State's nuclear plan takes off

The long-awaited procurement of nuclear power stations will kick off on 30 September, when the government issues the formal request for proposals, Energy Minister Tina Joemat-Pettersson said in Parliament on Wednesday.

In June 2014, President Jacob Zuma set the procurement of 9.6 GW of nuclear power as a top priority of his second term of office, but political and legal opposition and controversy have held up the process. 

Joemat-Petersson, answering questions in the National Assembly, said the request for proposals "would test the market". The bids will be the first indication of what nuclear energy will cost, as the Department of Energy has refused all requests for information on the studies it has performed on the cost of nuclear energy. 

Business Day, 8 September 2016

Investec says release of updated IRP could ease IPP frustration and uncertainty

Banking group Investec, which has supported various renewable energy and peaking power projects in South Africa, including the Avon and Dedisa open cycle gas turbines that recently entered commercial operation, remains convinced that the country will continue with its independent power producer (IPP) plans. However, power and infrastructure finance head Mike Meeser cautions that unless the current uncertainty brought about by Eskom’s perceived resistance to IPPs, as well as delays to approved projects, is resolved urgently, investors and financiers could lose confidence.

Meeser told Engineering News Online that the immediate impasse could be resolved through the publication of a new Integrated Resource Plan (IRP) that is endorsed not only by the National Treasury and the Department of Energy (DoE), but also by Eskom. In the longer term, however, the structure of the electricity sector may also need to be overhauled to level the playing field between the state-owned utility and private generators.

Eskom’s current reluctance to sign power purchase agreements (PPAs) with IPPs is arguably a “rational response”, he says, to the recovery in its plant availability and to lower demand, which has resulted in an immediate surplus. However, this surplus is unlikely to be sustained, particularly once the economy begins growing again, and IPPs, which have proved their ability to add capacity timeously and cost effectively, will have a key role to play in ensuring security of affordable supply.

Engineering News, 7 September 2016

SADC region anticipates 4000 MW power in 2017

The effects of climate change, such as the recent El Niño, have affected the majority of African countries’ generation capacity, especially those depending on hydropower.

This phenomenon has caused the Southern African Development Community (SADC) region to have a projected low energy supply, recorded around 8200 MW.

But, last month the SADC heads of state and government gathered in Swaziland to look at the matter and they have declared that there are plans to commission new power projects that will add 4000 MW of electricity to the regional grid in 2017.

ESI Africa, 5 September 2016

The Draft Gas Amendment Bill has been aligned with the gas-to-power programme

The energy department revealed this during a briefing in parliament on its fourth quarter (2015/16) and first quarter (2016/17) performance reports.

The department added that further alignment with upstream gas legislation is being negotiated with the mineral resources department. 

Earlier this year the department, during a briefing on its strategic plan and annual performance plan, indicated that the draft bill will be tabled before cabinet for approval in March 2017.

Department of Energy Media release made available by Sabinet, 6 September 2016

New refinery and upgrades "vital to meet future demand"

Future demand for cleaner fuels would justify building a new refinery and upgrading existing ones, says Tseliso Maqubela, deputy director of petroleum product regulation in the Department of Energy.

PetroSA, an agency of the government, proposed nine years ago building a ZAR200bn, 300 000 barrels per day refinery, dubbed Mthombo at Coega. A feasibility study began in 2012, but no decision has been made. It was envisaged the government would hold a 40% stake in Mthombo, with the rest held by the private sector. 

Maqubela, who was speaking at a South African Petroleum Industry Association (SAPIA) breakfast to launch its 2015 annual report, said it was not optimal for a country to be either self-sufficient or dependant on imports but to have the facilities in place for both.

Business Day, 5 September 2016