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Garden Route to Get R1.2-billion Solar Farm to Counter Load-shedding

A R1.2-billion solar farm project has been approved by the National Treasury, Kannaland municipal manager Reynold Stevens has confirmed.

Stevens announced the project during an oversight visit to the Garden Route district municipality recently, adding that it would be a public-private partnership between Kannaland Municipality and InnovSure to provide an alternative source of green energy to the municipality.

”This is a fantastic initiative as this investment will create job opportunities and the company will further invest R42 million per annum in the Kannaland Municipality for critical infrastructure projects and further assist the Municipality with smart technology,” said DA MPP Deidre Baartman.

“Government cannot tackle the country’s energy crisis on its own,” Baartman said.

“It is vital that we break down the national government’s monopoly on energy generation and provision, and bring in the private sector to diversify this industry as a matter of urgency.”

“The Kannaland solar farm is a prime example of this.”

Combating load-shedding

During off-peak periods, the solar farm will also be able to draw energy from Eskom and store it for release later.

This power can be used to supplement shortages during peak hours and sent to nearby municipalities such as Mossel Bay.

“I will be monitoring this development closely to ensure that the Western Cape attains energy independence from Eskom to grow our provincial economy and create much needed jobs,” Baartman said.

The DA said it remains committed to cutting red tape and using innovation to grow its provincial economy and create jobs.

A map of the Kannaland municipality is shown below.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], American Public Power Association [2].

Cape Town Moves to Set Up Own Electricity Supply

Cape Town wants to set up its own independent power producer office to secure renewable energy, following President Cyril Ramaphosa’s announcement during his Sona address that municipalities in good financial standing will be allowed to procure their own power from IPPs. However, the City says the turnaround could be 2-3 years.

Executive director for energy at the City of Cape Town, Kadri Nassiep says the City has engaged national treasury with a view to setting up its own independent power producer (IPP) office along the lines of the renewable energy independent power producer programme (REIPPP).

He says “we have also engaged CSIR to prepare our mini-IRP that will direct our call for proposals”. Electricity provision in the country is guided by the integrated resource plan (IRP) which sets out what electricity will be sourced and when. Government has used the IPP office, which falls under the department of mineral resources and energy, to procure renewable energy in earlier REIPPs. The IPP office has begun an exercise to source 2,000 to 3,000 megawatts of emergency supply on an urgent basis.

Cape Town’s intention to set up its own IPP office, which will implement its own IRP, would constitute a dramatic re-shaping of the energy landscape. Nassiep says “we still have to refine tariffs, but we are looking at it already”. Budgets need to be realigned, he says, but that’s not a huge issue. “So we are cautiously optimistic, but let’s see what [mineral resources and energy minister] Gwede Mantashe publishes in terms of schedule 2.”

Mantashe announced earlier in February at the Mining Indaba in Cape Town that the government would be gazetting a revised schedule 2 of the Electricity Regulation Act, which will enable self-generation and facilitate “distributed generation” by municipalities.

The City of Cape Town has fought a protracted battle with the minister and regulator Nersa over the right to source its own electricity. The dispute has its origins in 2015 when then Cape Town mayor (Patricia de Lille) asked the then energy minister (Tina Joemat-Pettersson) to allow the City to source renewable energy, but did not even get a reply. The case has been set down to be heard in the high court on 11-12 May. Given the constrained electricity supply, the City of Cape Town had argued for an earlier court date, but has not been able to secure this.

Asked if the court case will still go ahead, Nassiep said: “In my opinion yes. We still need clarification from the court regarding our rights. “For instance, the minister might opt to issue [a] once-off determination in favour of munis and then not again. Or he can opt to keep it later to a cap of 500 megawatts, which might limit us unfairly. So it’s still needed.”

Nassiep says that “unfortunately” there is a likely two- to three-year time horizon for Cape Town’s own sourced power to come on stream because of financial closure issues, environmental impact assessments, power purchase agreements as well as connection charges and ordering of connection and plant equipment. The Centre for Environmental Rights (CER) has joined the Cape Town court action, the CER’s Nicole Loser saying that local government has a constitutional duty to provide clean and healthy electricity, “which does not pollute our air, water, soil, or damage our climate”.

Loser says the Sona remarks were “very vague” on the details of municipal procurement. “Also not clear is if there will be the needed legal reform to address the current uncertainty around municipal procurement of whether Mantashe will simply issue the determination requested by the City.”

Cape Town mayor Dan Plato cautiously welcomed Ramaphosa’s announcement. “However, urgent clarity is required from the national government on the legal and regulatory nuts and bolts of how this must happen. “We need urgent clarity from the government on the roles and responsibilities for municipalities and other stakeholders in terms of the new generation capacity regulations in the Electricity Regulation Act,” said Plato.

He says the City is doing a study to determine how best to overcome energy poverty, through various projects including installing solar kits, solar home systems, increasing free basic electricity and improving access to gas. “Improving access to affordable electricity is a key deliverable that we are investigating at the moment.”

Ramaphosa also announced that “a Section 34 ministerial determination will be issued shortly to give effect to the IRP 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydropower, battery storage and coal”. “We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months from approval,” he said.

Nersa will continue to register small-scale distributed generation for own use of under one megawatt, for which no licence is required and will ensure that all applications by commercial and industrial users to produce electricity for their own use above one megawatt are processed within the prescribed 120 days, Ramaphosa said. “It should be noted that there is now no limit to installed capacity above one megawatt.”

He said that a bid window for round five of the renewable energy IPP will be opened and that the government will work with producers to accelerate the completion of bid window four projects. “We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants.”

While the electricity generation shortfall the country faces was quantified at the release of the IRP in October at 2,000 megawatts, this has subsequently been revised in later official pronouncements to 3,000 and then 5,000 megawatts. A document issued after the January lekgotla of the ANC’s national executive committee put the shortfall at 5,000 to 7,000 megawatts.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Matthew Henry [1], Arqm Ahmd [2].

South Africa Will Embrace Private Power Generation, President Ramaphosa Says

South Africa will embrace efforts by businesses to generate their own electricity, President Cyril Ramaphosa said recently, reacting to growing frustration at red tape throttling private power generation.

Ramaphosa is under pressure over nationwide power cuts that have dented economic output and sapped investor confidence in Africa’s most industrialized economy.

Ailing state-owned utility Eskom generates more than 90% of the country’s electricity but regularly struggles to meet demand because of breakdowns at its coal-fired power plants.

Many power-hungry companies such as mines want to build their own renewable energy plants to reduce their reliance on Eskom but have not been able to secure the necessary regulatory approvals.

“For the first time we are now saying let us have self-generation,” Ramaphosa told an economic conference in Johannesburg. “We have opened up a new era … that says we are now embracing the fact there are those companies and households that want to generate their own energy.”

“We cannot stop technology, we cannot stop the future from arriving,” he added.

South Africa’s mining industry body the Minerals Council on Monday urged the government to act urgently to bring online new power sources and ease licensing rules.

Roger Baxter, chief executive of the Minerals Council, told Reuters last month that miners could build between 500 megawatts (MW) and 1,500 MW of their own generating capacity over the next few years if regulations were eased.

Ramaphosa’s government has been slow to procure more power since the electricity cuts escalated last year.

Some labor unions and members of Ramaphosa’s governing African National Congress party are deeply suspicious of allowing in more independent power producers. A vocal coal lobby has also blamed renewable energy firms for hastening Eskom’s financial decline.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Johanna Montoya [1], [2].

The Largest Green Energy Projects in South Africa

As Eskom fails to keep unplanned breakdowns at below 9,500MW – the level at which it is forced to consider load shedding – since the start of December, there is growing pressure on government to fast-track renewable power projects.

Ntombifuthi Ntuli, CEO of the South African Wind Energy Association (SAWEA), believes just by lifting the Maximum Export Capacity (MEC) on all operating wind farms, which governs how much energy is permitted to be exported by wind farm power generators to the grid, 500MW of energy could immediately be brought online.

According to the Independent Power Producers Procurement Programme (IPPPP), 3,976MW of electricity generation capacity from 64 IPP projects has been connected to the national grid. Wind makes up the lion’s share providing 52% of renewable energy to the grid. Among the largest are 3 wind farms that contribute almost 140MW each.

IPPs are nowhere near the 36,400MW (41,000MW if you include Medupi and Kusile which aren’t finished yet) delivered by coal. But this picture could change quickly: unlike coal power stations, which take years to build – Medupi has been under construction since 2007 – renewable projects can be built quite quickly and there’s a good track record of them sticking to schedules.

There is some good news on the way. IPP contribution is expected to go up to 6,422MW once all 112 projects come online. These are part of Bid window 4, the last bid window to be signed off by Eskom. These are currently the largest sustainable energy projects:

Longyuan Mulilo Green Energy Number 2 North Wind Energy Facility – 138.96MW

Longyuan Mulilo’s Number 2 North Wind Farm is one of the largest wind farms in South Africa. It is a massive 138.95MW farm found a few kilometers outside of De Aar, in the Northern Cape. Along with a second 100MW wind farm, also in De Aar, Longyuan South Africa has invested almost R5 billion into the two projects. Longyuan SA is a wholly owned subsidiary of China Longyuan Power Group Corporation – one of the world’s largest wind-power developers.

Loeriesfontein Wind Farm 2 – 138.23MW

On 8 December 2017, Loeriesfontein Wind Farm was delivered into operation on schedule, and on budget, as part of the third round bid window of the REIPPP. With a generation capacity of 140MW the R3.5 billion farm boasts 61 Siemens SWT-2.3-108 turbines. The Loeriesfontein Wind Farm forms part of a joint venture between global energy producers Mainstream Renewable Power and Lekela Power.

The site was chosen because of its excellent wind resource, its proximity to national roads for wind turbine transportation, the favourable construction conditions, municipality and local stakeholder support, the straightforward electrical connection into the Eskom grid, and studies showed that there would be little environmental impact.

Khobab Wind – 137.74MW

Khobab Wind Farm, also built by Mainstream Renewable Power, is located right next door to Loeriesfontein Wind Farm. Like its neighbour the farm contributes almost 140MW. The wind farm was estimated to cost R3.5 billion.

Cookhouse Wind Farm – 135.8MW

The R2.4 billion Cookhouse Wind Farm comprises of 66 Suzlon S88 wind turbine generators with a capacity of 135.8 MW.

It is located just outside of Cookhouse, in the Blue Crane Route Municipality in the Eastern Cape, and spans 2,600 hectares of pastoral land. The land is leased from a local farmer and you can expect to see plenty of sheep grazing below the blades. The wind farm first supplied electricity to the grid in March 2014.

Suzlon Wind Energy South Africa constructed the wind farm and is currently responsible for operation and maintenance. It is owned by Old Mutual, the African Infrastructure Investment Managers (AIIM) and the Local Community Trust.

Gouda Wind Project – 135.5MW

The R2,7 billion Gouda Wind Farm is owned by a consortium of ACCIONA Energía (51%); Aveng (29%); Soul City Broad-Based Empowerment Company (10%); and the Gouda Wind Energy Community Trust (10%). Located in the Drakenstein munisipality, Western Cape, it has 46 AW3000 turbines mounted on 100 meter-high concrete towers.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], Anastasia Palagutina [2].

World Bank Cuts South African GDP Growth Forecast Due to Eskom’s Load Shedding

The World Bank is the first key institution to cut its economic growth forecast for South Africa to below 1% for 2020 due to electricity supply concerns.

It now expects the economy to expand by 0.9% this year, the Washington-based lender said Wednesday in its Global Economic Prospects report. That compares with an estimate of 1% in its Africa Pulse report released in October and is well below government forecasts. Its outlook for Africa’s most-industrialized economy is “markedly weaker” because it sees electricity supply and infrastructure constraints inhibiting domestic growth with weaker global economic conditions weighing on export demand.

The bank’s revision comes as Eskom which generates about 95% of the country’s electricity, resumes rolling blackouts earlier than expected. The power cuts threaten to drag on an economy stuck in the longest downward cycle since 1945 and that hasn’t expanded by more than 2% annually since 2013.

The debt-laden power utility, described by Goldman Sachs Group as the biggest threat to South Africa’s economy, put the country at risk of a second recession in as many years after it implemented the most severe power cuts to date in December. Gross domestic product growth likely slowed to 0.4% in 2019, the World Bank said.

The World Bank sees GDP growth averaging 1.4% in 2021-22 if President Cyril Ramaphosa’s administration is able to ramp up structural reforms and address policy uncertainty, and if there’s a recovery in public and private sector investment.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].