 54.5-million tonnes.
    “Through this RFI process, the [DPWI] will be able to gain additional market insights that will drive the implementation of the programme, as well as provide an understanding of the appetite and readiness of the market to participate in this programme,” De Lille said.
    She added that the opportunity presented through the iREREP would also enable the DPWI to obtain a high-level understanding of enhanced technical solutions that are available in the market in relation to the iREREP and the capacity of the private sector to deliver on such solutions.
    ROLLOUT
    She also noted the RFI for the iREREP was aimed at enabling the DPWI to understand the financing needs of parties who would be interested in participating, and is also intended to support the department in the design of a future request for proposal (RFP), expected to be launched in January 2022.
    Thus far, the iREREP has received National Treasury approval for Phase 1 and has been registered to be implemented in collaboration with the private sector on a full design, finance, build, operate, transfer basis.
    In this regard, De Lille said, the private sector would be fully responsible for both the technical and financing aspects of implementing the programme.
    Having the private sector involved in this way, “seeks to fully leverage public and private sector partnership, spurring on South Africa’s thriving private sector infrastructure investment sector, supported by an efficient and reliable public sector procurement framework that delivers world class procurement on budget,” the Minister said.
    The RFI will be open for 30 days, after which an RFI evaluation is expected to be concluded by November 15.
    Thereafter, obtained information will be fed into the DPWI’s RFP documents – the drafting of which De Lille said had already started...
    6 min
  • Production of facelifted Polo starts at Kariega plant, on sale in 2022 in SA
    Production of the new-look Polo has started at Volkswagen’s manufacturing plant in Kariega.
    Vehicle models typically receive a make-over in the middle of their lifecycle.
    The Volkswagen manufacturing plant is currently operating on a three-shift pattern to build the new Polo (including the Polo GTI) for local and international markets.
    The first consignment of new Polos left the Volkswagen manufacturing plant at the end of August.
    The vehicles will be shipped to overseas markets from the Gqeberha harbour.
    The Volkswagen Polo is currently manufactured in Brazil, China, Spain and South Africa.
    Polos built in Kariega are exported to all right-hand-drive markets worldwide and Volkswagen also supplements production for left-hand-drive markets.
    The Kariega facility is also the sole manufacturer of the Polo GTI.
    The Volkswagen Polo was first launched in South Africa in October 1996.
    Since the sixth-generation Volkswagen Polo was introduced to the local market in January, 2018, more than 400 000 units have been manufactured at the Kariega plant, with more than 326 000 units (over 80% of the total volume) being exported to international markets.
    In the three years since the sixth generation of the hatchback was launched in the local market, it has sold a total of 73 439 units.
    “The Volkswagen Polo is the second best-selling passenger vehicle in South Africa (behind the Polo Vivo) and an important derivative for our brand,” says Volkswagen Group of South Africa Passenger Cars brand head Steffen Knapp.
    “In 2021 alone, we have sold over 10 000 Polos in the local market giving Volkswagen a share of 21.8% in the A0 Hatch segment.”
    The new Volkswagen Polo will retail from local Volkswagen dealers in the first quarter of 2022.
    3 min
  • Cabinet endorses more ambitious carbon pledge ahead of Glasgow summit
    Cabinet has approved a revised – and more ambitious – Nationally Determined Contribution (NDC) carbon mitigation target range for 2030 ahead of the upcoming COP26 gathering, which will take place in Glasgow, Scotland, in November.
    In a statement, Cabinet announced that South Africa had revised its 2030 climate change mitigation target range to 350 - 420 metric tons of carbon dioxide equivalent (Mt Co2-eq) for submission to the United Nations Framework Convention on Climate Change (UNFCCC).
    The country's target range for 2025 has been revised to 398 - 510 Mt Co2-eq.
    The new range represents an improvement on the 398 – 440 Mt CO2-eq range outlined in a draft NDC update, released for public comment in March.
    It is also a significant improvement on the 398 - 614 Mt CO2-eq range deposited with the UNFCCC in 2015 ahead of the Paris Climate Agreement.
    Paris Agreement signatories are required to deposit NDCs every five years and South Africa deposited its first NDC with the UNFCCC in October 2015 and was meant to submit a new NDC last year, but COP26 was delayed as a result of the Covid-19 pandemic.
    The Presidential Climate Commission (PCC) and Business Unity South Africa (Busa) both endorsed the 350 - 420 Mt Co2-eq range in their submissions on the draft NDC, with the PCC arguing that an increase in the level of ambition posed little downside risk to the country and offered considerable upside.
    Busa, meanwhile, described the range as realistic based on achieving the objectives proposed in the country’s current policies, but said that meeting the target would require “technology, finance and comprehensive support” from the international community.
    South Africa’s largest carbon emitter, Eskom, is hoping to use COP26 as an opportunity to market its just energy transition transaction, under which it aims to raise concessional finance to fund it own accelerated shift from coal, as well as to support workers, communities and businesses that will be negatively affected by coal decommissioning.
    “The revised target range is aligned with all the stakeholders that contribute towards the country’s efforts,” Cabinet said in its statement.
    The revised target range was also aligned to the recommendations of the Intergovernmental Panel on Climate Change (IPCC), it added.
    In its most recent report, the IPCC said that mitigation efforts had to be accelerated during the current decade to sustain any prospect of limiting the rise in the average global temperature to 1.5 °C above pre-industrial levels.
    The report stated that the 1.2 °C threshold has already been breached.
    During a recent presentation to lawmakers, Forestry, Fisheries and the Environment Minister Barbara Creecy stressed that, while NDC pledges were not legally binding, South Africa had every intention of complying and would, thus, deposit a carbon-reduction range backed by research.
    She warned, however, that besides South Africa’s moral obligation to contribute to reducing greenhouse-gas emissions, there was also a growing economic urgency to place the country on a lower-carbon trajectory, as doing nothing would pose “significant risks” as the European Union moved to implement a Carbon Border Adjustment Mechanism.
    South Africa’s improved NDC offer, she indicated, would be combined with a negotiation stance that will seek to secure commitments from developed countries on both climate mitigation and adaptation.
    Creecy bemoaned the fact that rich countries had not been honouring their $100-billion-a-year in climate financing and said that the figure would have to be significantly increased to meet the adaptation investment needs of a continent such as Africa.
    She again argued that yearly climate finance contributions for rich countries in the form of grants, concessional loans and blended-finance instruments would need to be increased to about $750-billion by 2030 to support developing countries in building up climate resiliency and to enable them to contribute to mitigation.
    The Bill, wh...
    6 min
  • Sasol, NRF call for energy transition and green economy solution proposals
    Integrated energy and chemicals company Sasol and the National Research Foundation (NRF) are requesting research proposals on science and engineering projects that can enable Sasol’s and South Africa’s energy transition, as well as the development of the country’s green economy.
    Of interest to Sasol is research in hydrogen production, renewable energy, energy storage and carbon dioxide conversion to chemical and fuels – all key areas critical to enabling its environmental and business sustainability goals.
    The call for applications for Sasol-NRF Research Grants for 2022 is also intended to enhance South African tertiary institutions’ research capacity in science, technology, engineering and mathematics disciplines, thereby addressing some of the key scarce skill gaps identified by the NRF.
    NRF strategic partnerships executive director Dr Aldo Stroebel says the demand for innovative solutions that respond to socioeconomic challenges and opportunities results in an increasing need for collaboration between industry and academia.
    “This prominent partnership will accelerate the co-creation of knowledge for impact, and skills development, addressing the critical sustainability agenda.”
    Sasol says it has a long history of funding research at South African universities through contract research and student bursaries. Over the past 16 years, it has also contributed more than R300-million through its Research and Technology (R&T) University Collaboration Programme, which provides research grants to academics for projects in the key disciplines of chemistry and chemical engineering.
    Sasol research and technology senior VP Dr Thembakazi Mali says the R&T University Collaboration Programme provides Sasol with a unique opportunity to not only support local academia, but also leverage external research efforts to find solutions to the complex technical challenges that must be addressed as part of Sasol’s climate change response efforts.
    She says Sasol R&T will also provide research grant recipients with additional support in the form of access to technical expertise and equipment.
    The call for proposals will close on October 29. Interested parties can send their applications by email to [email protected].
    Application documents can be found on the NRF’s website.
    3 min
  • Mercedes-Benz hands over final bus in 100-unit order from Putco
    Mercedes-Benz Buses has handed over the last unit in a 100-bus order from transport operator Putco.
    The delivery of this fleet was staggered into batches from December.
    Mercedes-Benz Buses is a brand of Daimler Trucks & Buses Southern Africa.
    The new buses comprise the OF1726, front-engine bus chassis equipped with the Marcopolo Torino G7 bus bodywork, and adds to Putco’s fleet of more than 1 850 vehicles.
    Putco is the biggest commuter bus operator in South Africa and transports more than 230 000 commuters daily in and around Mpumalanga, Gauteng and Limpopo.
    “The handover of the hundredth Mercedes-Benz bus today, is a culmination of hard work, dedication, and collaboration from both the Larimar/Putco and the Mercedes-Benz Bus teams,” says Larimar/Putco MD Franco Pisapia.
    “The first 23 buses were delivered in December and we have already seen happier passengers, as well as a shift in perception from the general public.
    “The company is deriving value for money due to reduced total cost of ownership, a comprehensive maintenance package, outstanding fuel efficiency, and reliability.
    “There is a reduction in on-route breakdowns, providing convenience and consistency in our operations,” notes Pisapia.
    “In addition, the new delivery has set the new fleet apart and created excitement among drivers who have taken ownership and pride in driving these buses.
    “This is a huge investment towards a sustainable transport system in our country. We are already discussing our future bus replacement programme, as we continue to strengthen our position in the market.”
    The after-sales service to Putco will be supported by the Sandown Commercial Vehicles dealership.
    2 min
  • PetroSA mulls geothermal as way to offset ‘decommissioning liability monster’
    Embattled State-owned gas-to-liquids refiner PetroSA is considering plans to harness geothermal energy from its mature or depleted gas wells to produce electricity and delay decommissioning.
    Addressing a conference in Cape Town this week, Central Energy Fund (CEF) CEO Dr Ishmael Poolo reported that PetroSA, which is a CEF subsidiary, was facing a “decommissioning liability monster” and that various prospects were being considered to repurpose the ailing operation.
    In a presentation to lawmakers in August, PetroSA indicated that its liabilities of R15.6-billion exceeded its R9.1-billion assets by R6.5-billion.
    “Key amongst these activities will include the exploitation of geothermal energy . . . [which] will not only allow us self-generation of power, but will also enable us to delay our decommissioning liability,” Poolo said in his speech.
    PetroSA has identified nine wells, connected to its offshore FA platform, that could potentially be exploited to produce geothermal electricity.
    The wells have been drilled to produce hydrocarbons and Poolo says the production heat losses have been negligible throughout the life of the field.
    “The project objective is for PetroSA to generate its own power instead of using gas fuel.
    “This would also assist in increasing sale gas reserves and delay the anticipated decommission project,” Poolo said in response to emailed questions posed by Engineering News.
    There were some international examples of geothermal energy being harnessed from mature hydrocarbon wells, with Poolo specifically citing the Wytch Farm Oilfield, in the UK, the Huabe Oilfield, in China, RMOTC, in the US, as well as Heerlen and Vogelaer, in the Netherlands.
    “The technology of obtaining geothermal energy from abandoned hydrocarbon ​wells allows reusing already drilled deep wells to generate electricity in an environmentally friendly way,” he said.
    The cost and financing of the proposed geothermal project had not been finalised, but “the preliminary capital requirements are estimated to be one-third of the current decommissioning liability”.
    Poolo indicated that various funding options were being considered and CEF was hoping to implement the project in the coming 18 to 24 months.
    “We believe that the exploitation of geothermal energy, which is within our reach, will not only position us to produce green energy for the future but will also ensure that we pave the way for South Africa towards a just and fair energy transition.”
    3 min

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