Weekly projects and energy updates in South Africa

South Africa won’t change IPP course "midstream"

Cabinet appears to have put paid to Eskom efforts to halt the country’s highly regarded independent power producer (IPP) programme, with Minister in the Presidency for Performance Monitoring and Evaluation Jeff Radebe indicating on Monday that there was no intention to “change course midstream”.

Speaking in Pretoria at a briefing on the Cabinet lekgotla, which took place at the Sefako Makgatho Presidential Guesthouse from 16 to 19 August, Radebe endorsed a 17 August statement by Energy Minister Tina Joemat-Pettersson, in which she reiterated that South Africa was pursuing a “diversified energy mix”, which would include IPPs and the new nuclear build programme.

Her statement followed revelations that Eskom chairperson Dr Ben Ngubane wrote her a letter indicating that the state-owned utility was unwilling to sign further power purchase agreements with IPPs beyond the preferred projects selected under bid widow 4.5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). 

Engineering News, 22 August 2016

Wind, solar can supply bulk of South Africa’s power at least cost, CSIR model shows

The dramatic fall in the cost of supplying power from wind and solar photovoltaic (PV) plants has moved the global electricity supply industry beyond a critical “tipping point”, which leading energy scientist Dr Tobias Bischof-Niemz says is irreversibly altering the operating model, with significant implications for sun-drenched and wind-rich South Africa.

Instead of renewable energy playing only a modest and supportive role in the future supply mix, research conducted by the Council for Scientific and Industrial Research (CSIR) Energy Centre shows that having the bulk of the country’s generation arising from wind and solar is not only technically feasible, but also the lowest-cost option.

“The notion of baseload is changing,” Bischof-Niemz tells Engineering News Online. Over a relatively short period, renewables have become cost competitive with alternative new-build options in South Africa, dramatically altering the investment case.

Engineering News, 22 August 2016

Commercial viability for LNG in SSA, says report

In sub-Saharan Africa, liquefied natural gas (LNG) has been identified as a niche area for the region, with discovered resources enough to become commercially viable, according to recent BMI research.

According to the research analyst, Ivory Coast, Ghana and South Africa were identified as the promising regions, Business Day Live reported.

The research report highlighted that due to many countries having limited domestic consumption and infrastructure, integrated LNG-to-power projects would be an anchor for wider demand creation,Business Day Live reported.

ESI Africa, 22 August 2016

Ingula Pumped Storage Scheme marks milestone

In South Africa, national power utility Eskom declared on Monday that Unit 2 of the Ingula Pumped Storage Scheme came into commercial operation becoming the second generator after the power plant’s Unit 4 to have completed all the prerequisite quality assurance tests.

Launched last month by President Jacob Zuma, Ingula’s Unit 4 was the first to come into commercial operation.

Eskom noted via a statement that the commercial operation of these two units mark a key milestone towards the full commercial operation of the entire Ingula Pumped Storage Scheme ahead of the scheduled deadline of mid-2017.

ESI Africa, 24 August 2016

Eskom, Outa at odds over nuclear-site licensing notices

Eskom insists it has complied with the National Nuclear Regulator’s (NNR) prescribed processes in its application for Nuclear Installation Site Licences (NISL) at Thyspunt, in the Eastern Cape, and Duynefontein, in the Western Cape. However, a civil society campaigner, Organisation Undoing Tax Abuse (Outa), alleges that NNR and Eskom have attempted to side-step public participation processes by publishing notices in a provincial gazette, rather than the national gazette and by shortening the deadline to below the 30 days.

In a statement, Outa suggests that the publication of the notice in the Eastern Cape Provincial Gazetteand the shortened comment period “negates the spirit and constitutional rights for the public to participate in decisions that affect them”.

“The moment for comment on the controversial nuclear matter is now, and it is crucial that as many members of the public as possible submit a comment as an interested and affected party,” Outa says, adding that if the public fail to comment on a gazette it is deemed to constitute acceptance of the proposal.

Engineering News, 24 August 2016

NERSA confirms appeal of court’s RCA judgment

The National Energy Regulator of South Africa (NERSA) confirmed on Thursday that it would appeal the 16 August North Gauteng High Court judgment setting aside its approval of Eskom’s third multiyear price determination (MYPD3) Regulatory Clearing Account (RCA) adjustment for the 2013/14 financial year.

Eskom submitted an application for revenue and cost variances of ZAR22.8 billion for the financial year in question and was granted ZAR11.2 billion on 1 March, resulting in a 9.4% tariff increase on 1 April. Had the RCA clawback application been rejected, the tariff would have increased by 3.5%.

A group of energy-intensive businesses, supported by the Nelson Mandela Bay Business Chamber, subsequently approached the court, claiming that NERSA and Eskom had failed to follow the prescribed MYPD methodology and that the outcome was, therefore, unlawful.

Engineering News, 26 August 2016 

The above reflects a summary of certain news articles published during the preceding week. It is not an expression of opinion in respect of each matter, nor may it be considered as a disclosure of advice by any employee of Hogan Lovells. 

For more information contact Charles Marais orMahashini Govender.