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The South African government aims to Gazette an update to the Integrated Resource Plan (IRP) for electricity before the end of the 2024 calendar year and finalise South Africa's inaugural Integrated Energy Plan (IEP) by the second quarter of the 2025/26 fiscal year.

The timelines were provided during a meeting of the Portfolio Committee on Electricity and Energy on August 23, which was briefed by Electricity and Energy Deputy Minister Samantha Graham-Marê, as well as officials from the Department of Mineral Resources and Energy (DMRE).

The DMRE remains in place ahead of the formal establishment of the Department of Electricity and Energy and the Department of Mineral Resources and Petroleum.

DMRE director-general Jacob Mbele confirmed that Electricity and Energy Minister Dr Kgosientsho Ramokgopa would host a workshop with those stakeholders that had made "substantive comments" on the draft IRP2023.

The drafting process would not be started over, however, as had been requested by some stakeholders.

The draft IRP2023 was heavily criticised for its demand and technology cost assumptions, as well as for failing to adequately address the issue of loadshedding, while the public consultation process, which involved two virtual workshops, was slammed for being entirely inadequate.

The draft IRP2023 was Gazetted for public comment on January 4 this year with an initial closing date of February 23 for such comments, and was later extended to March 23.

A total of 4 338 comments were received, of which 136 were regarded by the department to be substantive in nature.

In a presentation to the portfolio committee, the DMRE said the comments had been grouped and catalogued into themes and would be taken into account, along with the outcome of the workshop, as part of the remodelling work that would be undertaken for the final plan, dubbed IRP2024.

The document would then be canvased at the National Economic Development and Labour Council, as well as with directors-general and Ministerial clusters before being presented to Cabinet for its final approval.

The presentation document indicates that the IRP2024 is scheduled to serve before Cabinet in October and be published in November.

Mbele expressed confidence that the IRP timelines would be met, but cautioned that the timelines outlined for the completion of the IEP may prove more difficult to meet.

He said that because South Africa had not yet succeeded in Gazetting an IEP it could take longer than indicated to finalise the document.

The DMRE, he said, was also sensitive to criticism over the lack of consultation regarding the draft IRP2023 and would, thus, seek to ensure higher levels of public engagement when drafting the IEP.

By law, the IEP is meant to be published yearly but Mbele noted that the section in the National Energy Act requiring such updates commenced only on April 1, 2024, following the signing of a proclamation on March 30, 2023.

The intention was to finalise and overarching plan - incorporating plans for electricity, liquid fuels and gas - showing how the objectives security of supply, affordability, access, and environmental responsibility and social equity would be dealt with.

Work was under way on the first phase of drafting, which would culminate in the input assumptions to be used in the IEP.

The next three phases involved technical modelling, the publication of a draft IEP and stakeholder consultation, which would be followed by the drafting of a final IEP for submission to Cabinet for approval.

Mbele cautioned that the longer the lag between finalising the assumptions and the final plan the more likely it would be that the plan's assumptions would be out of date by the time it was Gazetted.

However, he said that once the initial IEP was in place regular updating should be easier to achieve.

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Grindrod encountered a "very challenging environment" in the first six months of the year, says CEO Xolani Mbambo.

"It's been difficult."

Reporting on the ports and logistics group's financial results to end June 30 in Johannesburg, Mbambo noted that China's economic growth had stalled, with Zambia and Zimbabwe both hit by droughts.

Mbambo described behemoth China as the main importer of what Grindrod moved on a daily basis, which included chrome, coal, manganese, lithium, graphite and copper.

The South African economy also remained depressed, and would "need some serious work to change the tide".

A diminished appetite for commodities had led to depressed commodity prices, which also did not aid the JSE-listed group, which remained coal-heavy despite efforts to diversify.

On the positive side, some good economic growth was evident in the East African and Indian markets, as well as in Mozambique.

Grindrod saw core revenue for the six-month period drop by 1% compared with the same period last year, to R3.77-billion, with trading profit down 7%, to R1-billion.

Mbambo said he was "slightly disappointed" in the numbers.

He also noted that he was "slightly concerned" with the market environment when looking towards the end of the year.

He said the possibility of an iron-ore glut was raising its head as new mines came online, with China not showing strong appetite for steel, either.

Energy demand in Europe had also tapered off, which impacted coal exports.

Lithium and graphite demand were also down.

Mbambo noted that Grindrod had to remain cost-conscious - "no frills" - if it wanted to sustain its margins going forward.

"We have a book of over R2-billion of capex, and possible mergers and acquisitions," he added.

"Those have to be strictly quality projects…and will have to "give us cash from day one."

The current focus of the group's capex was in the rail and port terminals space.

Grindrod had also repatriated 13 locomotives from a project in Sierra Leone to South Africa, and would overhaul these to be redeployed.

Engineering News editor Terence Creamer discusses the findings of the latest South African Renewable Energy Grid Survey; how the survey results will be used; and the mixed picture that has emerged for wind and solar projects following the latest public procurement round.

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Minister in the Presidency Khumbudzo Ntshavheni reports that the Cabinet committee set up to consider interventions to moderate fuel price increases is likely to turn its attention to electricity tariffs amid growing fears of another steep hike in 2025.

Responding to questions posed during a post-Cabinet briefing, Ntshavheni said Cabinet was aware of growing anxiety over impending applications to the regulator that could, if approved, result in increases of between 36% and 44% next year.

"In this current environment it is not ideal to have exorbitant tariff [increases]," she said, confirming that the Cabinet committee had been given a brief to address South Africa's high cost of living.

Ahead of the May elections, President Cyril Ramaphosa indicated that government was investigating ways to cushion South Africans from the effects of rising food and fuel prices, including through making changes to the Basic Fuel Price formula.

In his Opening of Parliament address, he then confirmed that the Government of National Unity had agreed that tackling the high cost of living would be one of its key priorities, alongside efforts to grow the economy, increase job creation and reduce poverty.

Ntshavheni said that the Cabinet committee would seek to make recommendations on selected cost drivers individually and that it would, thus, finalise its work on fuel pricing before turning its attention to another area.

"I'm confident that when we are done with the focus on fuel, we will then also move to focus on electricity."

Her statement followed the released of the latest consumer price inflation print indicating that inflation had moderated to 4.6% in July, partly because of slowing food price inflation.

It also coincided with moves by some municipalities, opposition political parties and civil society organisation to resist any major electricity tariff hike, including a signature campaign launched by the Democratic Alliance.

Although Eskom and the National Transmission Company South Africa (NTCSA) are yet to make their formal submissions to the National Energy Regulator of South Africa (Nersa), it has been reported that they will be seeking allowable revenue of R446-billion for 2025/26, which would translate to a 36% hike for direct customers.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa has also expressed his unease with the impending Eskom submission, arguing that ongoing steep increases were not only unaffordable for poor households, but were also placing strain on the middle class and business.

While stressing Nersa's independence, Ramokgopa indicated that South Africa's electricity pricing policy should be reviewed and an alternative found to both setting tariffs and subsidising low-income households.

For its part, Nersa has indicated that no final submissions have been made by Eskom and the NTCSA, but that these will be published on its website once they are received and public hearings will be held thereafter.

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CFAO South Africa (SA) subsidiary Toyota Tsusho Africa, and Ogihara Thailand, have started construction of a new R1.2-billion plant that will produce vehicle body parts for Toyota South Africa Motors (TSAM).

The JV will be known as Ogihara SA, with the plant located in the Dube TradePort (DTP), in Durban.

TSAM will contribute R545-million to the new facility and the JV R630-million.

TSAM's vehicle assembly plant is located in Durban.

The new facility will localise the production of small and medium automotive stamped body parts that are currently being imported from abroad.

It is estimated the plant will require 25 000 t of locally procured steel a year.

Production is set to start in July next year.

The facility should boost TSAM's local procurement by an estimated R700-million a year.

Minister of Trade, Industry and Competition Parks Tau says the investment will increase the local content on the Hilux (the next-generation model), Fortuner and Corolla models assembled at the TSAM plant for the local and export markets.

He says the investment will create 250 new jobs, with a further 1 040 indirect jobs added through the value chain.

Tau adds that the economic relationship between South Africa and Japan is steadily growing, with roughly 130 Japanese companies invested in South Africa.

Ogihara Thailand is a subsidiary of Ogihara Corporation in Japan. It has manufactured automotive tools, dies and stamped parts for vehicle and truck manufacturers since 1990.

The Ogihara SA JV is an exciting first expansion into Africa, says Ogihara Thailand CEO Hiroshi Morita.

"This JV will further expand Toyota Tsusho Africa's service offering into the manufacturing environment, which is aligned to our strategy to promote local assembly and production in South Africa by partnering with foreign component manufacturers," notes Toyota Tsusho Africa MD Wayne Bowyer.

"The inclusion of Ogihara South Africa in our local manufacturing ecosystem will not only create new job opportunities, but also enhance our capabilities in producing high-quality body parts for the automotive industry," adds TSAM president and CEO Andrew Kirby.

"This joint venture marks a significant step towards TSAM's local-value-addition improvement strategy by localising the production of these critical components."

Ogihara SA's 32 000m site is located in DTP's TradeZone 2.

DTP says the new facility is the single largest investment it has secured since its inception alongside Durban's King Shaka International Airport.

Ogihara SA is the second automotive sector investor to set up in DTP after Mahindra SA commissioned its vehicle assembly facility in 2018.

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Energy and chemicals group Sasol has confirmed a yearlong extension, to June 2027, in its gas supply from southern Mozambique to South African industrial customers, which have been warning of a potential gas supply cliff as from next year.

However, the JSE-listed group has again reiterated its position that the amount of gas it can feasibly supply to industrial customers will diminish in line with the depletion of reserves and can be replaced only by the importation of more expensive liquefied natural gas (LNG).

Gas supply from southern Mozambique to Sasol's own facilities in Sasolburg and Secunda will continue until the mid-2030s, however, and the group has indicated previously that it was not commercially viable for these to be converted to LNG.

CEO Simon Baloyi told Engineering News in an interview that the extension of the supply "plateau" had been made possible by its recent success in securing gas from infill wells and he reported that additional work was under way to potentially extend the plateau even further.

Gas volumes from Mozambique increased by 6% to 120.8-billion standard cubic feet in the year to June 30, largely as a result of the early flow of gas from the production sharing agreement (PSA) initial gas facility.

"Progress in relation to the PSA will enable us to continue to supply natural gas and methane-rich gas to customers until the end of the 2027 financial year," Baloyi told shareholders during a results presentation.

Energy and chemicals marketing and sales executive VP Christian Herrmann added that there might be potential to extend supply until mid-2028, but that no investment decision had been made on those extension projects, which carried risks.

Herrmann indicated that a final investment decision could be made during the first half of 2025 but indicated that these projects were designed only to "serve as a bridge" to LNG imports and to provide time and space for the construction of LNG infrastructure, which was likely to take three to four years to build.

Baloyi told Engineering News that Sasol was also in active discussions with its 300-plus industrial customers to shore up the demand required for the construction of an LNG import terminal in Maputo.

He envisaged using the existing infrastructure to initially blend the LNG imports with Mozambique gas to ensure consistent supply until the gas from Mozambique had been fully depleted.

The transition would have significant price implications for users, however, with Baloyi estimating that the price of LNG would be three to five times the current regulated gas price in South Africa of between $3/GJ and $3.50/GJ.

He indicated that Sasol was keen to act as a market aggregator and expressed optimism that it plans could complement those being advanced by members of the Industrial Gas Users Association of Southern Africa, which has announced plans for a R10-billion-a-year gas-aggregator company.

"A critical factor for enabling LNG supply is securing confirmed demand, which will support the development of an LNG terminal and its associated infrastructure," Baloyi said.

He said it was crucial that decisions were made before the end of 2024 to facilitate the construction of the infrastructure required for importing LNG, noting that 175 000 jobs were directly dependent on there being an orderly transition from Mozambican gas to LNG.

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The latest edition of the South African Renewable Energy Grid Survey points to there being massive and growing interest from developers of solar PV, wind, battery and hybrid plants to connect to the South African grid.

Published jointly by Eskom Holdings' National Transmission Company South Africa (NTCSA), the South African Photovoltaic Industry Association and the South African Wind Energy Association, the survey shows there to be projects with a combined capacity of 133 GW at various stages of development across the country.

The result represents a dramatic increase from the 66 GW highlighted in the 2023 edition, and also reflects a steep rise in the number of contributions to the survey, from 209 last year to 483.

It also points to a rise, from 18 GW to 66 GW, in that category of projects (termed Type A by the survey compilers) at an advanced stage of development in that environmental records of decision have been secured, feasibility studies completed and where the potential exists for the plant to enter into commercial operation within three years.

Also highlighted in the 2024 edition is that while independent power producers (IPPs) continue to have a strong appetite for government's renewables and battery procurement programmes, with 45 GW being developed to satisfy demand emerging from public procurement, there is also a big increase in projects geared towards the private-offtaker market.

Projects with a combined capacity of 43 GW are being developed with an eye either to public or private procurement, while 28 GW is being advanced purely on the basis of private offtake.

From a technology perspective, solar PV dominates with more than 55 GW, followed by wind (28 GW), PV-battery projects (18 GW), wind-battery projects (15 GW), battery projects (6.4 GW), hybrid wind-PV plants (4.8 GW), hybrid wind-PV-battery plants (4.3 GW), concentrated solar power (100 MW) and hydropower (8 MW).

The Northern Cape remains the most attractive to developers with 29 GW of interest, followed by the Free State (20 GW), what NTCSA terms Hydra Central, which crosses provincial boundaries in the centre of the country (18 GW), North West (15 GW), Mpumalanga (11.6 GW), Limpopo (11 GW), Eastern Cape (8.8 GW) Gauteng (8.8 GW), Western Cape (7.5 GW) and KwaZulu-Natal (2.4 GW).

The NTCSA's Ronald Marais said that survey results were important in indicting where IPPs were interested in connecting to the grid and at what volumes and would be used by the NTCSA in updating the Transmission Development Plan (TDP).

The results reaffirmed the importance in investing heavily and at an accelerated pace on the main north-south and south-north backbone corridors, but also highlight the urgent need to invest in distribution and collector networks and substations.

"If we look at the capacity that wants to be connected to the grid, it's more than double the indicated capacity from last year's survey of 66 GW, which is a significant increase and gives us great insight to where capacity unlocking needs to be on the grid," Marais said.

He stressed, however, that it did not represent a grid allocation, with the capacity under development far larger than the demand being forecast in all modelling undertaken to date.

Interestingly, the survey also includes responses on what ancillary services could be provided, with 447 respondents indicating that their renewables or battery plants could provide such services, mainly in the form of reactive voltage supply and control and reserves.

An interactive dashboard of the 204 survey is available on the NTCSA website at: https://www.ntcsa.co.za/south-africa-renewable-energy-grid-and-survey/

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The Independent Power Producer Office (IPPO) has confirmed that 48 onshore wind and solar PV bids with a combined capacity of 10 218 MW have been submitted under Bid Window Seven (BW7) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The bids were submitted ahead of the August 15 deadline, which was postponed from an initial date of April 30, largely owing to grid-access-related delays.

South Africa is seeking to procure 5 000 MW during the public procurement round, comprising 3 200 MW of wind and 1 800 MW of solar PV.

The solar PV allocation is substantially oversubscribed, with a total of 40 projects submitted, representing a combined capacity of 8 526 MW.

However, only eight onshore wind projects with a combined capacity of 1 692 MW have been submitted, falling 1 508 MW short of the capacity allocated to the technology for the round.

Ahead of the deadline, the South African Wind Energy Association cautioned that the imbalances in the prevailing rules for allocating grid access between projects competing under the REIPPPP as opposed to projects proceeding on the back of private power purchase agreements posed a challenge to wind projects under BW7.

The association also warned that, unless an alternative grid-access solution was found, BW7 could fail in a similar way as was the case during BW6.

During that previous bid window, none of the 23 wind projects that bid for a 3 200 MW allocation was selected as a preferred bidder, as the necessary grid capacity had been absorbed by private projects that were subjected to different grid-access rules.

Ahead of the BW7 deadline, Eskom sought permission from the National Energy Regulator of South Africa (Nersa) to reserve grid capacity for the REIPPPP to avert a recurrence of the BW6 failure.

In its application it argued that "without any form of protection, public procurement programmes remain incapable of competing with the much more agile and well-funded private sector energy procurement programmes".

Nersa rejected the application, however, noting that Eskom had not identified the specific customers against which it intended discriminating, and also did not present objectively justifiable and identifiable differences regarding such customers, which were requirements for any approval for grid reservation.

Of the wind bids received, three are located in the Eastern Cape, two in the Western Cape, two in the Northern Cape and one in KwaZulu-Natal, with no bids made in grid-rich Mpumalanga despite various private wind projects advancing in the province.

The Free Sate has the highest number of solar PV bids with 20, followed by Limpopo (13), the North West (3), Mpumalanga (2) and the Northern Cape (2).

The IPPO will now evaluate the projects submitted under BW7 and it is anticipated that this process should be completed within three months of the bid submission deadline.

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa has withdrawn a Ministerial determination for the procurement of 2 500 MW of new nuclear capacity, which was being contested legally, having concluded that there was insufficient public consultation prior to the regulator providing its concurrence with the determination.

The withdrawal comes ahead of a scheduled court case initiated by the Southern African Faith Communities' Environment Institute (SAFCEI) and Earthlife Africa Johannesburg, which are contesting the legality of the gazetted Section 34 determination signed by Ramokgopa.

The matter was scheduled to be heard on October 15 and 16.

The two environmental groups argue that the determination is unlawful and unconstitutional, owing to various procedural irregularities, including a failure of the National Energy Regulator of South Africa (Nersa) to consult with the public before concurring with the determination.

In 2023, Nersa provided conditional concurrence with the determination, while outlining several suspensive conditions, including establishing, through a demand and generation profile analysis, the rationality of adding 2 500 MW of nuclear, and confirmation that engineering, procurement and construction contract principles would be used during the procurement phase.

The then Department of Mineral Resources and Energy (DMRE) subsequently submitted a report outlining how the suspensive conditions had been met, leading Nersa to provide its full concurrence, which resulted in Ramokgopa, who was Minister in the Presidency responsible for electricity at the time, gazetting the determination.

However, SAFCEI and Earthlife Africa Johannesburg lodged a legal objection stating that Nersa had failed to meet its obligation to subject the DMRE report to public consultation, and that its concurrence was, thus, illegal.

They also raised concerns that the determination was based on an outdated Integrated Resource Plan, or IRP 2019, which was not only in the process of being updated, but also had never included new nuclear capacity as part of the electricity generation mix for the 2030 planning horizon.

In announcing the withdrawal, the Minister acknowledged that any new determination should be in line with an updated IRP and promised that his ministry, which is in the process of been unbundled from the DMRE in line with the new portfolios announced as part of the Government of National Unity, was prioritising the update of the plan.

He again promised consultation with those stakeholders that had made "substantive" input on the draft IRP 2023 and also indicated that an expert body would be formed in parallel to assess the role of new nuclear in the future mix.

Nevertheless, Ramokgopa insisted that the government remained committed to procuring new nuclear capacity in line with its stated policy that such capacity be introduced at a pace and scale that the country could afford.

SAFCEI and Earthlife Africa welcomed the Minister's announcement, describing it as a positive outcome.

"We uphold that transparency in government decision-making is a cornerstone of our democracy," they said in a statement.

Engineering News editor Terence Creamer discusses some of the key outcomes of the first meeting between Cabinet member and business leaders since the formation of the Government of National Unity.