Projects and Energy Weekly Snippets

Solidarity urges Eskom to rethink severance packages
Solidarity CEO Dirk Hermann said it is inappropriate for Eskom to be offering voluntary severance packages to its employees and it should be focused on rebuilding staff morale. Solidarity currently represents 7 000 members working at Eskom, both semi and high skilled individuals, including most of its artisans.

Some 3 500 individuals had reportedly applied for the package, but Eskom subsequently either withdrew the offer, or indicated that it would be reviewing packages that had already been approved.

Herman makes the point that it is illogical to offer packages when the morale is as low as it is now, because that will lead to an exit of skills. Eskom must invest in the morale of the company, because what it needs now is 150% from the workers to keep the lights on.

1 December 2014 - Engineering News

Weekend load shedding to continue
After load shedding from 6:00 to 22:00 on Saturday and 8:00 to 22:00 on Sunday, it appears that the same will be implemented on Monday and Tuesday this week too.

Emergency reserves will be used through the evening peaks, but any unforeseen technical problems at power stations or an increase in demand due to the weather conditions could necessitate the implementation of rotational load shedding.

Eskom’s new CEO Tshediso Matona confirmed that the power system was in "crisis" and that South Africa would be "living on the edge" until large-scale new capacity could be introduced, or until the existing fleet could return to an energy availability factor of 80% – in the first half of 2014/15, the EAF from the coal-heavy fleet stood at around 76%.

Load shedding is said to continue through the summer months.

1 December 2014 - Engineering News

SA seeks bids for the procurement of energy
The Request for Proposals (RFP) has been issued by the Development Bank of Southern Africa for international and domestic advisers to design, develop and implement programmes for the procurement of energy from independent power producers.

The deliverables included IPP baseload allocations and allocations arising from the Medium-Term Risk Mitigation (MTRM) plan, both of which have been catered for under the current version of the Integrated Resource Plan (IRP), which is in the process of being updated.

Government is intending to procure 800 MW of cogeneration capacity, which could include biomass, industrial waste and combined heat and power sources. A further 474 MW is intended to be procured from natural gas projects. Under the baseload deliverables, 2 500 MW has been allocated to coal-fired independent power producer projects, 2652 MW to baseload and/or mid-merit natural gas capacity and 2609 MW to domestic and imported hydro-electricity prospects.

2 December 2014 - Engineering News

Possible replacement of the Eskom Board
The current Eskom board members could be replaced as early as next week if Cabinet approves the proposal made by Public and Enterprise Minister Lynne Brown.

Brown stated that all SOEs were overdue for rotation. This comes after chairman Zola Tsotsi had written to Brown, seeking her intervention after the board had convened a meeting in his absence. The subject of the meeting was a ZAR43 million sponsorship deal that an Eskom executive, allegedly former acting CEO Collin Matjila, concluded with the New Age newspaper. The New Age is owned by the Guptas who would raise most of the revenue for the Eskom branding during live television broadcasts with cabinet ministers hosted by the New Age.

Eskom auditors flagged the deal as a "reportable irregularity" and the board had no choice but to disclose the report. The board members have remained at odds with one another since the contract at Koeberg was awarded to Areva instead of the recommended Westinghouse.

2 December 2014 - Business Day

Namibia faces power shortages
Nampower has announced that the country will face electricity shortages over the next four years due to delays in a major gas-to-power project and will be forced to rely on smaller solar and wind energy projects to assist with the 400 MW deficit.

The Kudu gas field was discovered more than three decades ago by Chevron, but London-listed Tullow Oil recently withdrew from an agreement signed in 2004 to help pipe the gas 170 km (100 miles) onshore to fuel an 800 MW power station. In order to overcome the envisaged energy crunch, Nampower CE Paulinus Shilamba said the government expected to give the final go-ahead in February to a 250 MW gas-to-power plant at Erongo on the Atlantic coast. Erongo is estimated to cost $300-million and be operational by mid-2016, but will not cover a cumulative energy shortfall of 400 MW forecast between now and 2018.

Namibia has ambitions to become the world's second largest uranium producer, but normally imports more than half of its power from neighbouring countries within the Southern African power pool, who themselves are battling to keep the lights on.

2 December 2014 - Engineering News

Accident at Ukraine nuclear plant is no threat
On Wednesday 3 December 2014, an accident at a nuclear power plant in Zaporizhzhya, south-east Ukraine, was reported to pose no danger and the plant would be fully operational by 5 December 2014. The accident occurred on Friday 28 November due to a short circuit in the power outlet system and was in no way affiliated with power production. Zaporizhzhya is Europe's largest nuclear plant.

Interfax news agency said a 1000 MW reactor was housed in the bloc at Zaporizhzhya where last Friday's accident occurred. Energy Minister Volodymyr Demchyshyn said the affected bloc had been provisionally disconnected from the system though its reactor continued to work normally.

Ukraine produced more than 60 million tonnes of coal last year, making it self-sufficient in electricity and coal. Separatist fighting in the Donetsk and Luhansk regions since June has halted production at 66 coal mines, however, leaving Ukrainian power plants without enough raw materials.

4 December 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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