City of Joburg to issue a request for information for the construction of a 150MW solar plant, as well as 50 megawatts of rooftop solar panels

Africa’s financial capital, Johannesburg, has announced plans to meet 35% of its power needs from renewable energy sources, the municipality said in a presentation on Thursday. The City of Joburg will seek proposals for privately supplied renewable energy by August. Johannesburg is also gearing up to issue a request for information for the construction of a 150-megawatt solar plant, as well as 50 megawatts of rooftop solar panels.

The City of Joburg also plans to seek information for the installation of a 100 megawatts battery energy storage system (BESS).

South Africa’s state owned utility Eskom which supplies 95% of the country’s power needs has been battling to supply power to South African cities consistently. With persistent power blackouts known in South Africa as load shedding predicted to last for the next 5 years, many municipalities are now looking for alternative sources of power to plug the electricity supply gap. 

“We would need to go out to the market to ask for independent power producers for an expression of interest to find out how many of them are able to come with their own capital,” said Paul Vermeulen, chief engineer for renewable energy at City Power.

City Power, the municipality’s power utility, says it will enter into long term power purchase agreements with IPPs for the purchase of renewable energy. ​

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Joburg to utilise SA’s power sector reforms
The South African government this year announced amendments to the country’s electricity regulations to allow municipalities to purchase power from sources other than Eskom, effectively breaking the utility’s monopoly of power supply in South Africa. Many municipalities in South Africa including the City of Joburg have announced plans to utilise the amendments to the regulations and develop own generation capacity as well as procure power directly from IPPs.

The government is also amending the Electricity Regulation Act to allow for self generation systems of up to 10MW to be exempted from licensing by the regulator NERSA. A study by local think tank, Meridian Economics, found that up to 5 000 MW of additional generation capacity could be unlocked in the near term if South Africa raises the threshold by to 50 MW.

South Africa is hoping its power sector reforms will kick start its economic recovery process from the COVID-19 devastation and bring in much needed foreign direct investment. The government is rolling out a series of new procurement initiatives for renewable energy with an estimated 6,8GW planned for procurement over the next year. South Africa’s previous bid windows for renewable energy attracted around US$20 billion in investment in less than a decade.

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In South Africa, the Western Cape Government’s minister for finance and economic opportunities, David Maynier, formerly published a Request for Information (RFI) for their Municipal Energy Resilience (MER) Project.

Minister Maynier is calling on all potential private and public sector organisations, including Western Cape municipalities, to provide information on renewable energy projects that would develop into new generation capacity in the Western Cape.

Potential respondents are requested to submit an RFI Response Form in accordance with the instructions in the RFI that is available, free of charge, for download from 11 June 2021.

The last date for submission of the completed RFI Response Forms is 18h00 on 12 July 2021.
https://www.westerncape.gov.za/110green/files/atoms/files/WCG%20MER%20RFI.pdf
Enquiries should be directed to Adrian Rudolph via e-mail on Adrian.Rudolph@westerncape.gov.za

Maynier said: “This is an important step forward in our MER Project which was launched last year to support municipalities to take advantage of the new energy regulations to generate, procure and sell their own power so that we can become more energy secure in the Western Cape.”

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Information submitted through the RFI will enable the Department of Economic Development and Tourism to consider options and develop the strategic approach to assist municipalities in the Western Cape to develop and/or procure new electricity generation capacity from all types of renewable energy generation and supply systems and technologies, including self-generation, battery energy storage systems, as well as hybrid generation and storage solutions.

Maynier added: “The MER Project is just one of the many ways to build energy resilience and buffer businesses and households from the impact of loadshedding in the Western Cape.”

The minister emphasised that the announcement by President Cyril Ramaphosa on 10 June 2021 that Schedule 2 of the Electricity Regulation Act will be amended to increase the licensing threshold for embedded generation projects from 1MW to 100MW is a “welcome move that will boost our initiatives to build energy resilience in the Western Cape”.

He said: “To ensure we maintain momentum and move forward as quickly as possible, we need the Department of Mineral Resources and Energy to finalise Schedule 2 of the Electricity Regulation Act to provide further clarity and certainty to the market.

“We remain in an energy crisis and large-scale private sector participation in energy generation, in partnership with government, will be key to addressing the current shortfall in the Western Cape.”

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Government’s decision to increase the threshold for embedded private power generation could unlock investments of up R100 billion over the next five to seven years and add 15,000MW of capacity to South Africa’s strained electricity grid.

This is according to experts who spoke to Sunday newspaper Rapport about President Cyril Ramaphosa’s surprise announcement on Thursday that private companies and individuals will now be allowed to build generating projects of up to 100MW in capacity without a licence from the National Energy Regulator of South Africa.

The president said while measures taken by Eskom to maintain its ageing infrastructure and increase electricity availability in the county were positive and necessary, they were not enough to address the immediate and significant energy shortfall in the country.

“Incremental measures will not be sufficient to meet the scale of this challenge,” Ramaphosa said.

“This intervention reflects our determination to take the necessary action to achieve energy security and to reduce the impact of load-shedding on businesses and households across the country.”

Ramaphosa said this would also remove a significant obstacle to investment in embedded generation projects.

“Generators will also be allowed to wheel electricity through the transmission grid, subject to wheeling charges and connection agreements with Eskom and relevant municipalities.”

An amendment to the Energy Regulation Act giving effect to the new threshold will be gazetted in the next 60 days, Ramaphosa stated.

Cyril Ramaphosa South African President
Intellidex’s capital market investments head Peter Attard Montalto estimated that the investments could add a further 15,000MW of generating capacity.

To put this into perspective, Eskom currently has around 45,000MW of generating capacity.

The additional capacity would be roughly equivalent to the total supply which has been unavailable in recent days due to breakdowns of generating units and planned maintenance.

Eskom’s most recent load-shedding update on Friday showed the utility had 13,625MW of capacity unavailable due to breakdowns, while, 1611MW was offline for planned maintenance.

North-West University political analyst Piet Croucamp told Rapport the decision was made after a number of businesses and groups had met with the president at the Union Buildings over the past few weeks.

This included African Rainbow Capital’s Patrice Motsepe, mining groups, and Business Unity South Africa.

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President Cyril Ramaphosa has announced that government will lift the threshold for embedded generating electricity capacity from 1MW to 100MW, allowing households and businesses to privately build much bigger self-generating power.

“We are today announcing a significant new step in further reforming our electricity sector towards achieving a stable and secure supply of energy,” Ramaphosa said.

The president said that the increase to the embedded generating capacity threshold will be crucial in developing a response to the energy crisis that is ambitious, bold, and urgent.

“The amended regulations will exempt generation projects up to 100MW from the NERSA licencing requirement, whether or not they are connected to the grid,” stated Ramaphosa.

He said that this will remove a significant obstacle to investment in embedded generation projects.

“Generators will also be allowed to wheel electricity through the transmission grid, subject to wheeling charges and connection agreements with Eskom and relevant municipalities.”

However, Ramaphosa said that generation projects will still need to obtain permits to connect to the grid.

An increase in the threshold required for licencing has been recommended by energy analysts for years.

Ramaphosa said that government identified energy security as the most important enabler of economic growth.

“There is no doubt that the prospect of a continued energy shortfall and further load-shedding presents a massive risk to our economy,” he stated.

“Our ability to address the energy crisis swiftly and comprehensively will determine the pace of our economic recovery.”

Ramaphosa said that resolving the energy supply and reducing the risk of load shedding was South Africa’s single most important objective in reviving economic growth.

The president stated that Eskom was working hard to improve the performance of its existing fleet of power stations despite all the challenges that it was currently facing.

However, while these steps were positive and necessary, they were not enough to address the immediate and significant energy shortfall that threatens South Africa’s economic recovery.re to edit.

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“Incremental measures will not be sufficient to meet the scale of this challenge,” Ramaphosa said.

“This intervention reflects our determination to take the necessary action to achieve energy security and to reduce the impact of load-shedding on businesses and households across the country.”

Ramaphosa stated that this move should be seen as evidence of the government’s intention to tackle the economic crisis head-on, by implementing major economic reforms that will transform the South African economy.

“It also demonstrates our commitment as government to listen carefully to experts, to engage closely with our social partners, and to take on board new ideas to address our long-standing challenges,” Ramaphosa said.

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​Climate change can’t be ignored. Not when we can feel and see its effects all around us on a daily basis and have already experienced the economic, social and environmental impact. The City of Cape Town recognises the need for urgent climate action and has long been a leader in Africa for its climate mitigation and adaptation efforts. 

The city’s newly launched climate change response and resilience campaign, “Let’s Act. For a Stronger Cape Town”, aims to encourage residents, communities, businesses and organisations to join the call to help build a stronger, healthier, more equal and sustainable future-fit Cape Town. 

How climate change is affecting Cape Town:

Decreasing levels of average annual rainfall and changing seasonality of rainfall, which affects the amount of water to which we have access;
An increase in the average annual temperature and increased maximum temperatures, which means hotter days, and more frequent and intense heatwaves;
An increase in the average wind and maximum wind strength; and
Rising sea levels and increased coastal erosion.
Capetonians are familiar with the impact of climate change due to the drought experienced in recent years. But by working together, water use was reduced by 50% to avoid the worst. No other city in the world has managed to achieve this. Collaborative action is what we need to become stronger, more resilient and to help reduce the impact of climate change. 

There are many simple actions, some big and some small, that everyone can take to make the city stronger.

What is the city doing?

In support of the growing global momentum to tackle climate change, Cape Town and other cities — in SA and worldwide — have committed to working to achieve the ambitious goal of carbon neutrality and climate resilience by 2050. Reducing global warming is key. These necessary targets can only be reached through significant transitions in urban form, energy sources, transport and resource efficiency. 

The city is also completing a Climate Change Action Plan with many programmes in place that support climate change adaptation, mitigation and climate resilience, and is working towards growing these.

Adaptation

In the adaptation and resilience work area, projects include:

improving our water resilience;
conserving our biodiversity and protecting coastal areas; and 
enabling appropriate nodal development through the adoption of a coastal urban edge.
Mitigation

To reduce greenhouse gas emissions, the city’s mitigation efforts include:

driving energy efficiency in our own municipal operations;
moving towards net-zero carbon buildings;
developing our own clean energy generation;
procuring energy from independent power producers;
enabling small-scale embedded generation;
reducing and diverting waste; and
building an efficient transport network.

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​South Africa’s Minister of Mineral Resources and Energy (DMRE) , Mr Gwede Mantashe, said that government is cognisant of the fact that energy security is the nucleus to revive and grow the economy.
The minister was addressing the National Council of Provinces (NCOP) in Parliament on the Budget Vote as allocated to the Department of Mineral Resources and Energy for the 2021 – 2022 fiscal year earlier today. 
The minister submitted an RFP roadmap for new generation capacity totalling 9213MW over the next two years.
The new generation capacity is made up of 4200MW renewable energy, 4500MW from fossil fuel (1500MW coal and 3000 gas) plus 513MW of storage.
The minister shared with the house details of the interventions his department will be implementing in this fiscal year, over and above the projects we implemented in 2020/21 to create the much-needed additional generation capacity.

Between August 2021 and January 2022, the Department will issue additional Requests for Proposals for:

2 600 megawatts from renewable energy around August 2021.
513 megawatts from Storage around August 2021.
1 500 megawatts from Coal around December 2021.
3 000 megawatts from Gas around December 2021.
1 600 megawatts from renewable energy around January 2022.
These RFP’s fall outside of the country’s 2000MW Risk Mitigation Independent Power Producer Programme where preferred bidders have been announced. Read more

The minister added that Koeberg Nuclear Power Plant 20-year extension project is also underway.

The minister concluded that they are mindful of the need for economic growth but also mindful of the need for wealth redistribution.

Author: Bryan Groenendaal

The Minerals Council South Africa (MCSA) supports further regulatory reforms to streamline the process of regulatory approval and licensing of self-generation electricity projects from a ‘red tape’ situation towards a ‘smart tape’ situation that will enable shorter timelines and a less bureaucratic approach. Should we achieve this, then South Africa will see more projects like the 40 MW solar plant that was announced by Gold Fields.

Says Minerals Council CEO, Roger Baxter:
“Since 2008, very rapid increases in electricity prices along with the unreliability of electricity supply have been the two largest contributing factors not only affecting existing large scale mining operations, but also impacting on the downstream processing and ferro-alloy production industries. The critical question is – what are we doing to encourage self-generation in the country and the economy?”

Self-generation projects have the potential to contribute significantly towards easing electricity supply constraints in South Africa while at the same time improving the competitiveness of the mining sector by reducing the cost of electricity and the industry’s carbon footprint.

Currently, 17 self-generation projects with capacity to generate 2.4 GW of electricity, at various stages of completion within the regulatory process, are underway by Minerals Council members. Of these, 12 projects with capacity to generate 1.6 GW of electricity are renewable self-generation projects. It is estimated that these projects could come online within the next 18 to 36 months.

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Since 2019, significant progress has been made to unlock the regulatory environment and enable self-generation of electricity. The Minerals Council continues to engage constructively with the Department of Mineral Resources and Energy (DMRE), NERSA and Eskom on those constraints that delay the execution of self-generation projects.

The Minerals Council has made the following recommendations to the DMRE to streamline the regulatory process to enable additional self-generation:

Establish a “one-stop-shop” mechanism coordinated by the DMRE to accelerate licensing of private sector generation for own use. The process should be streamlined, and all licensing should be approved within 90 days with progress reported to Cabinet.
Increase the cap from 10 MW to 50 MW on Schedule 2 self-generation licences.
Introduce licensing lite to make provision for small self-generation plants which currently undergo the same licensing process as large coal fired power stations.
Take economies of scale into consideration.
Address other potential constraints involving various government authorities that could cause delays.
Address wheeling as reaching agreement often is a long and drawn out process with charges sometimes rendering projects uneconomical.
Develop a flow diagram to outline the full licensing process to enable IPPs to plan accordingly and ensure accountability.
“We welcome the efforts of the DMRE to engage constructively with the industry on ways to streamline the regulatory approval process for self-generation projects. We support the increase in the Schedule 2 licence cap from 10 MW to 50 MW which will allow for more than 5,000 MW of electricity generation to be freed up which will go a long way in easing the electricity supply constraints in South Africa impacting all aspects of the economy,” concluded Mr Baxter.

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We have been wondering for a while now what exactly is the perceived age of the renewable energy market here in South Africa.
When we refer to age, we mean how long has the green economy been developing to a point of majority adoption or are we still in progress towards it? We decided to conduct some research via FB and our friends at Powerforum to help answer this question.
Powerforum – https://powerforum.co.za
https://www.facebook.com/groups/154713861795197

Why is it important? In an emerging economy that is currently fractured with so many suppliers, installers, and a huge variety of products on offer its important to understand where we are in the renewable marketplace and where we may evolve too.
We posed the question: If the south African renewable marketplace were a person, how old would they be?
It may seem strange to ask in this manner but it proved to be an effective question. The results were interesting, so we crunched the numbers and this is what we got.
42% of participants voted on 7 years old
30% of participants voted between 7 – 10 years old
23% of participants voted on 3 years old

Given the general consensus, we believe the market to be an average of 7 years old. We also realize that the renewable energy market as a whole has been around quite a long time in fact as far back as the mid 19th century.

This research poll gives us a unique viewpoint. We know that in SA the genesis or uptake of renewables is a good 25 – 30 years already. However, this does not mean the general public at large knew or had knowledge of this including the available level of adoption at the time.

Ideally what this research points to is the following:
The general public is young to the knowledge of renewable technology
Technology is developing faster than ever before
Renewable technology adoption is increasing
The consumer knowledge gap is large and needs to be filled

The general public is young to the knowledge of renewable technology
The level of knowledge about renewable energy differs from country to country. We know that places like Australia, USA and Europe. This is in part to policy and availability to information. Additionally, we also know that these countries have been faster in the adoption cycle of renewable technologies for their cities.
Technology is developing faster than ever before
Renewable technology is developing at a faster rate than ever before. This is due to the global increased uptake of renewables and the increase in the need for independent energy and self-sufficiency. What is current today will in most accounts not be current in the next 12 months to 18 months.

While green tech development is great, it keeps increasing the knowledge gap of both consumers and installers. This also allows a bigger space for more product entrants to enter the market which in most cases are rebranded products which is prevalent in the inverter and battery space.
Renewable technology adoption is increasing
The adoption rate of renewable technology is believed to be growing at a rate of 13% per year globally. Covid-19 did put a slow down on this growth curve however experts believe it will keep progressing year on year without fail.

As technology progresses and is taken up faster in developed economies like the USA, other developing economies like South Africa lag behind slightly. This is due to many factors such as government policy formulation, consumer spending, and economic growth rates. 
The consumer knowledge gap is large and needs to be filled
Consumers want to learn and be knowledgeable about many things especially before they spend money on something. This is especially true for solar energy due to its large expense and relative explosion in SA as a feasible option to mitigate Eskom load shedding and cable theft.

The knowledge gap is large in part to a highly fragmented market with so many products on offer as well as little information to help guide consumers on how energy systems work. This is why Inside Energy was created. Product knowledge, system knowledge and overall understanding on how various renewable energy options work is lacking.

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​Minister of Mineral Resources and Energy Gwede Mantashe has published new embedded generation regulations which could help businesses and private individuals reduce their reliance on Eskom.

In the regulations, the government has proposed lifting the threshold for embedded generation capacity from 1MW to 10MW.

This comes after President Cyril Ramaphosa announced in his state of the nation address that the government was considering lifting the threshold to reduce strain on the struggling national power grid.

“Recent analysis suggests that easing the licensing requirements for new embedded generation projects could unlock up to 5,000MW of additional capacity and help to ease the impact of load-shedding,” he said at the time.

“We will therefore amend Schedule 2 of the Electricity Regulation Act within the next three months to increase the licensing threshold for embedded generation,” Ramaphosa promised.

The licencing requirements were a stumbling block for many businesses which aimed to help alleviate the electricity crisis in South Africa by supplying their own power from solar, wind, other self-generation platforms.

New regulations
Currently, the Electricity Regulation Act requires entities who want to build power plants greater than 1MW to obtain a licence from the National Energy Regulator of South Africa (Nersa).

The new regulations state these entities will no longer have to obtain a licence for generation capacity up to 10MW.

They will still need to register with Nersa, but it’s not clear exactly how this process will differ from the current regime.

While the move will be welcomed by businesses, power experts and analysts have called for a bigger increase.

Professor Anton Eberhard, who directs the Power Futures Lab at UCT’s Graduate School of Business, told Reuters the new threshold was not high enough.

He said the Economic Advisory Board had recommended that the threshold be raised to 50MW, and pointed out the new regulations did not apply to projects aimed at adding capacity to the transmission grid.

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​A new report on electricity access for low-income households by Tracy Ledger, Lead Researcher on the Energy and Society programme.

Poverty has received scant attention from an energy perspective. This is remarkable given that energy is central to the satisfaction of basic nutrition and health needs, and that energy services constitute a sizeable share of total household expenditure in developing countries.

This working paper focuses on how the affordable energy access goals of South Africa’s energy policy have been undermined: our analysis indicates that this is the result of a combination of poor system governance, the failure to allocate clear accountability for delivering affordable access, haphazard institutional alignment and an overarching failure to identify and address critical competing policy tradeoffs, particularly between affordable energy access for households and municipal financial viability.

Many of these negative outcomes originate in the local government sphere of the state — in the structure of its revenue model, in the priorities emphasised by national departments with key oversight roles over municipalities, and in the central gatekeeper role that local municipalities play in determining who gets access to subsidised services and who does not. Certainly, there are multiple weaknesses in the overarching policies that local government is responsible for implementing (which weaknesses need to be addressed), but the manner in which these have been implemented by local government has made a bad situation even worse.

The current operation of the energy distribution system is actively and significantly contributing to increased poverty and inequality, as is detailed in this working paper. Key oversight institutions are effectively reproducing and entrenching these outcomes, either by neglecting their mandated oversight roles in respect of energy access, or by emphasising competing outcomes inherently at odds with a pro-poor energy agenda.

This situation is completely contrary to the intentions of both South Africa’s pro-poor transformation agenda (including the central role of local government in delivering that agenda) and original policy intentions concerning the developmental role of energy in a post-apartheid society. These outcomes also have the potential to undermine the decarbonisation goals being pursued in the transition from coal to clean energy. Effectively, by ignoring the details of what is actually going on in our energy distribution system, we are building and entrenching two parallel energy systems: a visible, clean system based on renewable energy generation to which access is effectively limited, alongside a largely invisible, dirty and dangerous system that is the only option for millions of households.

Download the full report here........