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Projects and Energy Weekly Snippets

31 October 2014

South African investors bulk financiers of renewable energy success
South Africa’s financial institutions have been instrumental in funding the bulk of the projects under the Department of Energy’s multibillion-rand Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), delegates heard at the Solar Indaba, in Sandton, on Friday, 24 October 2014.

The REIPPPP has progressed through four bidding rounds, enabling selected independent power producers to connect renewable energy projects to the country’s strained national grid. South African financial institutions have been behind 86% of the required funding to date. Two-thirds of the debt acquired for the qualifying bidders had emerged from commercial banks, University of Cape Town Graduate School of Business management programme in infrastructure reform and regulation director, Professor Anton Eberhard, said. In less than three years, the REIPPPP had attracted ZAR120-billion for 3 922 MW across 63 mostly solar and wind projects from 100 shareholders – 46 of which were involved in two or more projects. Over 25 projects have already been connected to the grid following three bid windows.

24 October 2014 – Engineering News

Russia kicks off South Africa’s “nuclear vendor parade”
The Department of Energy (DoE) reported on Thursday night that it had concluded its first “nuclear vendor parade workshop” with a delegation from the Russian Federation and that further meetings were planned with vendor countries such as France, China, South Korea, the US and Japan. The workshop, which was reportedly held at a resort in the Drakensberg, included a “large contingent”, around 50 people, comprising senior officials from the South African government, state-owned entities and academia. No details were provided as to the make-up of the Russian delegation, but Beeld reported that executives from Russian nuclear technology group Rosatom were present. Rosatom is keen to supply its VVER reactor solution to South Africa and participated in the recent signing, in Austria, of an “Inter-Governmental Framework Agreement on Nuclear Cooperation” between the Russian and South African governments.

24 October 2014 – Engineering News

Renewable energy project set to power BMW’s Rosslyn plant
BMW South Africa (SA) has signed a power purchase agreement with energy company Bio2Watt to bring renewable energy to the BMW's Rosslyn plant, north of Pretoria. When the energy project comes on stream in the first quarter of 2015, between 25% and 30% of the Rosslyn facility’s energy requirements will be generated from renewable sources. In what is thought to be the first private deal of its kind, BMW SA says the initiative will mark the first commercially viable biogas-electricity project in South Africa. Power will be supplied from the 4.4 MW installed capacity Bronkhorstspruit Biogas Plant, located on the premises of one of South Africa’s largest feedlots, Beefcor. BMW SA noted that “converting organic waste into electrical energy is a well proved technology that has gained further traction worldwide as the swing to renewable energy alternatives gains momentum, and becomes price-competitive with base forms of energy generation”. BMW SA produces the 3-Series sedan at Rosslyn, for both the local and export markets.

29 October 2014 – Engineering News

Eskom warns of load-shedding as technical problems add to woes
On Wednesday, Eskom warned on possible rotational load-shedding as “technical problems” further strained an already tight national grid. The utility, which had called on industrial customers, as well as consumers, to cut back 10% of their electricity consumption, expected the constraints to last throughout the week. Spokesperson Andrew Etzinger said supply would remain tight until the weekend, when demand eased and some of the technical issues were expected to be resolved. However, he warned that the system would remain fragile throughout November.

29 October 2014 – Engineering News

CSP players make case for increased role in SA energy mix
Industry proponents at the Southern Africa Solar Thermal and Electricity Association-hosted concentrated solar power (CSP) leadership dialogue on Wednesday moved to build a case for the application of CSP technology to complement South Africa’s energy mix shift and make its mark on social economic development. Presenting their views and current projects, speakers at the dialogue agreed that deploying CSP plants in South Africa would not only provide significant social and economic benefits, but also place the country as Africa’s leader in terms of technology and experience.

CSP was deemed an affordable, grid-friendly technology, with the potential to firmly contribute to future clean-energy needs, while aiding local economic development. It was expected that solar thermal energy would account for about 11% of global electricity generation by 2050. Presenters included Protemosolar president, Dr Luis Crespo. Spain had made much progress over the last few years, with an installed capacity of 2 300 MW from 50 solar plants. Eskom said it would absorb some CSP-generated energy to the national grid as part of its intention to set aside 10 000 MW for “green power” as it upgraded its transmission corridors.

Some CSP projects already underway include Spanish international engineering and technology company Abengoa’s 100 MW Kaxu Solar One parabolic-trough plant, near Pofadder, which was 98.8% complete, with synchronisation expected next month – a few months ahead of schedule. The group was also building the 50 MW Khi Solar One tower project, near Upington, which was now 92% complete. Meanwhile, Acwa Power expected to inject about ZAR1.6-billion through the localisation of civil works, sourcing concrete and steel during the construction of the 50 MW Bokpoort CSP plant, in the Northern Cape, which had now reached the peak of its 30-month construction. The project, which held a 20-year offtake with Eskom through the Garona substation, was now 60% complete. The latest CSP project, the Karoshoek Solar One 100 MW CSP parabolic trough project, which had emerged through the third-window bidding, was estimated to create about 1 500 jobs through the 30-month construction stage. FG Emvelo is preparing to roll out the project.

29 October 2014 – Engineering News

Shale-gas exploration around the corner
On Monday 27 October 2014, Petroleum Agency South Africa confirmed that it would continue to process pending shale-gas applications received in the early parts of 2011. The applicants affected include Shell South Africa Upstream, Falcon Oil and Gas and Challenger Energy's Bundu Oil and Gas Exploration.

Regulation division GM Lindiwe Mekwe said that final regulations governing the exploration and development of shale-gas resources have not yet been published and that the processing of pending applications was subject to a condition preventing actual hydraulic fracturing until appropriate amendments to the regulations have been promulgated.

On when an exploration right determination would be made, Mekwe said it will take the Minister of Mineral Resources approximately eight months from now to decide on the recommendations put before him pertaining to the applications.

27 October 2014 - Engineering News

South Africa ranked third in the renewable energy market
The Climatescope 2014 report compiled by Bloomberg New Energy Finance shows that renewable energy investments in developing countries has outpaced those in developed countries. South Africa was ranked third after China and Brazil in an assessment of 55 renewable energy markets across Asia, Africa, Latin America and the Caribbean.

In particular, South Africa has rushed ahead with nearly $10 billion worth of renewable energy investment on the last two years. Solar has accounted for the largest share with a total of $6.7 billion out of the $9.4 billion invested in the country since 2006. It appears that the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has been the reason for the positive growth on the energy sector in South Africa.

From 2008 to 2013, Climatescope countries added 142 GW of new, non-large hydro renewables capacity, which represented a 143% growth rate. By comparison, developed countries added 213 GW, posting a clean energy capacity growth rate of 84%.

28 October 2014 – Engineering News

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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