Engineering News Online Audio Articles

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

The first hot-rolled coil (HRC) has been produced at Scaw Metals' Union Junction complex in Ekurhuleni, heralding the reintroduction of competition into South Africa's flat-steel market.

The R5-billion steel investment, which has been 75% funded by Absa and Investec and 25% funded by the State-owned Industrial Development Corporation, is also the first new flat-steel mill to be built domestically since Saldanha Steel in the 1990s, but which has since been mothballed.

The project will increase Scaw's overall steelmaking capacity from about 500 000 t/y to 750 000 t/y once fully ramped-up; a process that is expected to unfold over the coming 45 days.

Barnes Group CEO Doron Barnes - whose company acquired Scaw Metals, together with its Haggie and McKinnon Chain units, in May 2018 - tells Engineering News that the casting of the first coil on August 11 represents a milestone for the company and the country.

For Scaw, it adds HRC to the group's primary steelmaking portfolio, which has hitherto consisted of only long-steel products.

As is the case with the long products produced by Scaw, the larger Barnes Group expects to absorb about half of the new mill's output across its various downstream operations.

The balance will be sold to domestic customers that are currently mostly reliant on imported material for their tubing, shelving and re-rolling operations.

Based on state-of-the-art Danieli processing equipment, the Germiston plant will produce narrow- and medium-width HRC up to a metre, at gauges of between 1.2 mm and 6.0 mm.

Barnes estimates that the plant will replace about R4-billion-worth of narrow-gauge steel imports yearly.

For South Africa, meanwhile, Barnes believes the investment will help address the current domestic manufacturing imbalance between flat and long steel.

While significant long-product capacity is currently in place, there has been no flat-steel alternative to ArcelorMittal South Africa (AMSA) since the closure of Highveld Steel in 2016.

He also believes that the investment offers tangible evidence of the benefits that can flow as a result of government's decision to place restrictions on scrap metal exports.

"I realise there is some negativity about the scrap export tax and the price preference system, but without these interventions we would struggle to access affordable material and there would be no advantage to manufacturing scrap-based steel in South Africa," Barnes states.

Describing it as an industrial policy success story, Barnes admits to being concerned about current efforts by AMSA and others to have the scrap export trade restrictions overturned.

While acknowledging that the policy has placed pressure on AMSA's Newcastle operation, he also points to the pricing differential that has emerged between long- and flat-products as a result.

Barnes attributes the dramatic improvement in prices for downstream consumers of long products to a combination of producer competition and a policy intervention that has offered mini-mills certainty of scrap supply at competitive prices.

He, thus, calls for ongoing policy certainty, which he believes could stimulate further investment, including by Scaw, which is considering a R1-billion investment into a new electric arc furnace.

Another advantage highlighted by Scaw's Mzamo Mjekevu is the fact that the mill is producing flat and long steel that is regarded as "greener" than material being produced in blast furnaces.

This, owing to the lower carbon footprint associated with the electric-arc furnace process, where direct emissions can be near zero if the electricity is sourced from renewable energy, and the fact that "circularity" is embedded through the use of scrap.

The group is continuing to assess options for improving the green credentials of its steel even further by integrating renewable electricity...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

Electricity and Energy Minister Dr Kgosientsho Ramakgopa has confirmed that an independent technical assessment of the R6.1-billion billing dispute between State-owned utility Eskom and the City of Johannesburg's (CoJ's) wholly-owned electricity utility City Power will be carried out over the next 14 days.

Upon conclusion of the technical assessment on November 25, a final decision will be reached. Both parties have agreed to abide by the findings in full, whatever the outcome.

This is expected to definitively resolve the issue and effectively keep the matter out of the courts.

"There is no crisis looming. There's been some degree of trepidation [and] unease. Businesses have got some apprehension. Organised voices have raised the issue of what are the possible implications of this action by Eskom materialising, resulting in electricity interruption to Johannesburg. It's going to have dire consequences.

"But I'm confident that, once we get to conclude this technical assessment, we'll be able to provide a way forward in the most absolute fashion," Ramakgopa said at a media briefing in Johannesburg on November 11.

The announcement, made alongside CoJ executive mayor Dada Morero and various executives from City Power, comes after Eskom threatened last week to implement power cuts across the city from December 14 if City Power does not pay its bills.

The disputed bills in question involve R3.4-billion in historic debt - which forms the primary focus of the dispute - along with an outstanding current account of R1.4-billion owed for October and an upcoming R1.3-billion for November, which is not yet payable, City Power CEO Tshifularo Mashava confirmed.

City Power began to default primarily because it disputed its monthly Eskom bill. Ramakgopa made it clear that this approach was problematic and that the user-pay principle must be upheld.

"If an individual customer has a query, that customer has an obligation to pay that current account as you set in motion the process of resolving the query. Once you are able to get to the bottom of the dispute, then you'll find remedies on how to then rectify the situation, historically, and also going forward, in the form of a credit note. But the customer still bears the obligation to pay until that dispute is resolved," he said.

As such, City Power has now agreed to immediately pay up its current account in full and has committed to remaining up to date with this going forward.

Ramakgopa said the non-payment of the current account was what spurred Eskom to react and that the resolution of the current account default would effectively alleviate Eskom's concerns and stave off the utility's threats of city-wide power cuts.

"We have agreed [to the payment of the current account] because that is what had resulted in the triggering of that notice [by Eskom to implement power cuts]. It falls away because of a commitment to pay the current account, so the notice then gets to be withdrawn.

"Really what the notice was seeking to do was to ensure that we get to that point, that we pay the current account as we resolve the [historic] issues there that have been placed before Eskom by City Power," Ramakgopa explained.

While the payment of the current account will stave off an immediate crisis, the technical assessment will seek to resolve the ongoing billing dispute regarding the R3.4-billion in outstanding historic debt, which dates back to 2019.

However, it will also seek to verify or correct the accuracy of Eskom's billing to City Power so that billing disputes do not arise again in future.

Ramakgopa said the independent expertise required for the assessment will be sourced from within the State, albeit from bodies that have no relation to either City Power or Eskom. He said the parties would be approaching the South African National Energy Develo...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

Government has confirmed that the Independent Power Producer Office (IPPO), which has overseen the public procurement of more than 7 300 MW of operational renewable-energy capacity since 2011, will oversee a pilot programme to procure South Africa's first independent transmission projects (ITPs).

Speaking at Res4Africa's yearly conference in South Africa, the National Treasury's Jeffrey Quvane said that the decision had been made in light of the capabilities and frameworks that had been created at the IPPO to successfully carry out public procurement.

However, he indicated that that this institutional arrangement could be changed after the pilot phase, indicating that the procurement could in future be carried out by a new entity or even the National Transmission Company South Africa (NTCSA) itself, which has been operating as an independent subsidiary of Eskom Holdings since July.

The decision to procure new grid capacity using the ITP approach, Quvane explained, was based on a government assessment that South Africa's transmission infrastructure deficit, which was impeding the connection of new generation capacity, was a "country problem" that could not be addressed using the NTCSA's balance sheet alone.

The transmission investment backlog was estimated at R390-billion.

Incorporating private sector participation was also seen as a way of maintaining the financial discipline associated with the R250-bllion Eskom debt-relief package.

The package included restrictions on the raising of new debt by the entity to fund capital projects; restrictions that were less stringent, however, when it came to transmission investments.

The National Treasury was also aiming to implement an ITP procurement model that did not add further contingent liabilities to the national accounts and was working with the World Bank on a credit guarantee instrument that was structure to de-risk such investments for investors and lenders in the absence of government guarantees.

Quvane said the current priority was to finalise the regulations required to facilitate private sector participation in line with the Electricity Regulation Amendment Act, to which President Cyril Ramaphosa had assented following its passage through Parliament but which was not yet in operation.

Work was also under way to finalise a Ministerial determination opening the way for such procurement.

Ministry of Electricity and Energy official Joseph Maraba told conference delegates that the regulations would be released for public comment early next year before being finalised.

Quvane indicated, meanwhile, that government aimed to finalise both the regulations and the Ministerial determination by the end of March.

No timeframe was provided for the identification of the pilot projects themselves, which would be selected together with the NTCSA from the priority powerline projects included in the NTCSA's recently updated Transmission Development Plan.

Likewise, no timeframe was provided for the issuance of the request for proposals.

However, the recently released Medium-Term Budget Policy Statement confirmed that a pilot ITP procurement process was being prepared for the second half of 2025 using a build-operate-and-transfer model and supported by the new credit-guarantee vehicle.

The World Bank's Multilateral Investment Guarantee Agency has been playing a central role in designing he instrument, which will seek to mimic the role that government guarantees conventionally play to de-risk projects for developers without exposing the national balance sheet to more contingent liabilities.

Several development finance institutions will be approached to participate and Quvane indicated that it was likely to be canvassed during an upcoming National Treasury roadshow at the end of November.

Engineering News editor Terence Creamer discusses Eskom's opposition to the National Energy Regulator of South Africa's decision to grant four new electricity trading licences; whether Eskom's opposition to the granting of the licences came as a surpsie and what will happen next.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

The newly appointed head of Scatec's sub-Saharan Africa business, Alberto Gambacorta, says the group is pursuing a 5 GW pipeline of renewable energy and storage opportunities in the region and especially South Africa, which is already the Norwegian group's global hub for engineering and operations.

Gambacorta, who was named GM for Scatec sub-Saharan Africa on November 6, tells Engineering News that the region remains a priority market for the Oslo-listed company, where it has invested about $2.5-billion since 2011.

Having been a regular and successful participant in South Africa's various public procurement bid windows for renewable energy, hybrid generation and battery energy storage, Scatec is also positioning itself for the private market opportunities that have come to the fore as a result of regulatory changes.

These will be pursued through the Lyra Energy platform that Scatec launched jointly with Standard Bank and Stanlib earlier in the year and which offers distributed access to utility-scale renewable energy to medium and large commercial and industrial companies.

Gambacorta says the offering relies on a wheeling model, but that the participants are assessing trading prospects and are, thus, paying close attention to regulatory developments relating to the licensing of new traders, which Eskom is currently opposing legally.

He is also keeping close tabs on the potential for independent transmission projects in South Africa, noting that the company has already built many kilometres of power lines and substations in South Africa to connect its plants to the national grid.

Scatec will also continue to participate in public procurement having recently progressed the 103 MW/412 MWh Mogobe battery energy storage project, valued at $170-million, in the Northern Cape to commercial close.

The company is also the engineering, procurement, and construction (EPC) contractor for the project and will provide it with operations and maintenance (O&M) as well as asset management services.

In fact, its Cape Town office is also an EPC and O&M global hub, providing such services for Scatec projects and operations globally and even to some third parties.

At about 300, South Africa also has the highest number of employees in the larger group, and Gambacorta, thus, listed talent development as a key priority as he takes up his new role.

Gambacorta himself holds a Master of Science in Mechanical Engineering degree from Universitá degli Studi di Padova, and subsequently completed an Executive Masters in Energy Management from ESCP Business School, BI Norwegian Business School, and IFP - Institute Francais du Petrole.

Having worked for Scatec in Europe, Asia and South America, he moved to South Africa in 2018 where he served as senior VP of business development at Scatec and was instrumental in developing the company's project portfolio in South Africa and Botswana.

"Southern Africa represents a crucial market for renewable-energy development, and I am honoured to take on this role.

"I look forward to working with our talented team and stakeholders to accelerate the country's energy transition and deliver sustainable power solutions," Gambacorta says.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

The newly appointed head of Scatec's sub-Saharan Africa business, Alberto Gambacorta, says the group is pursuing a 5 GW pipeline of renewable energy and storage opportunities in the region and especially South Africa, which is already the Norwegian group's global hub for engineering and operations.

Gambacorta, who was named GM for Scatec sub-Saharan Africa on November 6, tells Engineering News that the region remains a priority market for the Oslo-listed company, where it has invested about $2.5-billion since 2011.

Having been a regular and successful participant in South Africa's various public procurement bid windows for renewable energy, hybrid generation and battery energy storage, Scatec is also positioning itself for the private market opportunities that have come to the fore as a result of regulatory changes.

These will be pursued through the Lyra Energy platform that Scatec launched jointly with Standard Bank and Stanlib earlier in the year and which offers distributed access to utility-scale renewable energy to medium and large commercial and industrial companies.

Gambacorta says the offering relies on a wheeling model, but that the participants are assessing trading prospects and are, thus, paying close attention to regulatory developments relating to the licensing of new traders, which Eskom is currently opposing legally.

He is also keeping close tabs on the potential for independent transmission projects in South Africa, noting that the company has already built many kilometres of power lines and substations in South Africa to connect its plants to the national grid.

Scatec will also continue to participate in public procurement having recently progressed the 103 MW/412 MWh Mogobe battery energy storage project, valued at $170-million, in the Northern Cape to commercial close.

The company is also the engineering, procurement, and construction (EPC) contractor for the project and will provide it with operations and maintenance (O&M) as well as asset management services.

In fact, its Cape Town office is also an EPC and O&M global hub, providing such services for Scatec projects and operations globally and even to some third parties.

At about 300, South Africa also has the highest number of employees in the larger group, and Gambacorta, thus, listed talent development as a key priority as he takes up his new role.

Gambacorta himself holds a Master of Science in Mechanical Engineering degree from Universitá degli Studi di Padova, and subsequently completed an Executive Masters in Energy Management from ESCP Business School, BI Norwegian Business School, and IFP - Institute Francais du Petrole.

Having worked for Scatec in Europe, Asia and South America, he moved to South Africa in 2018 where he served as senior VP of business development at Scatec and was instrumental in developing the company's project portfolio in South Africa and Botswana.

"Southern Africa represents a crucial market for renewable-energy development, and I am honoured to take on this role.

"I look forward to working with our talented team and stakeholders to accelerate the country's energy transition and deliver sustainable power solutions," Gambacorta says.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

South Africa's Industrial Development Corporation (IDC) is in the process of setting up the institutional capacity to house the Green Hydrogen Just Energy Transition (JET) Secretariat, which is being established as the country's single point of contact and coordination for public and private green hydrogen initiatives.

COO Joanne Bate tells Engineering News that recruitment processes are under way and that the secretariat, which will be coordinated and set up by Mahandra Rooplall, should be fully staffed by early 2025.

It will also be ringfenced from the development finance institution's own commercial strategy in the area of green hydrogen, which will be pursued in parallel.

The secretariat will support the coordination of activities that have been identified as essential to the eventual development of a green hydrogen industry and ecosystem, including global advocacy in areas such a standard setting and the creation of frameworks to firm up the initial offtake needed to secure project finance.

It will also support the efforts of workstreams that are being established to facilitate decision-making on various cross-cutting issues.

These relate to project funding, the supply of and demand for green hydrogen, the shared infrastructure needed to lower the capital costs of investments, the provision of support for technology incubation and skills development, the crafting of supportive policy and regulation and ongoing community engagement.

The decision to establish the secretariat follows both the finalisation of the implementation roadmap for the JET Investment Plan - which includes scope to support green hydrogen alongside electricity and new energy vehicles - and the Green Hydrogen Commercialisation Strategy.

The strategy has identified two distinct markets, namely export demand, driven by the international trade of green-hydrogen derivatives, and domestic demand, driven by fuel switching and new use cases in the areas of mobility, industrial processes, agriculture and power.

Bate says that both markets are receiving attention, but that priority will be given by the secretariat to key project enablers, such as offtake, standards and shared infrastructure, the absence of which is impeding commercial development.

Bate says it is particularly important for South Africa that there is consistency in the definition of offtake rules across key importing countries in Europe and Asia so as to help de-risk South African projects.

"If you're exporting low-carbon hydrogen that qualifies as low carbon or green in Japan and Europe and those rules change, there's a risk that your offtake will be compromised.

"And that's why we are prioritising the issues of ensuring consistent standards and rules around the carbon-intensity of the product."

It is likely that the South African strategy will also be refined over time, given that certain market opportunities for South Africa - such as fuel-switching in the marine sector - are seen as potentially materialising ahead of other opportunities identified in the strategy.

"Our initial view was that shipping was probably a 2030 to 2035 opportunity.

"But given the focus on decarbonisation of shipping and given South Africa's location on a number of global trade routes, we believe that there could be an opportunity to accelerate."

Bate acknowledges growing cynicism about the prospects for green hydrogen, and acknowledges that this scepticism has arisen partly because of the initial hype.

However, she argues that it remains a high-potential industrialisation opportunity for South Africa, owing to the country's natural resource advantages in the areas of sun, wind and land and the proposal that production be based largely on desalinated water.

"This is a 25-year value chain opportunity, which requires systematic efforts to unlock and to de-risk.

"W...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

JSE-listed AECI has announced the signing of a share purchase agreement with a consortium involving Old Mutual Private Equity (OMPE) and Sphere Investments to sell its entire ownership stake in wholly-owned subsidiary Much Asphalt for an estimated R1.1-billion.

The deal will be financed through a combination of debt and equity and is expected to close during the first quarter of next year.

Much Asphalt manufactures and supplies bituminous products that are widely used in infrastructure projects, such as road and runway construction, as well as for private applications. Its product offerings include hot and cold asphalt, bituminous road binders, emulsions, primers, precoats and modified binders.

AECI said the divestment was in line with its strategic focus on core businesses, specifically AECI Mining and AECI Chemicals. The company said on November 4 that the move reflected its intent to divest from operations that do not closely align with its primary business objectives.

This reallocation aligns with AECI's strategy to streamline its portfolio and establish a foundation for future growth. AECI further stated that this shift is intended to improve operational efficiency and enhance performance by leveraging in-house expertise in areas where the company possesses strong market potential and competitive advantages.

The sale remains contingent on approval from the Competition Commission, as well as the finalisation of a restructuring agreement between AECI Mozambique and Much Asphalt Mozambique regarding operations in Mozambique.

For the year ending December 31, 2023, Much Asphalt recorded earnings after tax of R74-million.

"Together, OMPE and Sphere provide a platform for financial strength, market access and long-term success for Much Asphalt. This transaction is another significant step in our strategic journey, and we are pleased with the outcome," AECI group CEO Holger Riemensperger said.

OMPE said such an investment in South Africa's road infrastructure, a key enabler of economic growth and job creation, aligned with the objectives of the Government of National Unity. This aspect, when combined with Much Asphalt's competitive offering, meant that the company would be well-positioned to play a meaningful role in the country's road infrastructure spend over the medium to long term.

"Road infrastructure plays a pivotal role in enabling economic development, connecting South Africans and empowering previously disadvantaged communities in isolated parts of our country. Our investment in Much Asphalt is a continuation of our 21-year track record of investing in high-quality businesses which supply critical goods and services to their customers," Sphere director Mohammed Sabi said.

The transaction marks the first and anchor investment in OMPE's newly launched OMPE Fund VI. OMPE and Sphere will partner with the management team over the investment tenure and will seek to generate transformative growth and business transformation to generate a robust return on investment.

"We have confidence in the infrastructure repair initiatives under the new South African government and actively look to invest behind sectors that we think will recover to more normal levels over the medium to long term, compared to a volatile and abnormal last ten years for the South African economy. An effective road network is critical to the . . . rebuild that is underway in South Africa, which should stimulate economic growth and lead to the creation of new jobs," OMPE co-head Jacci Myburgh said.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

The Independent Power Producer (IPP) Office has confirmed that it will oppose a legal attempt by two renewables consortia to prevent the payout of preferred-bidder guarantees called after their projects failed to advance to commercial close.

Both consortia - Engie-Pele Sannapos Solar PV Consortium and Globeleq-Mainstream SA Renewables Power - were selected as preferred bidders during Bid Window 5 (BW5) of the Renewable Energy Independent Power Producer Procurement Programme, launched in 2021.

A total of 2 600 MW was allocated for procurement from wind and solar PV technologies during the bid window, which was the first renewables round initiated in line with Ministerial determinations arising from the Integrated Resource Plan of 2019.

It also followed a long procurement hiatus, triggered when Eskom announced in 2015 that it would no longer enter into new power purchase agreements with IPPs based on a claim that Eskom had sufficient generation capacity.

South Africa subsequently experienced extreme power disruptions, which have since tapered with loadshedding having been suspended since March 26.

A total of 25 wind and solar preferred bidders were selected during a round where the weighted average price across both wind and solar PV projects came in at 47.3c/kWh, the lowest prices bid since the launch of South Africa's renewables programme in 2011.

Several projects, however, ran into financial difficulties amid supply-chain disruptions associated with Covid lockdowns and a spike in energy prices that followed Russia's invasion of Ukraine in February 2022.

A number of BW5 projects, thus, failed to reached commercial close, triggering the payment of preferred-bidder guarantees.

The two consortia initiated their legal challenges in October after the IPP Office "presented the preferred bidder guarantees for payment on the basis of the terms thereof".

"Their action is an attempt to prevent a payout by ABSA Bank of the preferred bidder guarantees," the IPP Office told Engineering News in response to questions.

The IPP Office also confirmed its intention to oppose both cases, saying that "once the pleadings have been closed the matter will be heard".

However, it refused to be drawn on the amounts involved or on what the request for proposal documentation said regarding the conditions for forfeiture of preferred-bidder guarantees.

It was also not clear whether similar attempts could be made by others, given that 14 projects with a combined capacity of 1 400 MW selected under BW5 failed to advance to financial close, while five projects with a combined capacity of 1 600 MW had failed to close under the risk mitigation round.

During a briefing in October, Electricity and Energy Minister Dr Kgosientsho Ramokgopa expressed his support for the pulling of bid bonds even if it resulted in legal challenges.

"We must stick to the rules of this programme," he said.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.

More than 40% of South Africans are considering purchasing an electrified vehicle (EV) in the next five years.

This is according to a survey by Ford Motor Company, with most respondents preferring hybrid technology.

EV in this instance includes hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).

Ford conducted the survey across Australia, Saudi Arabia, Philippines, New Zealand, South Africa, South Korea, Thailand, Vietnam and the United Arab Emirates.

Ford is gearing up to build and sell the PHEV Ranger pickup in South Africa.

"This research highlights the need for continued efforts to educate the public about EVs, address concerns about cost, range and infrastructure, and to promote the benefits of electric mobility," says Ford South Africa product marketing executive director Sunil Sewmohan.

Ford says the research revealed that South Africans are relatively familiar with EVs, with most respondents classifying them as being 'fun to drive', 'cool', 'sporty' and 'easy to own'.

More than 30% of respondents said they had ridden in an EV, with 19% claiming to have driven one, and more than 70% noting that they had at least read about EVs.

However, almost half of respondents in South Africa said they were not aware of any public charging sites within 20 km of their homes.

Twenty per cent of respondents said they were concerned about the resilience of the power network, with 47% saying they were worried about EV charging infrastructure.

Service stations ranked highest as the preferred location for charging sites, followed by shopping centres and office buildings.

According to almost three-quarters of those surveyed, possible future loadshedding in South Africa would impact their decision to buy a BEV.

Similarly, 70% said charging infrastructure would affect their decision to purchase a BEV.

When it comes to the type of EV, HEVs came out on top, followed closely by PHEVs, with BEVs ranked third.

Saving money by not buying fuel was rated as a top benefit of owning an EV, but many believe maintenance costs for EVs are higher in the long run.

Just under 40% of respondents believe that charging an EV at home is as expensive as filling up a petrol- or diesel-powered vehicle.