Projects and Energy Weekly Snippets

Contractors appointed for LHWP Phase 2 work packages

The Lesotho Highlands Development Authority (LHDA) has appointed three consultants for work packages as part of Phase 2 of the Lesotho Highlands Water Project (LHWP). The contracts, worth a collective ZAR40 million, were awarded to the SMEC-FMA joint venture (JV); Jeffares & Green, in association with GWC Consulting Engineers; and the Maseru-based Maleka, Ntshihlele, Putsoa JV. LHDA CE Refiloe Tlali on 28 May said this was a significant step for the LHWP and another step towards strengthening the country’s economy.

The contracts formed part of the advanced infrastructure works for the ZAR17.5 billion project by the governments of Lesotho and South Africa. The contracts included the design and supervision of the construction of the Polihali North East access road, the supervision of geotechnical investigations for the Polihali dam and the Polihali–Katse water transfer tunnel, and the demarcation of the Polihali reservoir.

Engineering News, 28 May 2015

South Africa to release CoGen IPP bid documents this week

The Department of Energy (DoE) has issued a notice of a request for bids (RFB) under the recently announced cogeneration (CoGen) independent power producer (IPP) procurement programme. Under the CoGen process, government’s IPP office will consider combined heat and power (CHP) generation projects, as well as waste-to-energy and industrial biomass developments.

The primary-energy source that will be considered for the CHP includes coal, waste or discard coal, natural gas and liquid fuels. However, waste or discard coal will not be considered for waste-to-energy projects, which should be based on waste heat, process furnace off-gas, or other non-renewable energy waste emitted from industrial processes. The industrial biomass category embraces sugar-related wastes, forest-product mill wastes as well as other agricultural or forestry residue.

The RFB notice does not indicate an allocation between the technologies, nor does it stipulate a bidding closing date. Under already published determinations, the DoE is in a position to procure 800 MW of cogeneration capacity from IPPs. However, Energy Minister Tina Joemat-Pettersson has indicated that the bidding process would be for 1800 MW and that she was seeking concurrence from the energy regulator to increase the size of the determination.

Engineering News, 1 June 2015

Turkish powerships group says it could inject up to 2 000 MW into SA within 18 months

Turkish floating power plant group Karpowership says it has identified several potential sites along South Africa’s coastline where it could berth or moor vessels with generating capacities of up to 500 MW. Sales director Patrick O’Driscoll, who is marketing the concept to the South African government and Eskom claims that the company, which is part of the larger family-owned Karadeniz Holdings group, is in a position to introduce around 500 MW of capacity into South Africa by year-end and as much as 2000 MW within 18 months.

O’Driscoll says the powerships are able to operate on both natural gas and heavy fuel oil (HFO) and argues that its HFO is easily accessible and trades at a material discount to diesel, which would make the electricity produced by the floating power stations cheaper than output currently produced from the open-cycle gas-turbines (OCGTs) in the Western Cape. Another major value proposition for South Africa is the prospect of being able to introduce capacity in a short timeframe. O’Driscoll also argues that, over a five-year period, the powership solution had the ability to deliver a ZAR43 billion saving when compared with the cost of operating the OCGTs.

Engineering News, 1 June 2015

Energy investment company to list on AltX

Renergen, a holding company focused on investing in alternative energy projects, will list on the AltX as a special purpose acquisition company on 9 June. “We believe that the world is on the verge of unprecedented growth in the production and use of alternative energy sources. By increasing access to reliable, clean energy we can accelerate economic growth in sub-Saharan Africa, where potential energy resources are more than sufficient to meet the region’s overall needs,” commented Renergen CEO Stefano Marani.

The company, which was considering a number of acquisitions, would invest up to ZAR500 million in alternative or renewable-energy projects, such as natural gas and hydropower, using debt and top-up equity from shareholders as required to deliver competitive returns on capital employed. Renergen was considering projects that recently started generating revenue or that were close to generating revenue.

Engineering News, 2 June 2015

Bladeless wind turbines: a futuristic innovation to become a reality

Three Spanish developers have announced a brand new innovation in wind energy technology, a bladeless wind turbine, which is both environmentally and financially friendly. Co-founders of Vortex Bladeless, Raul Martin, David Yáñez and David Suriol said that they are expecting to launch the bladeless clean energy technology within the next 18 months for small scale and residential use.

The product is a wind generator without blades. It works by using vorticity, the aerodynamic effect that occurs when wind breaks against a solid structure. According to the developers, the Vortex structure starts to oscillate, and captures the energy that is produced. The developers added that Vortex is designed to operate with minimal input materials by excluding mechanical parts such as gears and linkages, saving costs and reducing maintenance intervals.

The Vortex innovators claim that the bladeless wind technology will produce energy at a 40% lower cost than a comparable wind installation. This type of system could prove to be an affordable and reliable solution for rural off-grid communities in African and India.

ESI-Africa, 3 June 2015

Investment: EY Africa attractiveness survey shows decline

On 2 June, the results of the 5th annual EY Africa attractiveness survey indicated that foreign direct investment (FDI) projects fell 8.4% in 2014, but remained well above the pre-2008 levels. However, foreign direct capital investment into the continent surged to $128 billion, up 136% in 2014 – a five-year high, with the number of jobs created from FDI jumping 68% resulting in 188 400 new positions across Africa.

Ajen Sita, Chief Executive Officer at EY Africa said: “In the past year, Africa has experienced stronger headwinds than in recent times. Consequently, economic growth this year is likely to be at its lowest in five years, dragged down by the impact of lower oil prices on the Nigerian and Angolan economies, the softening of other commodity prices, and South Africa’s sluggish growth." Sita added that "at the same time though, economic growth across the continent remains resilient".

Regionally, Western European and intra-African investment remain the top sources of FDI, although 2014 saw traditional investors, including North America and the Middle East, refocus attention on Africa.

ESI-Africa, 3 June 2015 

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.


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