New model on funding state-owned companies

In the Medium Term Budget Policy Statement (MTBPS), Finance Minister Nhlanhla Nene announced that government will raise no more debt for financing and is to consider new sources of equity, and that there had been a shift to embrace privatisation. The Minister said that the private sector was well established within the energy industry. It appears that government is becoming fatigued by the debate regarding privatisation and is more focused on how to deliver services efficiently and manage the costs. 

Before receiving any type of funding, SOCs would need to be "financially sound and operationally effective, contributing to the development without draining the fiscus". The funding of other SOCs, such as South African Airways, the South African Post Office and the Land Bank, would be considered by a ministerial team in January in preparation for the budget speech in February. 

23 October 2014 - Business Day 

Nene confirms Eskom's bailout measures
In the Medium Term Budget Policy Statement (MTBPS) yesterday, Finance Minister Nhlanhla Nene confirmed a further direct allocation to Eskom of at least ZAR20 billion. He confirmed the statements that government would be sacrificing their shareholdings in listed firms, such as Vodacom, and stressed that more than one asset was being considered, adding that it was "only logical" for government to dispose of assets that were not core to meeting its developmental and economic objectives. The MTBPS provided that Eskom would need to borrow an additional ZAR50 billion over and above the ZAR200 billion it had already planned to raise. 

Greater priority is said to be given to relieve pressure on the grid, with 800MW being targeted. Over the medium term, electricity supply would be expanded through ongoing renewable energy investments and through the procurement of 2.5GW of privately supplied baseload electricity. 

23 October 2014 - Engineering News 

Wind power to generate 20% of global power by 2030
On Tuesday 21 October 2014, a report from Greenpeace and a trade association said that wind power could generate 2000GW by 2030, supplying approximately 19% of global electricity. Installed wind energy capacity totalled 318GW worldwide last year and provided approximately 3% of global electricity. Furthermore, the report identified Brazil, Mexico and South Africa as countries for growth in wind energy. Brazil is set to install nearly 4GW this year alone. 

21 October 2014 - Engineering News 

Medupi ignites first oil fire for Unit 6
State-owned power utility Eskom confirmed on Monday that it has successfully achieved the first oil fire for Unit 6, the first of the Medupi boilers at the developing power station in Limpopo. With the first oil fire, using liquefied petroleum gas and fuel oil, now achieved, the utility would now turn its focus to the optimisation of the oil burners to ensure the stability of the oil fire. “Medupi is now well on its way and steadily progressing towards the blow-through,” Eskom said in a statement. Outlining the process of starting the first oil fire, Eskom explained that, following the successful sequence starts on the oil burners, the purge steam, atomising steam and gas flame sequences were activated, with the latter successfully igniting the fuel oil.

20 October 2014 - Engineering News

Vendor countries parade prospective nuclear technologies for SA
Government has reiterated that it is currently in talks with various prospective nuclear vendor countries over nuclear technologies that could be implemented. This flows from its bid to progress its contentious nuclear build programme and increase the contribution of nuclear energy to the country’s overall energy mix. 

As part of the “pre-procurement” phase and preparation for the roll-out of the nuclear build programme, government has entered into "several negotiations" with vendor countries, having recently signed intergovernmental framework agreements with the Russian Federation and France, as well as additional nuclear-based agreements with the US and South Korea. Moreover, it has held consultations with several nuclear vendor countries – including Japan and China – that had implemented pressurised water reactor nuclear technology, similar to that used at the Koeberg nuclear power plant, in the Western Cape. Government said Energy Minister Tina Joemat-Pettersson was expected to sign nuclear cooperation agreements with China in the first week of November and with Japan at a later stage. 

20 October 2014 - Engineering News

Master plan for the solar industry 
The South African Photovoltaic Industry Association (SAPVIA) are set to meet next week in Kimberley to decide and implement a "master plan" to expand the growth and regulation of the industry for the next decade. This resulted in the organising of a workshop by the Minister of Energy next week, during which she and Public Enterprises Minister hope to develop a “shared vision” for the future of the solar industry, in collaboration with private sector players.

David Chown, SAPVIA Chairperson said SAPVIA was on a “cheeky mission” to increase government’s allocation to the solar energy sector, and would appeal for an additional 2000MW a year. “We can do it; we have the capacity. We do, in the short term, see an accelerated roll-out plan".