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Electricity and Energy Minister Dr Kgosientsho Ramokgopa has expressed confidence that tariff and non-tariff solutions can be found to ensure that Eskom is able to meet the obligations set by the National Treasury as part of the R256-billion debt-relief package while still allowing the entity to invest in new generation capacity.

In a briefing called to mark the fact that, as of October 13, loadshedding had not been implemented for more than 200 days, Ramokgopa expressed support for the State-owned entity's plan to build 2 GW of new wind and solar PV capacity over the coming two to three years.

CEO Dan Marokane said the idea was to pursue a "step change" in Eskom's renewables generation, which was currently limited to small-scale solar PV and the Sere Wind Farm and its pumped hydro schemes.

"We postponed the shutting down of some of our stations, as was initially planned, so as to enable us to shore up security of supply and also to enable us to do an orderly transition.

"[So] what we need to do is to really bleed in new technologies alongside our existing operations; on our land, on the back of the capacity that we have with our people and closer grid connectivity.

"And we have indicated that over the next two to three years, we see a pipeline of just over 2 GW of opportunities," Marokane said, referring specifically to solar PV projects alongside coal stations such as Lethabo, where the briefing was held, and the closed Komati station, where the solar PV plant would be coupled with battery storage.

He indicated that solar PV and wind could be added in close proximity to five coal stations in Mpumalanga, as well as at the Sere Wind Farm and indicated that Eskom was also still studying prospects for the Tubatse pumped hydro scheme.

The funding strategy for this new build had not yet been announced, but Marokane said it would involve own-build and partnerships with the private sector.

Such a funding strategy was suggestive of Eskom raising new debt; an activity that it was currently prevented from undertaking without the explicit permission of the Minister of Finance.

The National Treasury has also indicated that such approval would depend on Eskom showing proof that it was becoming more self-sufficient and less reliant on the taxpayer to remain a going concern.

The utility has argued that a rapid migration to cost-reflective tariffs would be required to improve its financial sustainability and it has made a revenue application to the National Energy Regulator of South Africa (Nersa) outlining its case for steep tariff hikes to support such a migration.

Known as the sixth multiyear price determination, the submission includes an application for allowable revenue of R446-billion for the 2025/26 financial year that, if granted, would translate to a tariff increase for direct Eskom customers of 36.15% on April 1.

Despite being Eskom's shareholder Minister, Ramokgopa has slammed the application as being "untenable", particularly in light of the Government of National Unity's second apex priority relating to reducing poverty and the high cost of living.

Nevertheless he denied that his stance was in contradiction with the National Treasury's expectation that Eskom transitions to tariffs that result in less reliance on the fiscus as a precondition for the conversion of debt to equity and for raising fresh debt for investments.

While stressing that he would not interfere with Eskom's application for new tariffs or Nersa's determination, he argued that a delicate balance could be struck to facilitate Eskom's shift to financial sustainability and shield poor households from another steep rise in electricity tariffs.

"The tariff is a transparent mechanism for supporting an entity such as Eskom . . . [but] then there are non-transparent policy instruments that we can use to ensure ...

Engineering News editor Terence Creamer discusses the official launch of the National Transmission Company South Africa (NTCSA); the immediate priorities of the entity; and whether it will find a model to allow independent power transmission projects to play a role in accelerating the rollout of the grid.

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An initial assessment by business into what it would involve to raise yearly freight rail volumes to 250-million tons, estimates that Transnet's recovery alone could lift yearly volumes to about 190-million tons, leaving 60-million tons to be met through reforms aimed at opening the rail network to private-sector participation (PSP).

The assessment also indicates that about R280-billion in investment will be required to reach the target.

Business for South Africa (B4SA) transport and logistics focal area senior executive Ian Bird told delegates to a Transport Forum that there was a firm commitment from all participants to the National Logistics Crisis Committee (NLCC) to achieving the target over the coming four to five years.

The target was viewed, he added, as the threshold at which rail would begin contributing positively to both economic growth and job creation, which would represent a major turnaround from an estimate that the sector had lopped up to R400-billion of gross domestic product in 2023 on the back of rolling stock and infrastructure backlogs.

Transnet Freight Rail (TFR) railed 152-million tons in 2023/24, following a collapse in volumes to 149-million tons in 2022/23 and has set a 193-million-ton "stretch target" for 2024/25.

However, Transnet CEO Michelle Phillips has confirmed that Transnet is not currently on track to meet the target, which business and government set as a precondition, along with several other measures, for raising South Africa's growth to 3% in 2025.

The growth target was set as part of the second phase of a government-business partnership to tackle South Africa's electricity, logistics and crime crises. This, following the partial success of the first phase, particularly in the area of electricity loadshedding, which has not been implemented since March 26.

Bird said the NLCC, which was set up in March last year, was hoping to draw lessons from the successes achieved under the National Electricity Crisis Committee, which had been operating for a longer period.

He said that significant progress had already been made in helping Transnet to arrest its decline and in supporting the development of the Freight Logistics Roadmap for a fundamentally restructured logistics sector.

TFR, he said, was showing openness to the support it was receiving from the NLCC and private partners, including by agreeing to the secondment of five B4SA executives into the office of the CEO.

In addition, mutual cooperation agreements concluded to allow business to buy spare parts for the locomotives, under a mechanism where those expenses could be clawed back over time, had also proved successful on the coal line in particular.

Transnet's recovery was insufficient, however, to support the envisaged broader economic upturn, with TFR still not delivering contracted volumes on the coal, iron-ore and general freight corridors.

"But we are still not going to get to the numbers the economy needs through Transnet alone," Bird said, highlighting the urgency of the structural reforms to open the network to third-party operators and private investment.

There was also a need to firm up the frameworks to allow third-party access to the rail network, including through the finalisation of a Network Statement and tariff that was supportive of PSP.

While Bird said the Network Statement, which could be released this month, would not be "perfect" he expressed optimism that it would still have "numbers that I think will make sense to people".

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The Department of Transport (DoT) aims to have the interim National Rail Masterplan (NRMP) ready by February next year, says DoT chief director Jan-David de Villiers.

This will be followed by an eight-month consultation process, with the final NRMP to be delivered by October 2025.

The DoT has contracted SMEC South Africa/Bigen Africa Services JV for the development and maintenance of the NRMP, with the project team consisting of transport planners, economists, civil engineers, project managers, legal specialists and macrologistics strategists, among others.

When the JV's three-year contract comes to an end, the goal is for a dedicated DoT unit to take over the planning and rollout of the masterplan.

The South African National Roads Agency also forms part of the NRMP project management structure, in order for the State-owned road builder to be aware of the commodities being targeted for a return and/or move to rail - and to not accommodate them through additions to the road network, says De Villiers.

He adds that the NRMP will weigh 83 commodities and their origins and destinations to determine if and how they could be moved to rail from road, including grain, chrome, coal and maize.

He says the strategic focus of the NRMP is to start from a zero base to develop a strategic rail network for South Africa.

This should include setting realistic growth rates for all rail traffic categories; for the State to exit rail lines that are not economically or strategically viable; the introduction of competition in the rail market and the attraction of private-sector participation (PSP) and investment in infrastructure, rolling stock and concessioning; as well as the development of a clear path for the long-distance passenger rail service.

Private-sector Participation

De Villiers says there are three timelines for the proposed PSP programme within the rail network.

The first target, set for December, is to conclude a memorandum of agreement with the Development Bank of Southern Africa (DBSA); to finalise the PSP pipeline in terms of the projects that will go into the pipeline; and to capacitate the PSP unit within the DoT.

By December next year, the DoT should have appointed the required specialists to work on bid development, with the bid windows announced in terms of the bids going to the market; and with the requests for proposals (RFPs) already out to market.

"Our main thrust with the RFPs is to reach financial close," says De Villiers.

From 2026 to 2029, the DoT will evaluate the bids, announce the preferred bidders and reach commercial and financial close.

The parameters of the PSP programme is to return the rail network to between 220-million and 250-million tons of goods a year, says De Villiers.

This means PSP projects supporting this goal will be implemented first.

On the passenger rail side, the aim is to reach a ridership number of 600-million to 725-million passengers a year, with the busiest corridors with the most potential to help deliver on this number to be pushed through first.

* De Villiers spoke at a Transport Forum event.

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The Danish and South African governments are partnering on a project to map the wind resources of the coal region of Mpumalanga, where access to the grid for new renewables projects is less constrained and where initiatives are under way to explore alternative livelihoods for workers and communities who could be affected by coal mine and power station closures.

Known as 'Wind Atlas of South Africa Phase 4 (WASA4)', the initiative is being jointly funded by the Danish Energy Agency (DEA) and the Department of Mineral Resources and Energy and is being carried out by researchers from the Danish Technical University, the South African National Energy Development Institute, the Council for Scientific and Industrial Research, the University of Cape Town and the South African Weather Service.

During a visit to South Africa, DEA deputy director-general Stine Leth Rasmussen told Engineering News that state-of-the-art knowledge and tools are being used for the assessment, which will also incorporate recent advances in wind-turbine technology that have improved the generation prospects of regions with lower wind speeds.

She says WASA4 is a continuation of a wind-modelling programme that Denmark has been supporting for more than a decade, and which has resulted in the release of previous WASA editions in 2012, 2014, 2019 and 2021 that are freely available to stakeholders.

WASA modelling has been completed for South Africa as a whole, but validation through measurement stations has hitherto focused primarily on the wind-rich Western, Eastern and Northern Cape provinces.

No such validation has been carried out previously in Mpumalanga, which has since emerged as a priority for South Africa's Just Energy Transition Partnership, which was launched in 2021 with the support of an International Partnership Group (IPG) and which Denmark joined in 2023.

The IPG has pledged $11.7-billion in concessional loans and grant funding to the South African programme, with Denmark having a made a $165-million commitment.

Through WASA4, the wind potential of South Africa's coal heartland will be mapped in detail, alongside similar studies in the North West, Gauteng and Limpopo, with the objective of de-risking wind energy developments in these provinces, but especially in Mpumalanga.

"By increasing the availability of measured data to validate the Mpumalanga wind resources, it is more likely that investors will be encouraged to locate wind projects in these regions," Rasmussen says.

In parallel, the DEA has also worked with the Independent Power Producer Office (IPPO) on a separate study that among other things assesses the potential price differential between wind and solar projects in the grid-ready Mpumalanga province with similar projects in the Northern Cape, where Eskom says the available grid access has been absorbed.

The IPPO will release the results once the study has been finalised, but Rasmussen says the early indications are that Mpumalanga's grid advantages could help offset the regions less potent wind resources and make projects cost competitive.

"A key finding is that while there is an ongoing process to expand the grid to often remote areas with abundant wind and sun, like the Northern Cape, an emphasis should also be put on driving developer interest towards renewable-energy projects in provinces such as Mpumalanga where wind resources are reasonably good and grid capacity is abundant."

Meanwhile, Ambassador Elsebeth Søndergaard Krone reports that Denmark has also worked with South African partners on the development of a digital map of potential sites in Mpumalanga where renewable-energy projects could be developed.

"The map improves the renewable-energy developer's access to crucial information about land use and infrastructure, and also gives an overview of the grid capacity that ...

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Led by solar PV, renewables are poised to transform electricity systems across the globe this decade, with the world on course to add more than 5 500 GW by 2030, the International Energy Agency's (IEA's) 'Renewables 2024' report states.

Such additions would increase global renewable electricity generation to over 17 000 TWh, which is roughly equal to the current combined electricity demand of China, the EU, India and the US.

It will also involve a deployment pace that will be almost three times that witnessed between 2017 and 2023, when some 2 000 GW of capacity was added.

The report forecasts that renewables will be meeting nearly half of global electricity demand by 2030, up from 30% in 2023. In addition, the role of renewables in overall energy consumption, including heating and transportation, is forecast to rise from 13% in 2023 to nearly 20%.

"Renewables are moving faster than national governments can set targets for," IEA executive director Fatih Birol says, noting that nearly 70 countries that collectively account for 80% of global renewable power capacity are poised to reach or surpass their current renewable ambitions for 2030.

"This is mainly driven not just by efforts to lower emissions or boost energy security - it's increasingly because renewables today offer the cheapest option to add new power plants in almost all countries around the world," Birol adds.

In 2023, global renewable capacity additions increased by more than 60% to almost 565 GW and 2024 is expected to be another record year, albeit at a more modest 20% growth rate. Yearly renewable capacity additions are expected to rise from 666 GW in 2024 to almost 935 GW in 2030.

Over the period to 2030, China is set to account for almost 60%, or more than 3 200 GW, of all renewable capacity installed worldwide, making the country home to almost half of the world's total renewable power capacity.

However, India is expected to grow at the fastest rate among major economies.

AFRICA TO ADD 90 GW BY 2030

Although the outlook for sub-Saharan Africa is more subdued, owing to funding and policy uncertainty, the IEA is forecasting that almost 90 GW of new renewable capacity will be added in the region between 2024 to 2030, increasing the region's current installed capacity by over 2.5 times.

"Expansion happens mainly in South Africa, which is responsible for installing nearly 40% of the region's new capacity," the report states.

Solar PV and wind additions make up nearly 80% of new capacity in the region, but outside of South Africa, hydropower makes up the majority of total additions.

Globally, solar PV is forecast to account for a massive 80% of the growth over the period, with the construction of new large solar power plants increasing alongside rooftop solar installations by companies and households.

Global solar manufacturing capacity, which is mostly located in China, is expected to surpass 1 100 GW by the end of 2024, more than double projected demand.

"Given the growing international focus on industrial competitiveness, solar PV manufacturing capacity is forecast to triple in both India and the US by 2030, helping global diversification.

"However, producing solar panels in the US costs three times as much as in China, and in India, it is twice as expensive."

By the end of this decade, the IEA forecasts that the share of wind and solar PV alone in global electricity generation is set to double to 30%, which will require governments to ramp up their efforts to securely integrate these variable renewable sources into power systems.

"Recently, rates of curtailment - where renewable electricity generation isn't put to use - have been increasing substantially, already reaching around 10% in several countries today.

"To address this, countries should focus on measures such as increasing power system flexibilit...

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Zero Carbon Charge (Charge), in partnership with the Automotive Industry Development Centre Eastern Cape (AIDC-EC), and together with the Eastern Cape provincial government, has broken ground on what it describes as an off-grid, ultra-fast, green electric vehicle (EV) charging network.

Once completed, the network in the Eastern Cape should consist of 29 sites, 18 of which will be dedicated to electric passenger and light commercial vehicles (LCVs), while 11 will be off-grid electric truck charging stations.

The charging stations will be located along the N10, N6, R56, N9 and N2.

Charge says both charging networks will operate independently of Eskom's predominantly coal-powered grid, which means they should be green and loadshedding-proof.

It is envisaged that construction of the first charging station at Wagon Wheels Farm Stall on the N6 will start in the first quarter of next year.

Charge believes the demand for this type of charging infrastructure is only set to grow.

Following the latest predictions by motor and energy industries stakeholders, there will be around 120 000 electric vehicles on South Africa's roads by 2027, and 360 000 by 2030.

"We are grateful for the support from the Eastern Cape provincial government in streamlining current application processes, which has allowed us to start breaking ground on the 29 planned charging stations across the province," says Charge chairperson Joubert Roux.

"Transformation to a low-carbon economy is not only about climate change, but also about ensuring the province remains economically competitive, whilst maintaining the principles of Just Transition," adds AIDC-EC CEO Thabo Shenxane.

Charge says landowners hosting the charging stations will earn 5% of the revenue generated by the vehicles making use of these facilities.

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa has expressed confidence that government and the National Transmission Company South Africa (NTCSA) are close to finding the "sweet spot" that will facilitate the integration of private Independent Power Transmission (IPT) projects.

Such projects could help accelerate the expansion of the grid, which has emerged as a bottleneck for new renewables projects in particular, and help unlock 53 GW of mostly renewables generation in the coming ten years. In South Africa, IPT projects are also referred to as Independent Transmission Projects, or ITPs.

Speaking at the formal launch of the NTCSA, which started trading as an independent subsidiary of Eskom Holdings on July 1, Ramokgopa insisted he had no intention of overreaching in his role as shareholder Minister and that the board should determine independently what IPT model would be acceptable to the NTCSA.

However, he highlighted the success of the IPT model internationally in helping to accelerate the development of grid infrastructure, highlighting that in Brazil, Chile, Peru and India, the model had enabled close to 100 000 km of new transmission lines between 1998 and 2015 and had helped mobilise private capital for the grid of more than $24.5-billion.

"We are not guinea pigs," Ramokgopa asserted, adding that South Africa had an opportunity to use its late-mover status to draw on best practices from other countries while localising the IPT model for its own circumstances.

"[But] one thing I have said to Priscillah Mabelane [NTCSA chairperson] is that we will not overreach.

"The board has fiduciary responsibilities and duties to protect the financial interests of NTCSA, while I have a duty to resolve the energy question in the country and ensure that we will achieve conditions of energy sovereignty and energy security.

"And those interests are not misaligned - there is a sweet spot we are seeking for," he said with reference to ongoing deliberations on what model should be adopted.

The Minister also praised the work of the World Bank and its Multilateral Investment Guarantee Agency in seeking to develop a credit guarantee vehicle that could provide guarantees to IPTs without placing further strain on the NTCSA balance sheet, or add to the National Treasury's contingent liabilities.

IPT OPTIONS UNDER CONSIDERATION

In an interview with Engineering News, Mabelane said the NTCSA was open to considering all IPT models, including a 'build, operate and transfer' framework.

"We are not selective subject to the sweet spot on risk sharing, as we do not have a balance sheet to guarantee build, operate and transfer [projects]."

In weighing the options, she indicated that NTCSA was seeking to draw lessons from the independent power producer procurement programme, which had facilitated R282.2-billion in mostly renewables investment since 2011, with the support of State guarantees.

"So if we can address that particular point [the guarantees], we can actually accelerate access to the private sector," Mabelane added.

She said a lot of work had already been done on IPT models and argued that the next key milestone would be the finalisation of regulations in terms of Section 34, which would be required before a procurement determination could be released.

It has been widely reported that the actual procurement was likely to be undertaken by a new office outside of the NTCSA, developed along the lines of the Independent Power Producer Office.

"We believe that the biggest part of it is to make sure that the risk-sharing mechanism is balanced."

In his address, interim NTCSA CEO Segomoco Scheppers reported that the regulations required for ITP procurement would be developed by the first quarter in 2025.

"This will be followed by a Ministerial determination for an ITP pilot," he said.

R11...

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Steel and Engineering Federation of Southern Africa (Seifsa) president Elias Monage has described the establishment of the Government of National Unity (GNU) as an opportunity to revive the metals and engineering sector by fixing the basics and raising infrastructure spend.

In an address reviewing the past year, he said attracting the investment needed for higher levels of growth would require an ongoing stabilisation of electricity supply, alongside efforts to "fix the very basics" in the areas of water, freight logistics, crime, and visa administration.

"These are the elementary elements of a viable economy," Monage said.

Speaking only days after organised business and government launched a second phase of a partnership to address the electricity, logistics and crime crises, and announced a goal to raise growth to 3% by 2025, Monage argued that the country was at a "hugely significant moment".

"After a gruelling election season, the agreement to form a GNU has been hailed as the emergence of a new centre in our heavily polarised political landscape.

"[This] is clearly a hugely significant moment and an opportunity for new beginnings."

He urged business to engage with the GNU in a way that held it to account while building a partnership for mutual growth.

"The secret of change is to focus all our energies not just on fighting the old but on building the new."

He said Seifsa should also use the opportunity to convince the GNU to urgently speed up infrastructure spend to boost demand.

For the metals and engineering sector, where investment had stagnated for years and where employment had slumped, action plans were required to drive demand.

"The Steel Master Plan aims to reverse negative perceptions regarding the steel industry and address constraints to demand by prioritising designation and local procurement, localisation, public and private sector projects, transformation and competitiveness.

"These and other initiatives, as outlined in the plan, will ensure that there is increased output and demand for the metal and engineering sector's intermediate and final products."

Engineering News editor Terence Creamer discusses the partnership previously formed between government and business to tackle loadshedding and other crises; the launch of a second phase of this partnership and the areas of focus; and some of the potential risks to this partnership.