The respected head of South Africa’s Independent Power Producer (IPP) Office, Karen Breytenbach, has confirmed to Engineering News Online that she has been asked to vacate her position by the Department of Energy (DoE) and the Development Bank of Southern Africa (DBSA).
News of her departure was revealed in a Tweet on Monday afternoon by Anton Eberhard, who is emeritus professor and senior scholar at the University of Cape Town’s Graduate School of Business. He also heads up the Eskom Sustainability Task Team, appointed by President Cyril Ramaphosa to offer solutions to Eskom’s financial crisis.
Since 2011, Breytenbach has overseen R209-billion investment in 112 renewable-energy projects with “zero corruption”, Eberhard noted in his Tweet.
Breytenbach, 61, subsequently told Engineering News Online that she had indeed been asked to leave and that the DBSA and the DoE had indicated that an acting head of the IPP Office would be appointed until a permanent head was secured.
She said no reason was given as to why she was being asked to leave.
Earlier this year, an advert bearing the logos of the DBSA, the DoE and the National Treasury was placed in several national newspapers calling for applicants to apply for the position of IPP Office head.
When questioned about the advert at a media conference in April, former Energy Minister Jeff Radebe said that Breytenbach had his full support and would be continuing in the position.
It is understood, however, that, when Breytenbach’s contract expired in February, she was initially reappointed until the end of March and then until April 2020.
However, she has not been paid for the past five months and received a letter on Monday July 22 indicating that she was no longer the head of the IPP Office.
In his July 11, Budget Vote address, Mineral Resources and Energy Minister Gwede Mantashe reported that the DoE was working closely with the DBSA to “transition the current IPP Office into a legal entity that will continue to execute the mandate of the department in bringing about security of energy supply”.
He added the conversion of the office into that of a “juristic institution” would ensure "stability" at the office, as well as “proper accountability of the IPP Office” to the executive of the department.
Breytenbach is held in high regard both locally and globally for having overseen the development and roll-out of South Africa’s Renewable Energy Independent Power Producer Procurement Programme, which is regarded as one of the best renewables competitive bidding programmes internationally.
Companies compelled to consider alternative power sources to ensure business continuity.
Green buildings are increasingly in demand in the face of concerns around Eskom’s ability to sustainably supply power.
At the recent African Utility Week conference, energy minister Jeff Radebe told delegates that “Eskom alone cannot meet our power capacity requirements, because we estimate that the capacity extension under the Integrated Resource Plan (IRP) will cost in excess of R1 trillion in the period up to 2030, including the new power plants plus the requisite transmission and distribution infrastructure”.
Property company Redefine recently noted that installing renewable energy interventions is an area with scope for growth, notably to alleviate some of the pressure caused by Eskom’s blackouts and tariff increases.
For the six months to February 2019, Redefine saw total solar photovoltaic (PV) capacity increase to 23.5 megawatt-peak (MWp; power output at rated laboratory conditions) across its property portfolios. The property company says green buildings remain a key development priority in line with creating a sustainable business.
Green buildings offers a multitude of benefits
“Our green buildings benefit our business, our tenants and our environment by utilising the latest technology across designs, drawing less power from the grid, reducing our carbon footprint, and optimising operational costs,” says CEO Andrew König.
Pieter Strydom, commercial asset manager at Redefine Properties, says that while Sandton has an oversupply of office space, well located prime grade green buildings remain in demand, keeping vacancy in that market segment low.
“While traffic remains the key detractor in the Sandton node, new builds offer amenities, accessibility to transport and efficient green-building designs,” he notes.
Global move towards renewable solutions
Oil giant Total launched a programme two years ago to equip about 5 000 of its service stations globally with solar power by 2021.
Around 53 Total service stations in South Africa currently run on solar energy.
Pierre-Yves Sachet, chief executive of Total South Africa, says as the global population and its energy requirements continue to grow, the need for responsible energy consumption becomes more dire. The fourth-largest gas and oil company in the world, Total operates three solar farms in the Karoo and has plans to expand its solar production footprint in South Africa.
Marco Rahner, Siemens country manager for Kenya and the East Africa hub, says the company launched a microgrid solution last year that won an award for the Digital Solution of the Year. “Distributed energy systems (DES) technologies offer building owners and energy consumers opportunities to reduce cost, improve reliability and secure additional revenue,” he says. “Siemens is able to offer an end-to-end solution looking at making buildings greener, while also assessing the clients’ power requirements and installing a microgrid solution.”
Rahner explains that the Siemens solution includes a microgrid controller that stabilises the grid in the event of an outage and allows for cost-optimised energy consumption.
Siemens recently signed up to develop an expandable microgrid solution for an industrial and business park in Ghana called WestPark. As part of the agreement, Siemens will develop a 250 kilowatt (kW) microgrid that controls the energy generation and throughput for the initial phase of buildings to be constructed at WestPark.
Renewable energy provides solutions for the challenges associated with power generation, as the price of photovoltaics and wind energy technologies have gone down owing to the increase in the efficiency of the technologies, says Stellenbosch University Centre for Renewable and Sustainable Energy Studies (CRSES) director Professor Sampson Mamphweli.
“South Africa has a lot of solar radiation that can be converted through solar photovoltaics and concentrated solar power technologies. The country also has a lot of biomass materials that can be used to provide bioenergy. Wind is also prominent around the coastal areas. There is also space for technology localisation, which will then result in job creation.”
He further tells Engineering News that, with the cost for renewable energy having decreased, it has allowed for an increase in the number of installations by industry and households.
Moreover, he mentions that renewable energy is a viable option, especially with State-owned power utility Eskom facing a challenge in the mismanagement of its generation division, specifically regarding the maintenance of the fleet of coal-fired power stations, which are ageing and require maintenance regularly.
However, Mamphweli adds that the unbundling of Eskom into three separate divisions is a step in the right direction.
It is important that Eskom gets unbundled into generation, transmission and distribution, with generation being partially privatised but still regulated by the National Energy Regulator of South Africa. “This will ensure efficient running of the generation division,” he concludes.
The Council for Scientific and Industrial Research (CSIR) has found that renewable energy helped combat load-shedding in the first quarter of 2019.
The CSIR said that variable renewable energy (VRE) helped to relieve pressure on the South African power grid and was a major factor in avoiding further load-shedding.
Causes of load-shedding during 2019 have been cited as unplanned plant failures combined with the loss of imported power from Mozambique.
This resulted in the most intensive load-shedding ever experienced in the country, with 595GWh shed in March alone.
The CSIR noted that renewable energy contributed 2,975GWh (5.3%) to the South African power system in the first quarter of 2019, proving instrumental in combating the severity of load-shedding.
“Without the variable renewable energy fleet, load-shedding stage 5 and 6 could have been invoked,” the CSIR said.
The graph below details the effect of renewable energy on the load-shedding crisis in South Africa in Q1 2019.
Lingering policy uncertainty and regulatory delays are continuing to impede the development of hundreds of small-scale embedded generation (SSEG) projects, which are seen at the quickest and cheapest way for South Africa to address its current electricity supply deficit.
The South African Independent Power Producer Association (SAIPPA) estimates that between 2 500 MW to 3 500 MW of capacity is being constrained as a result of the problem and that 30 MW to 50 MW could be added monthly once coherent processes are instituted.
The prevailing policy framework and regulatory processes remain deeply problematic and are affecting both small plants below a capacity threshold of 1 MW, as well as larger SSEG projects.
In fact, the South African Photovoltaic Industry Association (SAPVIA) has identified just over 280 MW from projects under 1 MW and about 600 MW from projects between 1 MW and 10 MW that are currently built, but not operating, as a result of regulatory gridlock.
Although sub-1 MW plants have been exempted from the theoretical burden of licensing, they are currently tied up in red tape arising from a November 2017 Licensing Exemption and Registration Notice published in terms of the Electricity Regulation Act (ERA). Issued by the Department of Energy (DoE), with the National Energy Regulator of South Africa’s (Nersa’s) concurrence, the notice amended Schedule 2 of the ERA.
Both the DoE and Nersa acknowledge the notice is “flawed” and the DoE sent an updated notice to Nersa for its concurrence in late 2018.
The updated notice exempts projects below 100 kW from any form of registration and instead directs municipal distributors to keep a register of such facilities. Plants between 100 kW and 1 MW in size are required to register with Nersa and pay a R200 registration fee.
Financially-constrained power utility Eskom has signed a $180 million loan agreement with the New Development Bank (NDB) for a renewable energy integration and transmission augmentation project.
Under the agreement, the NDB will provide a loan with sovereign guarantee to Eskom. The NDB was established by Brazil, Russia, India, China and SA to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
The loan facility comes at a time Eskom is struggling to keep the lights on. President Cyril Ramaphosa recently said the severe financial and operational challenges being experienced by Eskom are as a result of a number of factors, from state capture to poor maintenance of its power plants.
The loan agreement was signed by Xian Zhu, NDB vice-president and chief operations officer, and Calib Cassim, chief financial officer of Eskom.
The NDP's Project Finance Facility (PFF) will be used to support the development of grid connection infrastructure, which is vital for the development of renewable energy projects, says Eskom.
It adds the PFF will support renewable energy development and reduce the country's reliance on fossil fuels.
The project will integrate a total of 670MW of renewable energy into Eskom's grid. Modern grid connection infrastructure will be used for renewable energy projects and augmentation of the Eskom transmission network to the identified areas.
The project will also help increase electricity supply to the targeted areas for sustainable development.
According to the power utility, the project will enhance the country's capacity for renewable energy while achieving sustainable growth. It also aligns with the bank's focus to support projects that aim at developing renewable energy sources.
"We are happy to support this important project that will contribute to the development of grid connection infrastructure in South Africa and support the shift to a more sustainable energy path in the country," says Zhu.
"The project is coherent with the bank's focus on projects that incorporate sustainability from their inception. Moreover, we believe that supporting South Africa's energy sector is fully in line with the bank's mandate and our role as a reliable development partner."
Eskom's Cassim says: "The successful conclusion of this inaugural transaction with NDB will significantly contribute towards driving Eskom's goals to reduce South Africa's CO2 emissions.
"Eskom welcomes the support from NDB and we look forward to fostering a valuable partnership with this organisation whose mission is to enhance infrastructure for sustainable development in its member countries."
Commenting on the deal, Brenda Martin, chairperson of renewable energy industry body, the South African Wind Energy Association, says Eskom's role and duties as sole purchaser of power has been reinforced by government and the courts since early 2018.
This after the power utility had for some time been blamed for delaying the signing of renewable energy projects. The 27 outstanding power purchase agreements were eventually signed last year.
"With construction for Round 4 projects now under way and with the urgent need for new additions of power, the industry anticipates Eskom will recognise the need to fulfil its mandate to government and South Africa and not inhibit further investment in renewable energy," says Martin.
She adds that while the private sector covers significant costs of connecting to the grid up to the point of connection, Eskom as owner of the grid has to cover its own costs routinely associated with additions of new power such as deep connection costs.
"These routine operating costs for the grid owner are recoverable in the tariff. In a power system where the utility is a vertically integrated monopoly, this is quite routine. This is another reason why restructure of the SA power system is advisable."
While load-shedding is expected to continue plaguing South Africa for at least the next six months, Council for Scientific and Industrial Research (CSIR) energy systems senior engineer Joanne Calitz has also warned consumers to expect electricity prices to increase by about another 36% by 2021.
This is drawn from a comparison over the past decade, which has seen energy prices in the country skyrocket from about 85c/kWh in 2008, to an anticipated R1.16/kWh in 2021.
This, she added, is equal to an increase of about 300% from 2008 to 2018 alone.
"These tariffs are the average Eskom tariff. As a residential customer, you would be more accustomed to the price range of around R1.50/kWh to R2/kWh. What this would mean for you by 2021, is that it will be around R2.50/kWh. This really speaks to the affordability of electricity for households going forward,” she said.
Calitz highlighted, moreover, that in just the first three months of this year, load-shedding across the country had amounted to 769 GWh. This is just over half of what load-shedding amounted to in 2015, she added.
March has been the most load-shedding-intensive month thus far, she pointed out, accounting for 595 GWh of the total 769 GWh of load-shedding.
Meanwhile, South African consumers are struggling to survive amid increased inflation, including of fuel prices and electricity tariffs, and CSIR principal engineer Dr Jarrad Wright on Thursday provided some tips to help mitigate load-shedding, while also saving on costs.
Firstly, Wright said energy efficiency would help consumers use less electricity, and in effect save on paying for it, by investing in their households.
He suggested the use of light-emitting diode (LED) lights; electric geyser blankets and/or pipe insulation; air conditioning set-point changes; and the installation of energy efficient and smart appliances for an overall reduction in electricity use.
These methods are some of the cheaper and most environment-friendly options, he explained, noting that consumers could expect to pay between R50 and R80 per LED light in the household; while consumers could expect to pay between R3 000 and R10 000 per energy efficient or smart appliance.
While the latter is more expensive, it will have the biggest impact.
The cheapest option, Wright noted, would be to adjust the air conditioning set point, which would cost the consumer nothing.
However, should consumers not have capital available in the short term, Wright suggested that consumers consider moving the use of electricity around to different times of the day. This would, in turn, assist the power system.
As an example, Wright highlighted the use of a timer on an electric geyser and pool pump.
Further, simple behavioural changes, such as changing the time at which one cooks, cleans or does washing, would have a larger impact on relieving pressure on the national grid.
“By just changing simple behaviours [like these], it would significantly reduce morning and evening demand, which is when the system is the most constrained”.
Should capital be available to the consumer, another option would be for the consumer to invest in generating their own electricity, which can be achieved through standby generators, rooftop solar photovoltaic (PV) installations, inverters for batteries or a combination of all three.
A court application to have 20-year power purchase agreements (PPAs) signed between Eskom and 26 independent power producers (IPPs) in 2018 declare null and void has been dismissed with costs.
The legal challenge was initiated last year by the Coal Transporters Forum (CTF), a voluntary association made of 50 companies that transport coal to Eskom power stations. The respondents to the application included Eskom, the National Energy Regulator of South Africa (Nersa), Energy Minister Jeff Radebe and more than 30 IPPs.
The CTF asked the court to interdict the signing of the PPAs, which arose from Bid Window 4 of South Africa’s Renewable Energy Independent Power Producer Procurement Programme.
The PPAs were signed on April 4, 2018, following a three-year delay brought about by Eskom’s refusal, made public in 2016, to enter into new contracts with renewable energy IPPs, despite the fact that the projects had been legally procured by government in 2015.
In his March 26 ruling, High Court Judge Pieter Meyer said that the CTF’s contention that the projects had not received a generation licences from Nersa had no merit.
eyer also dismissed the CTF’s contention that Eskom was not entitled to conclude the PPAs with the IPPs until the regulator had pronounced on several other issues, ranging from the tariffs agreed in the PPAs to the terms and conditions contained in the PPAs.
“All the parties in the know – the regulator, Eskom and the IPPs – testify that the regulator has taken the decisions in questions. CTF offer no evidence to the contrary,” the judgment reads.
“Finally, it bears mentioning that the process and procedure in challenging and setting aside an administrative action is by means of legality review proceedings, or review proceedings under the Promotion of Administrative Justice Act, and not proceedings wherein a party merely seeks that the contract concluded be set aside by a court of law or declared null and void,” Judge Meyer wrote. Source.....
See also... http://politicsweb.co.za/politics/dismissal-of-attempt-to-block-eskom-signing-on-ipp
DA leader Mmusi Maimane wants the government to allow billionaire Patrice Motsepe and other independent power producers (IPP) to contribute to the power grid.
The opposition leader was speaking to a small group of his party supporters outside Eskom's head offices in Megawatt Park, Sunninghill on Wednesday.
He said load shedding was the creation of an "ignorant" ANC government which did not want IPPs to function so that top Eskom officials could continue benefitting from the state-owned entity.
"During the national day of action, we will ensure that we communicate effectively that the ANC government has failed the people of South Africa and that we need a plan immediately that will ensure that we do not continue with load shedding. And if you want to keep the lights on, vote DA," Maimane said.
He stood on a ladder, which had been propped up against a pole, where he put up one of his party's posters.
Maimane added that South Africa was in a crisis and that load shedding was not helping the "grappling economy".
"Our view is that we must call upon all sectors of society and put together a plan to ensure that the grid is stabilised, and the immediate people to contact should be big energy producers, such as aluminium smelters."
He reiterated that Eskom should be broken into two entities - one for distribution and the other for generation.
The DA leader said ultimately, the distribution entity should be privatised so that other power producers could compete with it.
This is in contrast to the plan announced by President Cyril Ramaphosa in his State of the Nation Address stating that Eskom will be split into three separate state entities.
"The ANC will not face up to its own stakeholders... and wants to protect its own alliances, rather than the citizens," he said.
The DA's second deputy federal chairperson, Natasha Mazzone, who joined Maimane, added that "95% of the power on SA's grid was produced by a mismanaged power utility which does not have a secured baseline".
"Motsepe has got companies and he is not the only one [who has an interest in IPPs]... and given the chance, as soon as next week, [they could] start adding their energy into the grid," said Mazzone.
There were allegations that the IPP procurement programme bidding process, which is currently under way, is questionable.
But Energy Minister Jeff Radebe has dismissed this and at a press briefing in February, he said "the tender process is fair, open and transparent".
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