The energy debate in South Africa (SA) is complicated. We are living on a continent where it is estimated that approximately 590 million people have no access to electricity, with about 3 million of those people living in SA. Add to our capacity woes the fact that energy contributes close to 80% of the country’s total greenhouse gas emissions, of which 50% is from electricity generation and liquid fuel production alone, and we have a serious challenge on our hands.
The need for SA to diversify its energy mix was realised as far back as 1998 in the White Paper on Energy Policy. This was updated in 2003 in accordance with SA’s commitment to the Paris Accord. In 2010, the Integrated Resource Plan (IRP2010) was developed, detailing various technology targets to be achieved by 2030.
To effectively implement the vision set out in the IRP2010, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was launched in 2011. Its purpose was to procure alternative, sustainable energy while contributing to social and economic development in SA. The ultimate target – to produce 17 800MW of electricity from renewable energy sources.
Globally the REIPPPP has received recognition for its transparency, innovation and contribution to local economic development as it sets out to establish private-public partnerships through a competitive tender system that ensures fair energy pricing.
The Energy Blog details 92 Independent Power Producer projects that have been awarded in four bidding rounds as part of the REIPPPP. In rounds 3 and 4, ACTOM played a leading role in the production and supply of products for “balance of plant”. The value of these contracts amounted to over R300-million and were awarded to High Voltage Equipment, Power Transformers, Distribution Transformers, MV Switchgear, Static Power, Protection and Control and Electrical Products.
“There is a great deal of opportunity for ACTOM as a supplier to companies awarded projects by the REIPPPP,” said Colin FitzRandolph, Director – Actis Energy Infrastructure. He went on to explain: “It is a requirement of the programme for a minimum percentage of product to be locally sourced. By partnering with ACTOM – a market leader and local manufacturer – projects are able to meet these commitments and are confident in ACTOM’s robust and reliable products.”
As a direct result of the implementation of these projects, 6 329MW of renewable energy has been procured of which 3 876MW was connected to the grid. The IRP was always viewed as a working document, to be updated as energy needs changed and technology developed. The latest version was released in October 2019.
Coal will continue to play the largest role in electricity generation due to its abundant availability in SA. The new plan refers to a “business case” for smaller plants of between 300MW and 600MW. Coal is expected to contribute an additional 1.5GW of power, but there will still be a net drop in power produced by coal as a result of the decommissioning of Eskom coal-fired power stations which will reach the end of their commercial and operational lives. Another concern is the closing of plants that do not meet air quality regulations.
Highlighted in the plan is government’s intention to fund research into clean coal technologies such as High Efficiency Low Emission (HELE) technology, including supercritical and ultra-critical power plants with Carbon Capture and Utilisation and Storage (CCUS). While CCUS had been developed for power plants, few operate using this technology and it is extremely expensive.
After coal, wind is expected to contribute the next highest percentage to the energy mix. SA has fair wind potential with 36 recognised renewable wind farms of which 24 are fully operational and the remainder either under construction or awaiting construction.
SA’s rivers carry potential for run-off river hydro projects. In round 2 of the REIPPPP two small hydro projects were awarded and both are fully operational. Round 4 saw the awarding of one more small hydro project which is awaiting construction. SA has also entered into a treaty for the development of the Grand Inga Project in the Democratic Republic of Congo (DRC), with some of the power intended for transmission to SA. This project has been under construction for more than 10 years and the IRP2019 notes that the DRC has not yet concluded the work needed for SA to begin receiving electricity by the agreed deadline in 2023.
Renewable solar projects in SA include both photovoltaic (PV) and concentrating solar thermal (CST) which will contribute around 6% to the energy mix. Most areas in SA average more than 2 500 hours of sunshine per year, and average solar-radiation levels range between 4.5 and 6.5kWh/m² per day. The annual 24-hour global solar radiation average for SA is about 220W/m², compared to 150W/m² for parts of the USA, and about 100W/m² for Europe and the UK making SA’s local natural resource one of the highest in the world.
The Eskom-owned nuclear plant, Koeberg, reaches the end of its operating life in 2024, but due to its reliability and the clean nature of the energy produced, an application to extend operations to 2044 is planned. This will require an immediate undertaking to achieve the necessary technical and regulatory requirements for such an extension.
Nuclear power is very expensive to commission and decommission and projects typically only deliver power 20 years after build phase. Some serious media debate ensued in mid-June when the Minister of Mineral Resources and Energy, Gwede Mantashe, issued a request for information for a 2 500MW nuclear build programme. This, after the IRP2019 documented that a nuclear build programme would only be considered “at a pace and scale that the country can afford”.
Other renewables that form part of SA’s energy mix include biomass and landfill gas, but these take place on a much smaller scale with only two biomass projects awarded, one of which was halted/aborted, with only a single landfill gas project currently operating in Gauteng.
However, the generation of electricity and heat through biomass and biogas holds huge potential in SA with this technology being developed by a number of the ACTOM businesses as featured in previous issues of What’s Watt.
The future for renewables in SA looks promising and although many agree that the process of implementation could be faster, others argue that getting it right is equally as important.
ACTOM is currently building its renewable energy capability through the provision of “balance of plant” supplies. Mervyn Naidoo, ACTOM CEO explains how ACTOM intends to further develop this capability, “The renewable energy sector has limitless opportunities for ACTOM, but we are also mindful of the complexity involved in such projects. Initially we have supplied locally manufactured components to various renewable energy projects. However, there is a far greater opportunity for us to be more involved in the new rounds of renewable projects through a more collaborative approach across our businesses. As such we have appointed a renewable energy systems’ expert consultant, Leon Drotsche, to leverage these opportunities.”
Leon explained how, in the past, the whole move towards green technology and renewables was pushed primarily by those with green agendas, but that now, through technology advancement and cost efficiencies, this technology is increasingly sought after in a highly competitive market.
“The advantage that ACTOM has in the renewable space is their specialised expertise and understanding of the various intricate elements of energy generation, transmission and distribution. But possibly, more importantly, the integration capability to pull together existing expertise and the latest technology to provide efficient, end-to-end smart solutions,” said Leon.
This, together with their long-standing business partnerships with key industry players, their local footprint and manufacturing capability, as well as innovative solutions suited to local market conditions gives ACTOM a competitive advantage.
In a previous State of the Nation Address, President Cyril Ramaphosa committed to “significantly increase generation capacity outside of Eskom”. Some key elements of his address, in his own words, included:
- l “A Section 34 Ministerial Determination will be issued shortly to give effect to the Integrated Resource Plan 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal.
- l The National Energy Regulator will continue to register small scale distributed generation for own use of under 1MW, for which no license is required.
- l The National Energy Regulator will ensure that all applications by commercial and industrial users to produce electricity for own use above 1MW are processed within the prescribed 120 days.
- l We will open bid window 5 of the renewable energy IPP and work with producers to accelerate the completion of window 4 projects.
- l We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants.
- l We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers.”
These measures highlight further opportunity for ACTOM’s involvement in energy storage development and smaller scale EPC projects. The challenge with energy from solar and wind farms is that they rely on the sun and wind which isn’t always available. Storing excess energy for when it is needed is critical, especially as more wind and solar projects come online. Utility scale energy storage is evolving to fill this gap, resulting in more sustainable renewable energy sources, coupled with various capabilities to support the electrical network. ACTOM realises huge potential in Battery Energy Storage Systems (BESS) technology and will include this technology solution in its balance of systems offering. Technologies such as battery systems, compressed air energy storage, flywheel energy storage, hydrogen fuel cells etc. have been highlighted as a priority in the IRP2019.
“ACTOM already actively manufactures battery related systems and is continually researching, developing and testing technology in this field. But we believe our approach to, and development of, management systems that integrate renewables to conventional electricity networks is what will set us apart,” commented Leon.
We have largely touched on developments in energy generation and mentioned storage and integration, but would there be any opportunities in energy transmission and distribution for ACTOM?
Eskom has a well-established electricity network and will still hold the key responsibility of transmission and distribution. However, the need for off-grid and micro-grid technology has been acknowledged as a solution for areas so remote that it is not cost effective to extend grid infrastructure. The IRP2019 calls for the necessary acceleration of these options and ACTOM is actively pursuing the commercialisation of micro- and pico-grid technology.
“ACTOM keenly awaits the request for proposals for round 5 of the REIPPPP particularly because of the higher transformation, localisation and community upliftment requirements expected to be included. We are confident of our position as value-add suppliers and also believe we have structured the business in such a way as to take further advantage of the opportunities that present themselves,” commented Mervyn Naidoo. It is ACTOM’s strategy to support traditional energy generation but as a parallel process, to actively pursue opportunities in renewables.