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All the suspensive conditions opening the way for the National Transmission Company of South Africa (NTCSA) to be constituted as a separate, distinct and wholly-owned subsidiary of Eskom Holdings have been met, Public Enterprises Minister Pravin Gordhan and Eskom chairperson Mteto Nyati have announced in a joint statement.

Still outstanding, however, is the fulfilment of Companies Act requirements, which meant that the April deadline for the full operationalisation of the NTCSA had been missed. It is anticipated that the NTCSA will commence trading about two months after the fulfilment of these requirements.

The suspensive conditions that have been met include consent from relevant lenders and creditors, the passing of resolutions by the government and the boards of NTCSA and Eskom, as well as the approvals for electricity licences and other regulatory requirements by the National Energy Regulator of South Africa.

"The satisfaction of all the suspensive conditions for the merger agreement between Eskom Holdings and the NTCSA signifies a key development in the government's pursuit of a restructured, competitive and dynamic electricity market that will usher in a secure and reliable energy future for South Africans," Gordhan said, while Nyati described the development as a significant milestone in Eskom's turnaround plan.

"The separation of the transmission division from Eskom will now set the NTCSA on the path for operationalisation once the necessary statutory requirements as per the Companies Act have been concluded," Nyati added.

The legal separation of Eskom into three entities, namely generation, distribution and transmission, was outlined in the Department of Public Enterprises' 2019 'Roadmap for Eskom in a reformed electricity supply industry' and is also in line with legislative reforms being introduce through amendments to the Electricity Regulation Act, which was passed by the National Assembly last month.

Gordhan also appointed the inaugural NTCSA board on January 9.

In their statement, Gordhan and Nyati argued that the legal separation of NTCSA would improve business performance, increase lender appetite, and bolster confidence among independent power producers that they would receive fair treatment.

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Heavy equipment manufacturer Bell Equipment has been growing its business organically by investing in the development and enhancement of products, increasing market share in key regions, such as the Middle East, and growing the Bell Heavy Industries (BHI) contract manufacturing business.

Bell Equipment CEO Ashley Bell tells Engineering News that the company has initiated discussions with potential customers to help stimulate the South African manufacturing sector through contract manufacturing.

Bell envisions providing contract manufacturing services to the construction, energy, mining and transport sectors.

He adds that the BHI initiative is still in its early stages, with systems and processes being put in place to deal with third-party clientele, but Bell is confident it will gain further traction over the remainder of the year.

Responding to whether the company's existing manufacturing facilities will need to be expanded to accommodate for contract manufacturing, as well as new products that Bell Equipment will be manufacturing from 2025, Bell says the legacy plant it has in Richards Bay has the capability to accommodate the additional manufacturing, particularly as the company pursues a greater level of articulated dump truck (ADT) manufacturing at its German factory.

The company is also adequately staffed with manufacturing experts that can take on third-party manufacturing projects.

Bell Equipment aims to manufacture its northern hemisphere-bound ADTs closer to suppliers and markets, which leaves room in the South African facility for other types of manufacturing.

Among the new products that Bell Equipment will be manufacturing from 2025 are a Bell Motor Grader and a Timber Processing Head.

The Motor Grader has been in development for four years and will take its place alongside the reputable Bell Equipment ADT line in the local and global market. Bell says extensive testing on the machine has ensured it has the durability and reliability that are expected from Bell Equipment.

The Bell Motor Grader marks a significant step forward in the company's strategy to grow its own range of manufactured products for the global construction and mining industries, particularly as many graders in the market have been found to be insufficient and prone to failure.

The grader has been designed with varying emission regulations in international markets in mind, as well as different types of operator controls. It is engineered to operate in the most challenging and harsh environmental conditions and includes a range of features to help improve productivity, maintain costs and deliver work efficiently.

In turn, the Timber Processing Head will complement the company's range of equipment on offer for the forestry and agriculture industries.

Bell says this product is distinguished owing to its catering for mechanised harvesting operations, compared with traditional manual harvesting type systems.

The Bell Equipment Timber Processing Head will be the first of its kind to be designed and manufactured in South Africa.

To further improve its offering to the timber and agriculture industries, Bell Equipment has been appointing a number of independent dealers for its forestry and agriculture business across South Africa, in addition to its own-managed branches and mining- and construction-focused independent dealers.

Moreover, Bell Equipment is also undertaking research and development on different technologies for cleaner propulsion, including alternative fuel.

Bell explains that many companies are going through a learning process on what would be the most suitable alternatives for construction equipment, particularly large machines.

Some of the options the company is looking into are hydrogen and battery electric-powered drivetrains for machines, but no commercial solutions are in devel...

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Business Leadership South Africa (BLSA), whose members include the largest domestic and foreign companies operating in South Africa, has added its voice to a growing chorus of opposition to the draft Integrated Resource Plan 2023 (IRP 2023) and has called for it to be "revised immediately".

Writing in her weekly newsletter, CEO Busisiwe Mavuso said no good case had been built for the assumptions in the IRP 2023 and warned that the document was "tainting" the positive news associated with reduced levels of loadshedding, which she attributed to the Energy Action Plan and the collaboration between government and business.

"The first, overarching problem, is that it goes against the least-cost principle and presents some spurious costing estimates that appear to elevate the price of renewable energy and underestimate the cost of fossil fuels.

"Then it slashes the amount of renewable energy - still easily the cheapest form of new energy generation - to be installed between 2024 and 2030 via public procurement from 15.2 GW in IRP 2019 to 8 GW in IRP 2023.

"The huge increase in the allocation to gas is also eyebrow-raising - it allocates 7.22 GW to gas-based generation, up from 3 GW in the IRP 2019," Mavuso writes, while noting an absence of the infrastructure required for the importation of gas.

Also questioned is the IRP 2023's assumption of a delayed coal shutdown, which failed to take account of the extension costs, and the market reality that "funding for new fossil fuel ventures does not exist".

The document's misalignment with domestic climate policy is also highlighted, along with the threat posed to business by the imminent implementation of carbon taxes.

Mavuso said the 900 MW yearly allocation in the IRP 2023 for rooftop solar was an underestimate in light of the fact that far higher levels of deployment were already being achieved. While the low future demand trajectory assumed "puts the entire modelling process at risk".

"The bottom line is that we need electricity that is affordable, reliable and can come onstream quickly.

"Anything that goes against that doesn't make sense and the IRP needs to be reworked to facilitate this - it's an imperative to enable economic growth and boost employment," Mavuso wrote.

She also referred to the document as but one example of bad policy, mitigating against economic growth and employment creation.

"To get to the point where the economy is growing fast enough to create jobs at a significant rate, all the dysfunctional elements need to be remedied," she added, highlighting transport and logistics, water, infrastructure, poor service delivery, State company inefficiency and ongoing corruption as key concerns for business.

"Opposition within government to reforms slows everything down at best or results in failure," she added.

BLSA's input on the IRP 2023 follows on from the March 23 deadline for public comment on the draft document, which was published in early January.

In the run up to the deadline, several business and civil society organisations also strongly criticised the document and appealed for it to be overhauled.

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The Department of Mineral Resources and Energy (DMRE) has launched South Africa's third public procurement round for utility-scale batteries, while also extending the bid submission deadline for Bid Window Two (BW2) of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) launched in December, and naming a fifth preferred bidder from BW1.

In a statement, the department said the BESIPPPP BW3 request for proposals was seeking bidders for 616 MW/2 464 MWh of battery projects by July 31 for five pre-selected substation sites.

The sites, which have been identified by Eskom, are all located in the Free State and include the Harvard, Leander, Theseus, Everest, and Merapi substations.

The DMRE also confirmed an extension to the bid submission date for BESIPPPP BW2 from April 30 to June 6, having previously announced a similar extension for BW7 of the Renewable Energy Independent Power Producer Procurement Programme from April 30 to May 30.

The extensions, the DMRE indicated, were granted so as to align with the new timelines granted for application for cost estimate letters from Eskom for grid connection, as well as requests from potential bidders.

Meanwhile, the department also announced the appointment of a fifth preferred bidder for BESIPPPP BW1, having selected the other four on November 30, following the inaugural public procurement round for battery storage for 513 MW/2 025 MWh launched in March last year.

Following "value for money" negotiations, the DMRE reported that AGV Projects had been selected to build the 153 MW Red Sands battery energy storage project at the Garona substation, one of five Northern Cape substations sites identified for the round by Eskom.

The Red Sands battery energy storage project had an investment value of R6.4-billion and a bid evaluation price of R16.5-billion, or R546/MWh cost.

The other four projects had a combined investment value of R10-billion and a combined capacity of 360 MW/1 440 MWh.

They included the 77 MW apiece Oasis Aggeneis and Oasis Mookodi projects, the 103 MW Oasis Nieuwehoop, all being developed by consortia led by EDF, as well as the 103 MW Mogobe battery energy storage project, being developed by a Scatec-led consortium.

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Cabinet approved the publication of the long-awaited Gas Master Plan for public comment during what was the last formal meeting of the executive ahead of the May 29 election. However, Minister in The Presidency Khumbudzo Ntshavheni indicated that special Cabinet meetings could still be convened should the need arise.

The master plan, Ntshavheni said, was supportive of government's commitment to diversifying the country's energy mix away from coal-fired power plants.

She added that the document would be used as a policy instrument to guide gas investment in the country, which currently imports gas through a pipeline from southern Mozambique, from fields where production is set to taper before the end of the decade.

"The master plan will enable a natural gas economy that is favourable to investors and can provide an alternative source of energy for the country's electricity sector."

The Gas Master Plan has been published amid warnings of a "gas cliff" for industrial consumers in Gauteng and KwaZulu-Natal from mid-2026, at which date Sasol will divert the remaining gas imports from its wells in Mozambique towards its own facilities in Secunda and Sasolburg to help reduce its use of coal and, thus, its carbon emissions.

Several industrial consumers have accepted the need to switch to far more expensive imported liquefied natural gas (LNG), but are warning of a timing mismatch between Sasol's deadline and the prospect of constructing the import and regasification infrastructure required for LNG.

They have also indicated that their combined 50 PJ/y demand is insufficient on its own to trigger the construction of a terminal in Maputo and the associated pipeline infrastructure that will be required. They are therefore calling for firm commitments to be made from South Africa's nascent gas-to-power (GtP) industry to provide the demand underpin required.

However, critics are cautioning against South Africa making commitments to operate the GtP plants at high capacity factors, arguing that such a move could result in elevated electricity prices for decades.

Mineral Resources and Energy Minister Gwede Mantashe recently acknowledged these growing security of supply concerns and confirmed that a task team had been set up together with the Department of Trade, Industry and Competition to work with industry on possible solutions.

At the same time, he reported that his department had completed all the modelling and drafting work required for the release of the Gas Master Plan.

Ntshavheni was unable to confirm whether public hearings on the plan would be held, saying only that the Department of Mineral Resources and Energy would manage the process and that public comments would be considered before the final plan was approved.

Engineering News editor Terence Creamer discusses the key reforms being pursued across the rail and ports sectors; the recent publication of a rail network statement and the subsequent concerns raised; and Transnet's owns recovery plan.

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Energy group bp Southern Africa (bpSA) has set the expansion of its service station network in South Africa as a key priority as it moves to mark its centenary in a country where it first began operating on May 9, 1924.

Communications and external affairs head Hamlet Morule tells Engineering News that bpSA intends rolling out 15 new sites during 2024, with ten sites currently in development, followed by a further 11 in 2025.

Between R20-million and R25-million will be invested to build the new service stations, with the final price-tag dependent on the size of the site and its location, with far-flung sites generally costing more owing to the absence of readily available municipal services and access roads.

The company already has more than 500 stations nationally and is now pursuing sites primarily on South Africa's major highways, as well as in high-growth urban nodes.

Some of the sites will be developed by bpSA itself, while others will be dealer owned in line with its hybrid ownership model in South Africa.

Morule says that, in parallel, the group will be piloting the roll-out of solar photovoltaic (PV) installations, to enable stations to begin transitioning away from their current reliance on diesel generators for backup power during loadshedding and other outages.

Four sites have been selected for a solar PV pilot, which will kick off soon, including sites in Cape Town and Durban, as well as two in Johannesburg.

"Once the pilot is successfully completed, we will roll out to all bpSA-owned sites," Morule says, indicating that the deployment is also in line with the multinational group's commitment to transitioning towards net-zero by 2050.

Power purchase agreements will be signed with solar service providers, which will install, operate, and maintain grid-tied hybrid facilities over agreed time horizons.

In the rest of the world the multinational is investing heavily in the roll-out of electric vehicle (EV) charging infrastructure at its retail sites, but Morule says that is not an immediate priority in South Africa, where EV penetration remains low.

All the new sites will include convenience stores that will house bpSA's own Wild Bean Café brand, as well as its current partner brands of Pick n Pay, Nedbank Greenback, SA Taxi, Discovery Insure and Vodacom.

Morule says the group will also use its centenary to reinforce its commitment to Southern Africa, which some questioned when the mothballed Sapref refinery, which bpSA owns jointly with Shell, was put up for sale a few years ago.

The sale process to the State-owned Central Energy Fund was disrupted by the April 2022 floods in KwaZulu-Natal, which caused major damage at the refinery, but a future disposal has not been discounted.

The group's role in the region was also questioned after bpSA announced in 2023 that it had decided to exit all its aviation-fuel activities in South Africa, after the Airports Company South Africa entered into contracts with alternative domestic suppliers.

Besides its retail business, bpSA remains a shareholder in black-empowered Masana Petroleum Solutions, which is focused on supplying fuels to large South African businesses and it also owns Castrol, which supplies lubricants across the region.

The company employs 556 people, 56% of whom are women.

"We've had a long history in South Africa and have a long-term vision to grow our retail business and to continue supplying fuels and lubricants, while transitioning from being an oil group to playing a role in the energy transition," Morule says.

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Despite record renewable-energy installations of 473 GW last year, the International Renewable Energy Agency (Irena) says the pace of deployment remains well below that needed to match the global goal of tripling capacity by 2030. In addition, the geographic distribution of new investment was highly uneven, with Africa lagging in particular.

The 'Renewable Capacity Statistics 2024' report states that the installed renewables base climbed 13.9% to 3 870 GW in 2023, underpinned by solar photovoltaic (PV) installations, which surged by 32.2%, or 346 GW.

Together with wind, solar PV accounted for 98% of the new renewables capacity installed last year, with hydro accounting for the bulk of the balance.

"This growth in wind and solar led to the highest annual increase in renewable generating capacity as well as the highest growth on record in percentage terms," Irena said, adding that renewables accounted for 86% of all capacity additions last year.

Renewables' share of total power capacity also rose by almost three percentage points from 40.4% in 2022 to 43.2% in 2023.

A total of 326 GW, or 69%, of the new renewables capacity was added in Asia, underpinned by China, whose capacity increased by 63% to reach 297.6 GW.

All other regions also experienced growth, with Europe and North America installing 71.2 GW and 34.9 GW apiece, with growth rates of 10% and 7% respectively.

Africa also continued to grow, by at a more modest pace of 4.6%, adding 2.7 GW last year, reflecting what Irena director-general Francesco La Camera described as a "decarbonisation divide".

Irena also stressed that far more still needs to be done to achieve the goal adopted at COP28 to triple installed renewable power capacity by 2030 to reach 11 TW.

"Policy interventions and a global course-correction are urgently needed to effectively overcome structural barriers and create local value in emerging market and developing economies, many of which are still left behind in this progress.

"The patterns of concentration in both geography and technology threaten to intensify the decarbonisation divide and pose a significant risk to achieving the tripling target," La Camera said.

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The South African Photovoltaic Industry Association (SAPVIA) questions both the cost assumptions used for the technology in the draft Integrated Resource Plan 2023 (IRP 2023), as well as the 900 MW yearly build limit placed on distributed solar in its formal submission to the department.

SAPVIA's response, which was submitted ahead of the March 23 deadline for public comments, states that the technology cost assumptions for solar PV have been inaccurately estimated for Horizon 1 to 2030 (The draff IRP 2023 also includes Horizon 2 from 2030 to 2050).

The association, which has more than 800 members from across the solar value chain, also argues that the input cost assumptions for all renewable energy generation technologies appear higher than international benchmarks.

"Resultantly, the modelling outcomes in Horizon 1 contain less renewable generation capacity compared to the previous IRP iterations and less than benchmark studies and comparative modelling," SAPVIA states, arguing that these assumptions should be amended to reflect costs associated with public and private projects already procured domestically.

The absence of technology learning rates and cost decreases is also highlighted, including expected significant cost decreases for battery storage.

SAPVIA, thus, recommends, that the department undertakes revised modelling with updated technology costing to develop a least-cost reference case against which later policy adjustments can be made.

The organisation has also urged the Department of Mineral Resources and Energy to clarify the rationale for placing a 900 MW yearly build limit on distributed solar, describing the rationale for the limit as "unclear".

It highlights that the 900 MW constraint does not reflect Eskom data showing that 2 352 MW of private solar PV was installed from February 2023 to February 2024. Likewise, it does not align with the 384 solar PV project registrations with the regulator last year for a total capacity of 2 738 MW, or the SAPVIA Installed Capacity Dashboard, which recorded additions of 1 203 MW in the first quarter of 2023 alone.

CEO Dr Rethabile Melamu notes that there is already a mismatch between the prevailing IRP 2019 and solar PV installation rates and that there is likely to be even greater divergence should the draft IRP 2023 become the official plan.

While SAPVIA supports the splitting of the IRP into two horizon's, it highlights that Horizon 1 does not adequately address loadshedding, which should be a primary objective.

"The updated IRP 2023 must indicate a stronger urgency towards energy security and a firm plan to eliminate loadshedding in Horizon 1."

The comment document also points to a misalignment between the draft IRP 2023 and other government policy and recent industry development, including reforms under way in the electricity supply industry (ESI).

SAPVIA argues that, for effective implementation, the IRP should be calibrated with other policies, including the National Development Plan, Eskom's Transmission Development Plan, the South African Renewable Energy Masterplan and the Electric Vehicles White Paper, as well as new electricity and climate legislation.

"Alignment between the IRP and the changing ESI landscape brought about by market reform in South Africa is crucial for policy certainty.

"Both are key enabling factors for private sector participation in the generation and, eventually, in the transmission and distribution industries," SAPVIA argues.

Melamu indicates that SAPVIA is ready to collaborate with government in finalising the IRP 2023 either through additional consultations, or through structures such as the National Economic Development and Labour Council.

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Electricity Minister Kgosientsho Ramokgopa reports that Eskom's eight "lender groups" have given their consent to the establishment of the National Transmission Company South Africa (NTCSA) as a separate subsidiary under Eskom Holdings.

Bondholder consent was one of several key approvals required ahead of the operationalisation of the NTCSA, officially scheduled for April 1, alongside the appointment of an independent board and licensing approvals from the regulator.

Ramokgopa did not name the lender groups during a briefing on March 25, saying only that the eighth and final letter of consent was provided "last week".

In February, the National Energy Regulator of South Africa (Nersa) officially published the three licences required for the operationalisation of the NTCSA, having approved their transfer from Eskom in 2023. And, Public Enterprises Minister Pravin Gordhan appointed the inaugural NTCSA board on January 9.

In March, South Africa's Energy Regulator also consented to the transfer of powers and duties relating to power purchase agreements with independent power producers from Eskom to the NTCSA. Nersa said in a statement that NTCSA's trading licence would be amended to reflect the change.

These regulatory decisions align with an application made to Nersa by Eskom, which is unbundling its generation, transmission, and distribution businesses in line with the 'Roadmap for Eskom in a reformed electricity supply industry' published by the Department of Public Enterprises in 2019.

While being advanced under the existing Electricity Regulation Act (ERA), they also accord with some of the architectural changes outlined in amendments to the ERA, which were approved by the National Assembly on March 14.

The legislation will now serve before the National Council of Provinces, whose approval is also required before it can be signed into law by the President.

While opposition lawmakers have raised some concerns with the amendments, particularly with regard to the discretionary powers extended to the Energy Minister and with the future role envisaged for Nersa in setting prices and tariffs, Ramokgopa argued that the legislation would "remake the South Africa energy landscape".

"One of the primary interventions [of the legislation] is to make it easier to produce and sell electricity in South Africa.

"In order to do this, it established what the Bill refers to as a Transmission System Operator (TSO), which is managed by a newly formed entity that is wholly owned by Eskom and by extension wholly owned by the South African public, the NTCSA," Ramokgopa explained.

He said the TSO would ensure that all electricity producers were treated "equally and fairly and be allowed access to the national grid on a non-discriminatory basis".

Secondly, the legislation enables a "market platform" through which electricity can be bought and sold by multiple participants.

Describing the legislation as a "democratisation" of the sector, Ramokgopa also forecast that the new framework would, over time, help reduce prices through competition and innovation, improve reliability by boosting investment in supply, and introduce consumer choice.