Energy Minister Dipuo Peters reported (…) that the Department of Energy (DoE) had received “concurrence” from the National Energy Regulator of South Africa for a Ministerial determination opening the way for the procurement of 7 761 MW of baseload capacity from independent power producers (IPPs) between now and 2025.

The baseload determination included the prospect of increased power imports, primarily from hydropower schemes in the Southern Africa region.

It was one of three determinations, with the second dealing with the procurement of 3 200 MW of additional renewable-energy capacity by 2020 and the third opening the way for co-generation projects and near-term gas developments.

Speaking at an event hosted to announce government’s and Eskom’s readiness to sign agreements necessary for the construction of the first 28 renewable-energy projects being procured under the Renewable Energy Independent Power Producer Programme (REIPPP), Peters said details would be promulgated in an upcoming Government Gazette, which would be published during November.

Three separate procurement process, incorporating lessons learned during the delayed first REIPPP bid window, would follow.

COAL, GAS & HYDRO

The first determination related to baseload generation capacity and included 2 500 MW of coal-fired generation for introduction into the system by 2024; 2 652 MW of gas power by 2025, some of which would probably be imported; and 2 609 MW of hydroelectric power imports by 2024.

The base-load allocations were informed by a request for information issues last year and were aligned with the Integrated Resource Plan (IRP) 2010-2030.

The current version of the IRP, which is likely to be revised during 2013, anticipates coal’s contribution falling from more than 90% of the current mix to about 45.9% by 2030. However, 16 300 MW of additional coal-fired generation would still need to be added by 2030.

Also envisaged under the current IRP is the introduction of 9 200 MW of wind generation, 1 200 MW of concentrated solar power (CSP), 8 400 MW of solar photovoltaic (PV) production, 9 600 MW of new nuclear capacity, 4 930 MW of open-cycle gas-turbine peaking plant capacity, 2 370 MW of combined-cycle gas-turbine capacity, a 1 332 MW pumped-storage scheme, 2 659 MW of imported hydropower and 465 MW of mostly other renewables technology.

DoE deputy director-general Ompi Aphane said the primary aim of the process was to leverage IPP investment to deal with South Africa’s current electricity supply/demand imbalances.

However, Aphane said that it was possible that Eskom could emerge as a co-developer of hydropower schemes outside South Africa, while possibly playing a role in the development of the regional transmission networks required to evacuate the power.

Eskom CEO Brian Dames reported recently that the utility had finalised a draft Africa strategy, which could result it in taking equity as well as operational positions in generation and transmission projects on the rest of the continent.

Dames indicated that the utility was particularly interested in some of the near-term hydropower prospects in Mozambique, such as Mphanda-Nkuwa and Cahora Bassa North Bank.

ROLLING RENEWABLES

Peters also confirmed that the REIPPP would be extended into a rolling procurement programme, with an additional allocation of 3 200 MW to be added for projects that could be developed by 2020.

Through the REIPPP, which was launched in August 2011, government was initially planning to procure 3 725 MW of renewables capacity, collectively valued at around R100-billion.

However, 2 460 MW of that allocation had been absorbed during two bid windows, during which 47 projects were identified as preferred bidders – leaving only 1 165 MW still to be allocated during the third bid window.

With the addition of 3 200 MW into the REIPPP, a total of 4 360 MW of capacity would be available for allocation during future bidding rounds.

A total of 1 470 MW had been allocated for onshore wind, 400 MW for CSP, 1 075 MW for solar PV projects, 47.5 MW for biomass, 47.5 MW for biogas, 60 MW for small-scale hydro, and 100 MW for small-scale renewables projects.

The third determination related directly to interventions contained in the Medium Term Risk Mitigation Plan, which was published alongside the IRP in early 2011 in a bid to deal with South Africa’s short-term power deficits.

Peters said this determination allocated 800 MW for cogeneration, and 474 MW from natural gas, which must be introduced between 2012 and 2020.

Edited by: Creamer Media Reporter, in Engineering News, 29 October 2012

South Africa would spend as much as R4-trillion on infrastructure development projects over the next 15 years, President Jacob Zuma said at a Presidential Infrastructure Investment Conference, in Sandton, on Friday.

He said some of these projects would have to be paid for by the private sector, such as industrial projects connected to infrastructure. The State would invest about R844-billion on infrastructure developments over the next three years.

Economic Development Minister Ebrahim Patel told journalists at the conference that the 20-year National Infrastructure Development Plan was radically different than previous initiatives as it was geared towards attracting and facilitating investment, while reaching across all provinces. The plan was aimed at constructing new projects and expediting existing ones to enable economic and social development.

The plan clusters 645 infrastructure projects into strategic integrated projects, or Sips, which now numbered 18 following the recent addition of a Water and Sanitation Masterplan.

Deputy President Kgalema Motlanthe said implementation of the projects would be the most challenging. He called on industry to partner with government in achieving the country’s development goals. “The rationale behind this approach is to do away with the bureaucratic properties and expedite the implementation part of our work.”

Zuma stated that South Africa should use what it had learned in terms of project management with its hosting of the 2010 FIFA World Cup to successfully implement the National Infrastructure Development Plan.

"The failure to invest in basic services in black communities over the decades of colonial oppression and apartheid is a critical element in the persistence of inequality today."

He added that although the country still had a long way to go, it had made progress in improving and creating infrastructure over the past 18 years, since the advent of democracy.

Zuma further said local sourcing of construction materials for infrastructure development projects would contribute to manufacturing in South Africa, adding to job creation. The President stressed the importance of collaboration between government, labour and the private sector in achieving the goals set by the infrastructure plan.

At the conference, various memoranda of understanding (MoUs) between the State and social partners were signed, including an MoU between the government; business associations, including Business Unity South Africa and the Black Business Council; labour organisations, including the Congress of South African Trade Unions, the Federation of Unions of South Africa and the National Council of Trade Unions; as well as community organisations consisting of the South African National Civic Organisation, the Women’s National Coalition, the South African Youth Council and various organisations represented by the National Economic Development and Labour Council.

The parties committed to pursue the formalisation of a partnership to support the implementation of the National Infrastructure Development Plan.

In addition to laying the foundation for long-term growth, as well as social and economic development, the plan also formed part of the measures to counter the impact of the struggling global economy on South Africa.

“Given that our economy is so intertwined with the global economy, especially in terms of trade, we have to work on measures to stay afloat,” Zuma said.

In Engineering News, 19 October 2012

South Africa remains the most competitive economy in sub-Saharan Africa, according to the World Economic Forum's Global Competitiveness Report 2012/13 released on Wednesday.

"South Africa is ranked 52nd this year, remaining the highest-ranked country in sub-Saharan Africa and the third-placed among the BRICS economies," the WEF said in a statement. South Africa ranked 50th in the 2011/12 report.

The country benefits from the large size of its economy, particularly by regional standards, the WEF said. It ranks 25th out of 144 economies in the world in terms of market size.

"Particularly impressive is the country's financial market development (3rd), indicating high confidence in South Africa's financial markets at a time when trust is returning only slowly in many other parts of the world," the WEF said.

South Africa did well on measures of the quality of its institutions and on intellectual property protection (ranking 20th), property rights (26th), the accountability of its private institutions (2nd), and its goods market efficiency (32nd).

South Africa does "reasonably well in more complex areas" such as business sophistication (38th) and innovation (42nd), benefiting from good scientific research institutions (34th) and strong collaboration between universities and the business sector in innovation (30th).

"These combined attributes make South Africa the most competitive economy in the region."

The WEF said to improve its competitiveness, South Africa needed to address some weaknesses.

"South Africa ranks 113th in labour market efficiency (a drop of 18 places from last year), with rigid hiring and firing practices (143rd), a lack of flexibility in wage determination by companies (140th), and significant tensions in labour-employer relations (144th)."

The country also needed to increase its university enrolment rate to better develop its innovation potential. "Combined efforts in these areas will be critical in view of the country's high unemployment rate of almost 25% in the second quarter of 2012."

Although South Africa's infrastructure was good by regional standards, it needed upgrading (63rd).

The WEF pointed out that the poor security situation remains another important obstacle to doing business in South Africa. "The high business costs of crime and violence (134th) and the sense that the police are unable to provide sufficient protection from crime (90th) do not contribute to an environment that fosters competitiveness."

The health of the workforce, ranked 132nd out of 144 economies, was concerning.

Switzerland tops the overall rankings, with Singapore second, and Finland in third position. They are followed by Sweden, Netherlands, Germany, the United States, the United Kingdom, Hong Kong and Japan in the top 10.

Among the BRICS, the People's Republic of China (29th) continues to lead the group. Brazil is ranked 48th, South Africa 52nd, India 59th and Russia 67th.

SA - the Good News via SAPA, Wednesday, 05 September 2012

State-owned freight logistics group Transnet took delivery of its new multiproduct pipeline (NMPP), which runs between the coastal city of Durban and Jameson Park, near Heidelberg, south of Johannesburg. The pipeline, which would be commissioned in stages over the coming 18 months, is currently handling the delivery of diesel fuel to South Africa’s economic heartland of Gauteng.

The NMPP, which has been designed to handle various transport fuels, would eventually replace the aged Durban-to-Johannesburg pipeline, which was completed in 1965 and was nearing the end of its economically usable life.

The 555-km, 24-inch NMPP would initially work in conjunction with the old pipeline, until Terminal 1 at Island View, in Durban, and Terminal 2 at Jameson Park were fully completed in 2013.

The first product began flowing into the Gauteng fuel pipeline network, which connects at Jameson Park, when Transnet group CEO Brian Molefe opened a valve on the NMPP.

The Gauteng fuel pipeline network had also been upgraded in conjunction with the construction of the trunk line. This secondary network comprises a 16-inch pipeline network, linking Gauteng fuel depots between Kendal and Waltloo, Jameson Park and Alrode and Alrode and Langlaagte.

“We have completed one of the most cutting-edge and innovative infrastructure investments in the world. Transnet is today fulfilling two commitments, by ensuring that the inland market demand for fuel is met, and to ease road congestion by reducing the number of fuel tankers on our roads,” Molefe said.

However, Molefe also indicated that the pipeline’s price tag of R23.4-billion would now need to be recovered. In addition to last year’s pipeline tariff increase 59.9% Transnet had already applied to the National Energy Regulator of South Africa for a further 22% increase.

The state-of-the-art pipeline would transport refined fuel products such as unleaded 93 and 95 octane petrol, low sulphur and ultralow sulphur diesel and jet fuel at a rate of about three-million litres an hour. The capacity of the line would be 26.7-billion litres of fuel a year.

Currently the pipeline uses three pumping stations, namely Tweni in Durban, Hilltop near Pietermaritzburg and Mnambithi pump station near Ladysmith. Two metering stations are also included.

Transnet pipelines CEO Charl Möller pointed out that the project had been designed with expansion in mind.

“The pipeline would be upgraded in five phases up to 2032 with the addition of more pumping stations and metering stations along the trunk line. In this way we would be able to expand the pipeline capacity by up to 200%, to keep up with the expected demand growth,” he said.

He added that although the pipeline could currently only operate at half of its Phase 1 desing capacity, owing to the storage terminal at Jameson Park not being finished, and could also only carry a single product, the pipeline would come into its own once the terminals came on line.

The completed pipeline, as well as the two terminals under construction, had been designated as national key points, which would help ensure fuel supply security. The NMPP would also be able to provide fuel product for three days, should there be a supply interruption.

The pipeline was expected to be economically active for the next 80 years and provide permanent jobs for at least 110 people.

The project used a groundbreaking technology to prime the completed empty pipe, using nitrogen to counter backpressure encountered on the steep downgrades where the pipeline comes down Van Reenen’s pass on the escarpment. It was also dried at -20 ˚C, to ensure that no water or other liquids remained in the pipe that could lead to contamination.

Further, the pipeline, which is constructed form the highest available grade steel, was laid in 1.5-deep trenches along most of its route, except where it had to cross other existing infrastructure and rivers, as well as a number of large ecologically sensitive wetlands.

Source: Engineering News, 11 January 2012