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National Transmission Company South Africa (NTCSA) interim CEO Segomoco Scheppers has confirmed that the newly operationalised entity is making an allowable revenue application to the regulator that is distinct from that of Eskom as it seeks to secure the finances it requires for its operations and to implement its ambitious roll-out of new grid infrastructure.

Speaking at an event co-hosted by the Powerline and Substation Association and the South African Independent Power Producer Association, Scheppers argued that the newly separated entity had to be placed on a sound financial footing by securing the revenue required to run, maintain and expand the network.

He confirmed that capital allocations to the transmission business had been reduced over a number of years, owing to Eskom's "severe" financial constraints and allowable-revenue allocations arising from regulatory determinations that were below that which had been requested.

To illustrate the nature of the shortfall, Scheppers highlighted the difference between its approved revenue of R44-billion for the financial years from 2018 to 2022, against its application to the National Energy Regulator of South Africa (Nersa) for R56-billion over the five-year period.

That transmission budget was then cut dramatically to only R19-billion after Eskom reprioritised its internal budgets to support its much-delayed and over-budget generation build programme and by the end of the period only R16-billion was actually spent on transmission.

"Clearly that had an impact in that we could not roll-out the infrastructure at the rate that we planned," Scheppers said.

The backlog in investment is now meant to be closed through a Transmission Development Plan to roll out 14 218 km of new powerlines, 170 transformers (105 865 MVA), alongside 40 capacitors (2 700 MVar) and 52 reactors (14 713 MVar), in a programme that could cost up to R400-billion.

NTCSA, which began trading as an independent entity under Eskom holdings on July 1, will now seek to secure dedicated revenue by making a separate allowable revenue application to Nersa, which is gearing up to begin adjudicating the next multiyear price determination.

It has been reported that Eskom will be seeking allowable revenue of R446-billion for 2025/26, the first year covered by the three-year application. If approved, this would translate into a tariff hike of more than 36% for direct customers from April 1 next year.

"Given that NTCSA has got a licence in its own right, we are expecting that Nersa will make a decision that relates to NTCSA … and we hope that the submission we have made will be able to stand up to scrutiny to justify the requirements that we are putting forward," he said, without providing specifics.

NTCSA's finances have been separated from those of Eskom, which is undergoing a restructuring programme to unbundle its generation, distribution and transmission businesses in line with a 2019 policy roadmap.

The entity has its own board and some 3 400 Eskom staff members have been transferred to the NTCSA.

Besides securing dedicated revenue, Scheppers said the entity's current strategy included the following key components:

Protecting the existing grid assets through ongoing maintenance and renewal;

Leveraging the existing assets to integrate additional renewables generation through mechanisms such as curtailment, the codification of which would be the subject of an upcoming Nersa hearing;

Accelerating the development of new transmission corridors;

Implementing measures to ensure grid stability as variable renewables penetration increased; and

Expediting two priority grid capacity programmes.

The two priority programmes include 25 transformer projects at existing substations to unlock 13 000 MW of new generation over the coming five years, and 22 "expedited projects" t...

Engineering News editor Terence Creamer discusses Electricity & Energy Minister Kgosientsho Raomokgopa's plans to review South Africa's electricity pricing policy and whether a sustainable outcome is possible.

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Steel producer ArcelorMittal South Africa (AMSA), which has been bemoaning weak domestic demand conditions for several years, reports that it is witnessing signs of "green shoots" in manufacturing and has also expressed cautious optimism over a potential for a recovery in energy-, construction- and automotive-related demand.

While reporting a 2% fall in volumes to 1.2-million tons in the first half of the year, as well as a material 10% slump in production to 1.2-million tons, largely owing to blast-furnace chilled hearth conditions at Vanderbijlpark in April and May, CEO Kobus Verster pointed to improving demand dynamics.

He attributed part of his optimism to the pro-business environment emerging under the Government of National Unity (GNU), but also pointed to several other market factors that he said held both short- and longer-term promise for steel consumption.

The prospect of an interest-rate reduction was highlighted as a key factor for stimulating future demand, alongside higher downstream steel fabrication that would be less constrained by the power disruptions that had crimped output in the real economy for more than a decade, but especially over the past three years when loadshedding intensified to an almost daily occurrence.

The National Treasury has estimated that about 35% of the growth slowdown from 2007 to 2021 can be attributed to the underperformance of network industries such as electricity and rail, with productivity shocks from these industries having significantly impacted the rest of the economy.

AMSA is expecting year-on-year growth in manufacturing of 1.2% on the back of more stable power supply and freight logistic services, while still pressing ahead with plans for a 200 MW solar PV plant in Vanderbijlpark and pursuing a deal with a private rail provider.

The JSE-listed group is also positioning itself for a more concerted localisation drive in energy, logistics and infrastructure under the GNU and following President Cyril Ramaphosa's signing of the Public Procurement Bill in July, which would enable government departments and State-owned companies to prescribed local content during procurement.

In his recent Budget Vote address, Trade, Industry and Competition Minister Parks Tau reported that he would be leaning on local procurement to create early-stage demand in targeted sectors and indicated that he would seek to leverage eight existing sector masterplans to stimulate demand, with a steel masterplan being one such plan.

AMSA had calculated that South Africa's transmission grid expansion programme alone could consume 450 000 t of structural steel between 2025 and 2032 and Verster also saw the company's collaboration with renewable-energy original equipment suppliers yielding benefit as they sought to drive localisation.

Transnet's R160-billion investment programme is also expected to be a source of demand, along with private sector participation investments in both rail and port operations.

"ArcelorMittal Rail and Structures is well positioned to support Transnet in rebuilding South Africa's rail network," Verster said.

PRIVATE RAIL?

However, AMSA is also in talks with a private rail operator to potentially replace Transnet Freight Rail as a service provider once the regulatory framework has been finalised for third-party access to the network.

While praising the new Transnet leadership for significant improvements in its service, Verster said it tariffs remained exorbitant and that the group was, thus, moving ahead with a plan to partner with an alternative supplier, which he refused to identify.

AMSA is also keeping an eye on the GNU's ambitions in the areas of water infrastructure, dams, pipelines, bridges and roads, which are likely to require private-sector support in light of government's weak fiscal position.

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Explosives and mining chemicals group AECI is moving to secure green ammonia for use in the production of lower-carbon explosives, demand for which is expected to grow in some of the mining jurisdictions the JSE-listed company is specifically targeting as part of an ambitious internationalisation strategy.

The company is at the early stages of implementing a far-reaching restructuring plan aimed at expanding and globalising its core explosives and mining chemicals units, while also disposing of its noncore chemicals businesses for potential proceeds of between R3-billion and R4-billion.

The restructuring is being pursued in a bid to double profitability to R6.4-billion by 2026, against earnings before interest, taxes, depreciation and amortisation of R3.2-billion reported in 2022, while attaining a top-three global-mining-market position by 2030.

CEO Holger Riemensperger tells Engineering News & Mining Weekly the market for so-called green explosives is being driven by a number of its mining customers, especially those located in Australia and Europe, which are prepared to pay an initial premium for low-carbon explosives.

That said, he believes green ammonia-based explosives will become cost competitive given that they will be produced using renewable electricity sources, the cost of which continues to decline.

Producing green ammonia requires green hydrogen made by splitting water into oxygen and hydrogen in an electrolyser using renewable electricity, as well as nitrogen separated from the air.

Demand for green explosives is also expected to grow in North America, where AECI is aiming to establish a foothold in the not-too-distant future through a combination of organic and acquisitive growth.

Riemensperger stressed, however, that acquisitions would be pursued more aggressively only once proceeds from the sale of businesses had been secured and the company's gearing had been reduced to about 30%.

AECI has signed a non-disclosure agreement with a partner in South Africa for the potential long-term supply of green ammonia from a project that is expected to be commissioned in 2027/28.

Riemensperger refused to be drawn on the identity of the partner or the location of the project, confirming only that AECI would not be making any upfront investments and had no intention of integrating backwardly into ammonia production.

The group was eager, nevertheless, to continue diversifying its sources of supply in South Africa through imports, as well as to begin integrating green ammonia into its supply chains.

He described the green ammonia project as being at an early stage and said the developers were keen to conclude significant offtake agreements to help improve the project's commercial prospects of proceeding.

Meanwhile, the internationalisation of AECI was starting to gain momentum, underpinned by a desire to align the business geographically with those countries poised to be large producers of critical minerals such as copper, lithium, cobalt and nickel.

These markets included Argentina, Australia, Chile, Cuba, the Democratic Republic of Congo, Indonesia, Peru and the group's home market of South Africa, where it was the market leader but where demand was weak.

AECI was also following customer demand in the rest of Africa, South America, North America, the Asia Pacific region and Europe, where it is ramping up a repurposed Wolfenbüttel plant to produce mining chemicals.

To support the growth into new markets, the group also recently appointed Stuart Miller, who will take up the role of executive VP for mining in mid-September, having previously worked for explosive group Orica.

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Cape Town's Golden Arrow Bus Services (GABS) has signed a deal to acquire 120 electric buses from Chinese automotive powerhouse BYD, following four years of testing.

Delivery of the 65-seater units is scheduled to start late this year, with all the buses expected to be operational before December next year.

The plan is to introduce ten buses a month during 2025, says GABS company engineer Gideon Neethling.

The people carriers are BYD B12 buses, with similar specifications to the bulk of the current Golden Arrow fleet.

The 12.5-m-long electric buses are all equipped with lithium iron phosphate batteries.

GABS CEO Francois Meyer says the order marks a turning point in the 163-year-old company's trajectory.

"This bulk order confirms our commitment to renewable energy and will also provide us with the larger scale operational data that could pave the way towards full fleet electrification."

"We are intensively preparing our workforce and infrastructure to operate a system with complex requirements," adds Neethling.

GABS started testing BYD electric buses in 2020, introducing two buses to its commuter service in 2021.

A third and a fourth bus entered testing in 2022 and 2023, respectively.

Neethling tells Engineering News Online that he cannot share the cost of the BYD deal, noting only that it is financed through South Africa's commercial banks.

He says the buses will be imported in full, with no local content. However, he notes that GABS aims to work with a local bus body builder to develop a South African body to fit on the imported electric chassis "in the future".

Neethling says GABS opted for the BYD product as the auto maker is a global market leader "with a really good track record" with electric vehicles and battery development.

"The buses are also energy efficient and they come at a reasonable capital cost."

The range on the buses are just over 200 km, says Neethling.

"That will give us the opportunity to travel up to 400 km per day given a planned mid-day charging opportunity.

"The buses will operate from five of our depots, allowing us to collect bulk operational data and feedback from our passengers for most of our routes."

Neethling says there will be two charging opportunities a day - one between the daily peaks and one during night-time parking.

GABS has a total bus fleet of 1 200 buses, which means the BYD order electrifies close to 10% of its fleet.

Neethling says the bus operator has not yet decided if it wants a 100% electric fleet.

"The introduction of these buses will allow us to determine the operational and charging challenges when operating 120 electric buses.

"We will use the results to determine what portion of our fleet should be electric buses, and adjust our fleet renewal programme accordingly."

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Pretoria-based importer and distributor of battery electric vehicles (EVs), Enviro Automotive, has launched the Dayun Yuehu S5 mini sports-utility vehicle (SUV) in South Africa.

The 3.6-m S5 is priced under R400 000, with Enviro Automotive targeting city dwellers and environmentally conscious individuals as the most likely buyers.

Dayun, founded in China, initially focused on motorcycles and commercial vehicles before venturing into electric cars.

The company launched the Dayun Yuehu S5 in 2017.

Enviro Automotive says the vehicle has since been marketed under different names in more than 20 countries in North and South America, Europe, Asia, the Middle East and Africa, selling more than 35 000 units.

"We are thrilled to introduce the Dayun Yuehu S5 to our EV product line-up, as it appeals to a broader group of customers seeking affordable EV options," says Enviro Automotive MD Gideon Wolvaardt.

The local Dayun Yuehu S5 SUV line-up includes two five-door models - the Standard and VIP.

All vehicles feature a front-mounted 35 kW synchronous permanent magnet AC electric motor, delivering 105 Nm peak torque.

Top speed is 100 km/h.

The vehicle has a 31.7 kWh ternary lithium-ion battery with a 330 km range.

It supports Level 2 AC and DC charging, which allows for home charging or quick recharges at DC fast-charging stations.

The vehicle consumes 10.7 kWh per 100 km.

With a standard 220 V charge, it takes about four hours to recharge, says Enviro Aurtomotive. Using a DC fast charger, recharging from 20% to 80% should take under an hour.

Features include driver and passenger airbags, antilock braking, electronic brake-force distribution, brake assist, traction control, hill-start assist, slope-descent control, automatic cruise control, electronic power steering, an air-conditioner with climate control, electrically adjustable front seats and electric windows.

Also included are automatic headlights, a rearview camera with reverse assistance, a tyre pressure monitoring system, a keyless start system, central locking, a seven-inch infotainment screen and an eight-inch central control screen.

The S5 VIP model adds four ultrasonic radars in the front and rear, LED daytime running lights, turn-assist lights and front fog lamps.

The model also offers a SmartLink APP, which remotely controls car locking and unlocking, the windows, and the air-conditioner, while it also enables the vehicle to start without entry.

The app also has an electronic fence feature, which alerts the owner when the vehicle travels outside a set area.

"The Dayun Yuehu S5 is perfect for daily urban commutes, navigating congested city streets and fitting into tight parking spots," says Wolvaardt.

Pricing starts at R399 999.

Included is a three-year/60 000 km warranty and service plan with roadside assistance included. The battery warranty is five years/120 000 km.

Service intervals are every 12 months, or 20 000 km.

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Electricity and Energy Minister Dr Kgosientsho Ramokgopa reports that a review of South Africa's electricity pricing policy will be launched with the aim of addressing a rising affordability "crisis", which is undermining electricity access for a growing number of poor consumers.

The review would be undertaken in consultation with the South African Local Government Association, Eskom, the National Energy Regulator of South Africa (Nersa) and other stakeholders, and could have far-reaching implications for the way electricity tariffs are set and how low-income households are subsidised.

The Minister was speaking against the backdrop of protests in Johannesburg following the introduction of a R200 monthly surcharge on pre-paid customers to cover City Power's network costs, as well as the implementation of load-reduction measures in areas where substations were at risk because of overloading caused by illegal connections.

Poor communities, Ramokgopa said during a briefing, were increasingly unable to afford steeply rising electricity tariffs, while the support being provided through the monthly 50 kWh free basic electricity (FBE) allowance was both inadequate and failing to reach most of the indigent households for which it was intended.

Of the ten-million households eligible for the subsidy, only two-million were currently receiving the benefits, even when money was being transferred to municipalities to cover their FBE costs.

The 'tariff policy review' would include six components, including:

transparency of the unbundled tariffs for Eskom Distribution and the National Transmission Company South Africa;

an assessment on how the electricity subsidy framework should evolve within a changing market structure;

establishing a pricing framework for microgrids;

a review of the FBE policy,

an assessment of distributed generation within the context of electricity distribution industry reform; and

a review of the tariff setting methodology.

Ramokgopa emphasised the central role of Nersa in finding a solution that would strike a balance between affordability, particularly for poor households, and a transition to cost-reflective tariffs for other participants.

No mention was made of the fact that Nersa's most recent attempt at overhauling the prevailing multiyear price determination (MYPD) methodology for setting tariffs was abandoned on concerns over implementation.

In fact, the Energy Regulator recently rescinded its approval of the so-called Electricity Price Determination Methodology Rules after a reassessment of the practicality of implementing the rules, which were not accompanied by a clear formula for calculating tariffs.

Therefore, Eskom's next tariff application will be made using the MYPD methodology for allowable revenue of R446-billion for 2025/26, which would translate into a hike of more than 36% if approved.

"The review of the Energy Pricing Policy is imperative for setting a clear pricing policy for the industry and for Nersa to implement," Ramokgopa argued.

Engineering News editor Terence Creamer discusses the findings of a report, released by the Presidential Climate Commission, warning that South Africa may not meet its 2030 decarbonisation target; what this would mean for the country; and whether the new Climate Change Act could assist in helping to close the potential gap.

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California-based Vayu Robotics this week announced the real-world deployment of an autonomous on-road delivery robot.

The robot, combining AI models with low-cost sensing, is being rolled out in the US with an e-commerce customer, in a move to slash the cost of e-commerce deliveries.

Vayu Robotics is venture-backed, with a team that previously worked at Lyft, Apple, Google and Facebook, and with experience working in autonomous technology programmes.

Consumers in the US increasingly rely on e-commerce platforms to deliver groceries, electronics, apparel and more, explains the company.

While the number of deliveries is skyrocketing - by 2027, 23% of American retail purchases are expected to take place online - cost per delivery remains high.

The company notes that traditional mobile robotics rely on costly light detection and ranging (lidar) sensors and software modules built to do one task at a time, leading to expensive hardware and fragile software unable to handle new scenarios.

"Vayu's robot does the opposite. The company has combined a transformer-based mobility foundation model with a powerful passive sensor that, working together, eliminate the need for lidar.

"As a result, Vayu's delivery robot operates autonomously without pre-mapping the roads it intends to drive on, and is capable of navigating inside stores, on city streets, and unloading packages on driveways or porches, carrying up to 100 lbs [45 kg] at under 20 mph [32 km/h]."

Vayu was co-founded by Anand Gopalan, the CEO who took lidar supplier Velodyne public in 2020, as well as Mahesh Krishnamurthi and Nitish Srivastava, both from Apple's Special Projects Group.

The trio says they realised that large-volume robotics applications, like robotics delivery, could only be unlocked by inventing a new technology stack that involved lower cost hardware and more robust software.

"The unique set of technologies we have developed at Vayu have allowed us to solve problems that have plagued delivery robots over the past decade, and to finally create a solution that can actually be deployed at scale, enabling the cheap transport of goods everywhere," says CEO Gopalan.

Vayu's delivery robots are already being debuted in real-world applications.

The company has signed a commercial agreement with a large e-commerce player to deploy 2 500 robots to enable ultrafast goods delivery, with similar commercial customers in the pipeline.

The team is also working with a global robotics manufacturer to replace lidar sensors with Vayu's sensing technology for other robotic applications.

"Our software is robot form factor agnostic, and we have already deployed it across several wheeled form factors," adds Gopalan.

"In the near future, Vayu's software technology will also enable the movement of quadrupedal and bipedal robots, allowing us to expand into those markets as well."

Looking ahead, Vayu's founders believe their "revolutionary low-cost robotics nervous system" can power a new wave of mobile robots in other use cases, too.

"Autonomous delivery robots are only the tip of the iceberg," says Gopalan.

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The Presidential Climate Commission (PCC) is cautioning that South Africa may miss its 2030 decarbonisation target in light of a decision to further delay the decommissioning of three aged coal power stations and if new clean sources are not introduced in line with the country's electricity generation roadmap.

The warning is contained in the commission's inaugural 'South African State of Climate Action' report, released on July 25.

Ahead of COP26 in Glasgow in 2021, South Africa lodged a new Nationally Determined Contribution (NDC) outlining a goal of reducing its CO2-equivalent (CO2-eq) emissions to between 420-million and 350-million CO2-eq tons in 2030, an improvement on its previous NDC range of between 398-million and 510-million CO2-eq tons.

That commitment helped South Africa secure initial pledges of $8.5-billion for its Just Energy Transition Investment Plan and these pledges have since increased to $11.5-billion.

The PCC report quotes government's draft Sectoral Emissions Target Report, which states that South Africa is on track to meet its 2025 NDC target and that the 350-million CO2-eq tons target could be achieved with more ambitious actions in the electricity and transport sectors. The 350-million CO2-eq tons is said to align with South Africa's contribution to limiting global warming to 1.5 °C, a target that appears to be increasingly difficult to achieve.

The report goes on to caution, however, that if key policies - such as the 2019 Integrated Resource Plan with its prescribed electricity build and decommissioning plans - are not achieved, the 2030 target in the NDC may not be met.

"This is pertinent given Eskom's recent decision to further delay the decommissioning of three of its oldest coal-fired power plants, Camden, Grootvlei and Hendrina."

Newly appointed Forestry, Fisheries and the Environment Minister Dr Dion George has promised wide consultation on South Africa's next NDC, which will have to take account of Eskom's successful appeal of the National Air Quality Officer's October 2023 decision requiring the State-owned enterprise's coal stations to comply with minimum emission standards.

Eskom said the decision would exacerbate loadshedding by leading to the shutting of 30 000 MW of capacity, as the cost of retrofitting the plants to meet air-pollution limits would be a prohibitive R300-billion.

The PCC report also points to an ongoing "mismatch between commitments and action", noting that South Africa's strong climate policy and just transition commitments are not reflected in practical outcomes.

Only 28 of the 95 actions outlined by the National Climate Change Adaptation Strategy are listed as fully implemented or currently being implemented, the PCC notes.

The reports states that there are contradictory public policies and positions, particularly regarding the future of the energy sector.

"The lack of consensus about the pace of the coal phaseout is delaying the implementation of necessary policy measures to prepare for and enable the transition, such as the draft 2023 Integrated Resources Plan, the Integrated Energy Plan, and the South African Renewable Energy Masterplan."

The report's release came only days after President Cyril Ramaphosa signed the Climate Change Bill, which sets a legal mandate for South Africa's national climate reponse and institutionalises the role of the PCC.