Clean energy investment surges 30% but 2016 now set for down year 

New investment in the global clean energy sector totalled US$75.3 billion for Q2.16, a 30% quarterly increase. Despite the recent surge, investment in Q2.16 was a far cry from the US$90 billion recorded in the corresponding period last year.

“Deal activity rebounded in the second quarter as some large offshore wind and solar projects reached financial close,” commented Thomas Sturge, Head of Research at Clean Energy Pipeline. “But a particularly weak first quarter means 2016 will likely be the first down year for investment since 2013.

“Only US$134 billion was invested in the first half of 2016, compared with US$168 million in the first half of 2015.” 

Clean Energy Pipeline, 8 July 2016

Private equity investors to increase investment in oil and gas sector

Private equity (PE) firms are readying to deploy more capital into the global oil and gas sector, with 25% planning acquisitions before the end of the year and 43% by the first half of 2017, a global survey of 100 PE firms active in the sector released on Monday by advisory firm Ernst & Young (EY) shows.

With US$971.4 billion of PE dry power from June 2016 still to be deployed, EY’s survey Capitalising on opportunities: Private equity investment in oil and gas, revealed that PE firms were preparing to increase investment in the sector.

Engineering News, 11 July 2016

Policy: Hydropower proposals out for comment 

A draft sustainable hydropower generation policy released on Friday for comment focuses on harnessing the potential of existing water and sanitation infrastructure either to meet own-use demand or to augment project-specific, municipal or national grid electricity supply.

To that end, the draft paper proposes that dams, reservoirs, canals and pipelines should be retro-fitted with the necessary hydro-electric plants. Among the issues discussed are: an investment climate that would attract independent hydropower producers; minimising the impact of changes in stream regimens on riparian habitats; and the importance of an integrated licensing process.

Department of Water and Sanitation Media Release made available by Sabinet, 12 July 2016 

South Africa should consider onshore LNG regasification, Fluor argues

Global engineering and construction group Fluor argues that South Africa could consider both onshore and offshore storage and regasification options for the importation of liquefied natural gas (LNG), however it believes that onshore facilities could offer a number of advantages.

The South African government is currently showing a preference for a floating storage and regasification unit, or FSRU, as part of a broader plan to develop the gas importation infrastructure needed to support a gas-to-power (GTP) procurement programme.

The Department of Energy is aiming to procure 3126 MW of gas-fired power generation from independent power producers (IPPs) and a further 600 MW from a public-private partnership involving state-owned companies.

Engineering News, 12 July 2016

Eskom, local universities sign Phase 2 of the EPPEI funding agreement

Eskom will next week sign Phase 2 of the Eskom Power Plant Engineering Institute (EPPEI) funding agreement, which will see the state power utility committing ZAR155 million to execute and enhance eight inter-university programmes in South Africa, integrating research efforts and creating synergy between academic research and practical application on interdisciplinary technical challenges at Eskom.

Phase 2 of the EPPEI programme, which would run from 2017 to 2021, aimed to fund 300 masters and PhD graduates, as well as focus on upskilling 1000 students with B-Tech qualifications and artisanal skills.

The programme primarily targeted Eskom engineers and sought to enhance the utility’s niche engineering skills within nine specialisation centres.

Engineering News, 12 July 2016

Angola to look at hydrokinetic power generation

In southern Africa, Angola’s Ministry of Energy and Water has announced that it has engaged into a memorandum of understanding (MoU) with industrial group Privinvest to introduce hydrokinetic power generation in the country.

The MoU was signed within the context of the Republic of Angola’s 2025 Energy Security Plan, under which the country has stated its aim to achieve 9000 MW of production by 2025, with particular priorities for hydrokinetic power generation, the company said in a statement.

ESI Africa, 8 July 2016

East African crude oil pipeline on the cards

Neighbouring east African countries, Tanzania and Uganda have announced that a crude oil pipeline is on the cards with construction planned to commence early next year.

According to local media, Uganda's energy minister, Irene Muloni, confirmed the development of a crude oil pipeline following discussions the ministry held on Tuesday with a visiting Tanzanian delegation.

Muloni said the two countries had agreed to fast-track the project, which will cover 1443 kilometres.

ESI Africa, 14 July 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.