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Projects and Energy Weekly Snippets

5 December 2016

South Africa

Weekly projects and energy updates in South Africa

Treasury will not cover Eskom’s nuclear plans

The Treasury has made it clear that Eskom’s existing ZAR350 billion guarantee facility cannot be stretched to cover a new nuclear-build programme.

But it has confirmed that the facility, whose March 2017 expiry date prompted rating agency S&P Global to downgrade Eskom’s rating deep into junk territory last week, will be extended to cover the much-delayed new power stations Eskom is already building.

Business Day, 2 December 2016

Awareness low of South Africa’s “astounding” renewables success, U.S. survey finds

Amid domestic uncertainty about the future of South Africa’s renewable-energy procurement programme, a U.S. State Department official has described the initiative as “astoundingly successful” and reports that several countries are currently seeking to draw lessons from the country’s reverse-auction model.

In fact, the department’s International Information Programs Director of Public Engagement David Shelby tells Engineering News Online that he has been surprised by the low levels of public awareness in South Africa about the success of the Renewable Energy Independent Power Producer Programme (REIPPPP), which has facilitated nearly ZAR200 billion of investment since 2011. 

Engineering News, 1 December 2016

Eskom commissions 765 kV transmission line in Western Cape

State-owned Eskom earlier this week commissioned its 765 kV Kappa–Sterrekus transmission line, connecting the Western Cape to the network over and above the 400 kV network.

The 765 kV is one of the highest voltages used for electricity transfer in the world.

This line connects Sterrekus’s 765 kV substation through the 765 kV network to the north. The substation is equipped with the latest switchgear and protection schemes and will be the new hub for the transmission western grid, as it connects to Koeberg and other major substations in the Peninsula. 

Engineering News, 1 December 2016

Mozambique sees positive outcome for natural gas development

Mozambique’s tender requesting interested developers to bid for the development of natural gas from the Rovuma Basin has attracted 14 companies.

According to a local daily newspaper, Noticias, a source from the ministry of mineral resources and energy confirmed the development.

It is reported that upon the discovery of natural gas in the Rovuma Basin, off the coast of Cabo Delgado province, the government and the concessionaires agreed that a portion of the gas should be used domestically.

ESI Africa, 1 December 2016

Nuclear secrets revealed

The Department of Energy underplayed what it had been told the nuclear programme would cost, consultants’ reports distributed to MPs on Tuesday have revealed.

The details of government planning regarding the nuclear new build programme, which has been championed by President Jacob Zuma, have been kept secret by the department despite several access to information applications by Business Day and other groups.

While not all the documents were made accessible in their entirety, the contents are hardly spectacular and discuss hypothetical models and vague financing options.

Business Day, 30 November 2016

Brown says current power build “trajectory” may be detrimental to consumers

Public Enterprises Minister Lynne Brown says that South Africa is currently adding electricity capacity to the grid at rate higher than what is required and argues that the “current trajectory” could be detrimental to consumers.

She asserts, therefore, that it is “critical that the Integrated Resource Plan (IRP) is concluded so we can have a plan that offers maximum protection for consumers”.

Engineering News, 30 November 2016

Inside South Africa's new energy plan

The much awaited updated South African Integrated Resource Plan for electricity has been released for comment.

The document makes far-reaching proposals about the target energy generation mix leading all the way to 2050. In particular, the plan pronounces on the future scale and role of nuclear energy and renewable energy technologies. The appropriateness of these has been debated a great deal in the country in the past few years.

If adopted in its current form, it will lead to a 15-year delay in the construction of new nuclear power plants. But it will also result in a greater reliance on gas, solar and especially wind power than anticipated five years ago in the previous plan 2010-2030.

Business Day, 29 November 2016

Kganyago holds up renewables scheme as the type of structural reform needed to lift growth

South African Reserve Bank (SARB) governor Lesetja Kganyago has lamented the prevailing uncertainty around South Africa’s renewable-energy procurement programme, which he heralds as the type of “no-brainer” structural reform that should be continued and expanded.

Speaking at a briefing of editors in Johannesburg, Kganyago noted that the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which had facilitated nearly ZAR200 billion in private investment, was held in high regard globally.

Engineering News, 29 November 2016

Hazard assessments accurate – Eskom

Eskom conceded on Friday that hazard assessments for the proposed Thyspunt nuclear site were accurate, and that its own assessment had already identified that the area was seismically active 10 000 years ago.

Business Day had reported that a geological study had concluded it would be almost impossible to construct a nuclear power station safely at Thyspunt, near Jeffery's Bay, because of deep hidden canyons in the bedrock covered by sand and soft rock. Thyspunt is one of Eskom's three sites identified for possible construction of a power station and is now the preferred site.

Business Day, 28 November 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 or Mahashini Govender.

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