Mining companies are starting to heed the transition towards a low-carbon future by investing in wind energy, solar and gas.
This was relayed at the annual African wind energy summit, the Windaba, in Cape Town, on Wednesday.

Gold Fields VP and group head of carbon and energy Tsakani Mthombeni said the gold miner was gradually transitioning towards a low-carbon and renewable energy environment.

“Ten years ago, you would not have heard anyone talk about renewables in mining, but things are changing. Financiers locally and globally are coming under pressure to be seen and to be funding low carbon projects,” Mthombeni told a special session on mining. 

This week, Gold Fields became the first mining company in South Africa to publish its first Task Force on Climate-related Financial Disclosures (TFCD) report to improve its disclosure of climate-related information to investors and other stakeholders. 

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Transition to a cost effective and fossil carbon-free energy system is imminent for South Africa, so is the mitigation of issues associated with the ‘water-energy nexus’ and their consequent impacts on the climate.
The country’s key fossil carbon mitigation option lies in the energy sector, especially in shifting away from the coal-dependent power system. Pathways towards a fully decarbonised and least cost electricity system are investigated for South Africa. The energy transition is simulated for five scenarios, assessing the impact of various factors such as sector coupling, with and without greenhouse gas (GHG) emission costs. South Africa’s energy transition is simulated using an hourly resolved model until 2050. This modelling approach synthesises and reflects in-depth insights of how the demand from the power sector can be met. The optimisation for each 5-year time period is carried out based on assumed costs and technological status until 2050. The modelling outcomes reveal that solar PV and wind energy, supplying about 71% and 28% of the demand respectively in the Best Policy Scenario for 2050, can overcome coal dependency of the power sector. The levelised cost of electricity increases just slightly from 49.2 €/MWh in 2015 to 50.8 €/MWh in the Best Policy Scenario, whereas it increases significantly to 104.9 €/MWh in the Current Policy Scenario by 2050. Further, without considering GHG emissions costs, the cost of electricity slightly increases from 44.1 €/MWh in 2015 to 47.1 €/MWh in the Best Policy Scenario and increases up to 62.8 €/MWh in the Current Policy Scenario by 2050. The cost of electricity is 25% lower in the Best Policy Scenario than in the Current Policy Scenario without factoring in GHG emissions costs and further declined to 50% with GHG emissions costs. The Best Policy Scenario without GHG emissions costs led to 96% renewables and the remaining 4% is supplied by coal and gas turbines, indicating pure market economics. The results indicate that a 100% renewable energy system is the least-cost, least-water intensive, least-GHG-emitting and most job-rich option for the South African energy system in the mid-term future. No new coal and nuclear power plants are installed in the least-cost pathway, and existing fossil fuel capacities are phased out based on their technical lifetime.

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Long-term sustainable growth and development in South Africa will require a transition away from the country’s current coal-intensive energy system and economy towards an economy backed by an environment-friendly and renewable energy system.

The country is highly dependent on coal and is energy intensive. This plays out in an economy marred by a considerably high level of unemployment and inequality. Therefore, a transition is needed, speakers said during an Southern Africa-Towards Inclusive Economic Development workshop, in Pretoria, on Wednesday.

The workshop explored scenarios for South Africa’s transition from a coal-intensive energy system and economy towards a climate-friendly and renewable energy system.

Speakers at the workshop noted that while there was no clear, concrete picture of what this future system would entail, it was vital that the country was planning to move towards such a system.
Speaking at the workshop, University of Cape Town economist Faaiqa Hartley emphasised the importance of including renewables in the country’s energy mix.

She indicated that when not constrained, renewable energy presented a source of primary production of electricity.

Moreover, she highlighted that renewables allowed for considerable decarbonisation of the power sector.

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.

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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.

Microgrid solution

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.

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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.”
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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.

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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.
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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.

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F​inancially-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."

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