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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.

 

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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.

 

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

South African Cabinet Approves New National Energy Plan

In the midst of more electricity outages, courtesy of faults with Eskom’s power generation plans, the South African Cabinet has approved a new national energy plan.

Cabinet on Thursday announced it had approved the promulgation of the Integrated Resource Plan (IRP), South Africa’s policy blueprint for the electricity sector.

The IRP spells out a proposed energy mix for the country until 2030. In a statement, Cabinet said “most of the inputs” from experts in the sector, the public and academia, received during a public consultation process last year were included in the 2019 IRP.

“The plan proposes nine interventions to ensure the country responds to the energy needs for the next decade. The interventions draw from the current baseline of the demand and supply of the country’s energy and the country’s international obligations to the minimum emission standards,” the statement said.

“The plan remains within the policy framework of pursuing a diversified energy mix that reduces reliance on a single or few primary energy sources. It will be revised in line with the changing energy sector environment.”

The approved IRP can be accessed on the mineral resources and energy website after it is gazetted. The IRP was released as the country is experiencing another round of rotational power cuts as Eskom moves to fix boiler tube leaks at five of the utility’s generating units.

Business Unity South Africa this week warned that any further delay in releasing the IRP would prejudice procurement and investment decisions to ensure security of power supply.

 

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

Highlights From South Africa’s Second 2019 State of the Nation Address

South African President Cyril Ramaphosa delivered the country’s second State of the Nation Address yesterday evening, keying South Africans into his plans going forward, now that the country’s new Parliament is settling in, after the recent general election.

Below are 10 highlights from his speech.

  1. A special appropriation bill is to be tabled to allocate a significant portion of the R230 billion that Eskom needs to pay its debtors and keep the lights on.
  2. The president reaffirmed the constitutional mandate of the Reserve Bank “to protect the value of our currency in the interest of balanced and sustainable growth”.
  3. The Minister of Communications has been instructed to issue policy direction to the Independent Communications Authority of SA (ICASA) to begin licensing spectrum that will significantly reduce data costs.
  4. To return public money that has been looted, civil claims arising from investigations conducted by the Special Investigative Unit (SIU), estimated to be around R14.7 billion, will be fast-tracked.
  5. The Presidency plans to drive the implementation a comprehensive plan to create two million jobs for young people over the next 10 years.
  6. Government intends to double international tourist arrivals to 21 million by 2030, by introducing a “world-class visa regime”, and focusing on tourists from China, India and the rest of Africa.
  7. Government plans to accelerate efforts to identify and release public land that is suitable for smart, urban settlements, as well as for farming.
  8. Government plans to establish a gender-based violence and femicide council to guide the former’s efforts to eradicate gender-based violence in South Africa.
  9. Ramaphosa announced plans to train foundation and intermediate phase teachers to teach reading in English and African languages, and to deploy experienced coaches to provide on-site support to teachers.
  10. The President said he envisions the first new city built in the democratic era, with skyscrapers, schools, universities, hospitals, and factories, to ease the pressure on the congested cities of Pretoria, Johannesburg, Durban, and Cape Town. This includes the construction of a cross-country high-speed train.

To watch the full Address, click here.

South African President Cyril Ramaphosa delivers the country’s second State of the Nation Address on Thursday, 20 June 2019.

 

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Sources: [1], [2], [3], [4]. Image sources: [1], [2].

Eskom Plans to Keep South Africa’s Electricity On This Winter

Public enterprises minister Pravin Gordhan has provided an update on the current electricity crisis in South Africa, stating that there is a plan for winter, and the next nine months.

At a media briefing on Wednesday (3 April), Gordhan said that Eskom and the Department of Public Enterprises has a better understanding of the challenges facing the power utility, and how to tackle them.

South Africa was hit with unexpected stage 4 load shedding in March, leaving roads grid-locked and citizens without power for hours at a time.

During that time, Gordhan could not provide any guideline on how to end load shedding, saying that an independent team of engineers was in the processes of assessing Eskom’s power plants to determine the extent of the problems.

While the team’s work is not yet complete – needing an additional few weeks – there is now enough information to plot a way forward, Gordhan said, particularly in preparation for the winter months, where demand on the grid is higher.

The minister said that while the aim is to ensure no future load shedding going forward – this is not a guarantee. “(If this aim fails), at the most, we will see only level 1 load shedding between now and the end of August,” he said.

Eskom chair, Jabu Mabuza, provided an update on major constraints that led to load shedding:

Coal stockpiles have improved;
Coal quality is also being focused on;
Eskom has been able to source more diesel, and is handling forward planning around diesel better;
Eskom is not retrenching workers, but is looking at voluntary separation packages to tackle its workforce issues.

Plan for winter

Eskom’s plan for winter is to look at different scenario’s based on available capacity on the national grid. The power utility has installed capacity of 46,500MW, with support from 2,000MW from renewable sources.

Unplanned outages due to boiler leaks, led to as much as 13,000MW being taken off the grid last month.

In a ‘no load shedding’ scenario, these unplanned outages need to be kept below 9,500MW, Gordhan said.

These are the scenarios:

Scenario 1

Unplanned outages is kept to under 9,500MW
No load shedding
Planned outages within a range of 3,000MW to 5,000MW

Scenario 2

Unplanned outages exceed 9,500MW
Maximum of 26 days of stage 1 load shedding over the 5 months
Eskom said that its units actually perform better in winter, due to lower temperatures, so it is confident it will be able to keep unplanned outages below the 9,500MW limit.

To keep the situation at scenario one, Eskom said it will increase supply from existing units, while bringing more power online.

Key to the plan, Gordhan said that there needs to be a shift from all South Africans in how they consumer electricity, along with more accountability from Eskom.

“Clearly plans are nice to have, the key is the discipline to ensure that implementation occurs. We need increased levels of accountability, said Gordhan. We are appealing to all to reduce the use of electricity. We don’t want load shedding,” he said.

 

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

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