​Enertrag AG, a clean-energy group that specialises in electricity and hydrogen from renewable sources, operates the wind-hydrogen Hybridkraftwerk plant near Prenzlau, in Germany. This hybrid power plant, which has been functioning since October 2011, generates climate-neutral hydrogen through an electrolysis process using wind energy.

It is envisaged that the green hydrogen fuel proposed for the 20 GMA buses would be produced from a combination of energy from wind and solar photovoltaic technologies, Enertrag has outlined in an advertisement in Mining Weekly. GreenCape has been named as joint programme coordinator and other consortium members listed include the Council for Scientific and Industrial Research (CSIR), Navitas, Fraunhofer IEE and IKEM, with Busmark and the GMA supporters of the initiative. Fuel cells will allow the buses to become part of the decarbonising world by catalysing the green hydrogen into clean electricity that powers the buses in an emission-free manner.

Minerals Council South Africa CEO Roger Baxter last week suggested that Johannesburg’s Rea Vaya bus rapid transit system could be considered for conversion to hydrogen.

The Minerals Council’s own stationary fuel cell, which enables the building to be less reliant on the electricity grid and also uses repurposed by-products, such as heat, to contribute to the building’s ambient temperature in winter, has been registered under the United Nations Framework Convention on Climate Change Programme of Activities 9437: Cogeneration at Commercial sites.

South Africa has the combined solar and wind potential to produce hydrogen competitively. The country’s combined solar and wind power provide a hydrogen production capacity factor of close to 100% during daylight hours and 30% during the night, which is above the international norm of about 22%, according to CSIR senior research engineer Thomas Roos.

South Africa’s National Hydrogen and Fuel Cells Research, Development and Innovation Strategy, known as Hydrogen South Africa (HySA), has reached the third phase of its 15-year programme, which comprises three five-year phases.

HySA – an initiative of the Department of Science and Innovation (DSI) previously the Department of Science and Technology – aims to create local capacity and knowledge that will lead to the development of value-add products in the hydrogen fuel cell technology sector for domestic and international markets.

HySA strategy is to create knowledge and human resource capacity and develop high-level commercial activities in hydrogen fuel cell technology through beneficiating platinum group metals (PGMs). The HySA programme is therefore a government initiative towards a hydrogen economy in South Africa, DSI hydrogen and energy director Dr Cosmas Chiteme has outlined to Mining Weekly.

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​In June 2017 Italian oil and gas company ENI committed to investing $10-billion on the building of Coral South, a floating liquified natural gas (FLNG) project off the Rovuma basin in Mozambique, the world’s first ultra-deep-water FLNG facility. 8

In June 2019, Mozambique LNG (led by US-based Anadarko) committed $20-billion on the development of integrated offshore and onshore gas fields, through LNG, in the Rovuma basin, east of Palma, and in December 2019, Rovuma LNG (led by ExxonMobil and ENI) is expected to commit $30-billion to develop the same.

Each of these projects marked the largest investment of its kind in Africa, only to be overtaken by the next. The chance for Mozambique to grow its $14-billion economy and repay its government debt, now sitting at 100% of GDP, is a once-in-a-lifetime opportunity.

Standard Bank, which is heavily involved in Mozambique’s gas sector, says the Rovuma LNG project alone has the capacity to boost GDP by between $15-billion and $18-billion per annum and contribute $5-billion annually to the fiscus and create 323,000 employment opportunities – with LNG as a whole potentially facilitating real GDP growth of 8% to 10% over the next 30 years.

While it is not yet clear to what extent South Africa will benefit from a new source of LNG – prices will have to be negotiated on competitive terms – local companies can benefit from the sheer volume of work underway in the northern neighbour.

“A $128-billion capex spend over a decade is a major opportunity for SA business to physically supply the projects (and associated investments),” says Paul Eardley-Taylor, southern Africa head of oil & gas at Standard Bank.

“SA could export goods and services to Mozambique, investors could form companies in partnership with Mozambique nationals,” he says.

There will also be opportunities for SA human capital working on the LNG projects and other domestic gas investments as employees, contractors, manufacturers, service providers and consultants.

Standard Bank has committed to finance part of the Anadarko project (which has been acquired by French petrochemical giant Total) and also plans to finance part of the ExxonMobil project due to be announced later in 2019.

This could then see South Africa’s Export Credit Insurance Corporation, a dti subsidiary, underwriting part of this investment, Eardley-Taylor says.

“This could secure market access for SA companies of over $500-million. And the same could apply if SA companies are involved in Rovuma LNG.”

At a recent Mozvest conference held in Cape Town, speakers noted the limitations of Mozambique’s infrastructure to handle projects of this nature.

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​IRENA and SEforALL and UNDP announce partnership in coordination with Green Climate Fund to advance low-carbon energy transition and raise climate ambition

New York, NY, 22 September 2019 – In response to country needs to mobilize low-carbon, climate-resilient investments, a new global public good announced today will aim to increase the flow of capital in developing countries to meet climate ambitions. The Climate Investment Platform (CIP) is an inclusive partnership welcoming all stakeholders from governments and international organizations to the private sector to scale-up climate action and translate ambitious national climate targets into concrete investments on the ground.
 
With energy accounting for two thirds of total greenhouse gas emissions, the platform’s first service line is dedicated to the global transition to clean energy. Other service lines, such as adaptation, land use, cities and infrastructure will be launched in the first quarter of 2020. By decluttering and streamlining support to developing countries, the platform aims to accelerate action and advance climate investment in developing countries. Progress will be presented at UNFCCC COP 25 in December 2019.

The service offered by the CIP covers four key building blocks along the climate finance value-chain: supporting governments to specify ambitious energy targets and scale up their nationally determined contributions (NDCs), establishing well-designed, implemented and enforced clean energy policies and regulations, financial de-risking of energy projects, and a market-place to connect clean energy investors and project sponsors.
 
“The Climate Investment Platform is a crucial initiative that will simplify access to climate finance. It will catalyze investment for mitigation and adaptation in developing countries, supporting those most in need of climate action,” said Green Climate Fund Executive Director Yannick Glemarec.

“Renewable energy is the most effective and ready solution to rising carbon emissions. Together with energy efficiency, they can deliver 90 per cent of the emission reductions needed under the Paris Agreement, but investment and deployment must increase significantly,” said IRENA Director-General Francesco La Camera. “This partnership combines the strengths of the respective organisations to deliver tailored, proactive policy and investment support to set the energy transformation on a climate-safe path.

  “Finance is the lynchpin to achieving Sustainable Development Goal 7 and countries’ Paris Agreement commitments. However, the evidence is clear that global investment is dramatically off track to meet universal access to energy by 2030,” said Rachel Kyte, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All (SEforALL). “The Climate Investment Platform will help bridge the gap between supply and demand to accelerate capital and scale up climate resilient investments, allowing countries to raise their climate targets and develop policy environments that allow investment to flow.”

 “A powerful partnership of key institutions in the energy sector, the Climate Investment Platform will help to accelerate system-wide change and deliver co-benefits across the Sustainable Development Goals (SDGs) – from employment and economic growth to reduced inequalities and improved health.” said UNDP Administrator Achim Steiner.

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Representatives from SAAEA recently attended the Nedbank & EE Publishers seminar - 'Establishing a viable gas sector for SA'. Certainly the best organised and informative event attended in recent times.

Herewith some valuable presentations delivered by very knowledgeable contributors ....
Energy policy, regulatory, planning and procurement framework
Adv. Sandra Coetzee, Acting Head of the IPP Office
Establishing a viable gas sector in South Africa –a gas utiliser’s perspective
John Smelcer, Globeleq
Establishing a viable gas energy sector in South Africa
Andy Calitz, Former executive at Eskom and Shell
Gas consumer needs and the establishment of a viable gas sector in South Africa
Jaco Human, CEO, Industrial Gas Users Association

You are invited to register for the forthcoming 4th and 5th seminars:
22 October 2019: Flexible power generation – a new paradigm for SA
26 November 2019: ICT Infrastructure to support an effective ICT ecosystem in SA

​The acting head of the Independent Power Producer Office (IPPO), Advocate Sandra Coetzee, says “time is of the essence” for finalising South Africa’s gas-to-power (GTP) plans in light of the prospect of possible electricity supply shortages arising from the underperformance of Eskom’s coal fleet.

Coetzee, who was appointed in July, says gas will definitely play a role in South Africa’s transitioning electricity system, as it offers the flexibility required to complement variable renewable energy plants. In addition, GTP plants can be built relatively quickly and have lower emissions than coal-fired stations.
Speaking at a seminar hosted by Nedbank and EE Publishers, she acknowledged that gaps remained in South Africa’s gas policy framework and indicated that Eskom’s weak financial position also posed procurement challenges, with the utility remaining the single buyer of power produced by independent power producers (IPPs).

In addition, South Africa did not have sufficient domestic gas resources to supply GTP plants, as well as existing and future industrial users, and had yet to build the infrastructure needed for the import and processing of liquified natural gas (LNG).

However, the imminent promulgation of the updated Integrated Resource Plan (IRP), together with the fact that a ministerial determination was already in place for the procurement of over 3 000 MW of GTP capacity by 2030, meant that South Africa was not entirely constrained by the absence of a coherent framework.

The draft IRP envisages the first 1 000 MW of GTP capacity being introduced into the South African grid by 2024, with a further 2 000 MW to be added by 2027.

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Future growth responds to National Treasury's document titled “Economic transformation, inclusive growth and competitiveness: Towards an Economic Strategy for South Africa”. The document correctly calls for reforms and interventions in a number of sectors.

As one of the largest fixed income asset managers in South Africa, with client funds of R197 billion under management, Futuregrowth is committed to financing the economic growth and development of our country. For more than 20 years, we have actively invested in the infrastructure sector as a fiduciary asset manager on behalf of our retirement fund clients*.

In the wake of the nation’s immense economic and social upliftment challenges, Futuregrowth agrees with the preamble of National Treasury’s document: “The combination of low growth and rising unemployment means that South Africa’s economic trajectory is unsustainable. Government should implement a series of growth reforms that promote economic transformation, support labour-intensive growth, and create a globally competitive economy.”

The keyword is “implement”: Government needs to apply single-minded determination and focus on execution and delivery. Bold, urgent and sustainable decisions need to be made in order to create the environment needed for job creation and inclusive economic growth. There are immediate investment opportunities that we believe could easily be unlocked by decisive government action and thereby re-ignite investor confidence in the future of the country.

The National Treasury correctly calls for reforms and interventions in a number of sectors. We believe that investors stand ready to invest in well-considered and well-structured projects that will raise the infrastructure capacity of this country and kick-start the sustainable job creation and inclusive economic growth.

Critically, projects must be financially and operationally sensible and sustainable. As an example of what is possible and has been successfully executed, one only needs to look at the Renewable Energy Independent Power Producer Procurement (REIPPP) Programme, which to date has seen over R220 billion in investment since 2012. With over 80 projects an additional 6329 MW of renewable energy has been procured to date, of this, 4065 MW is currently connected to the grid. Arguably, these amounts could have been greater, and the timeline shorter, had policy confusion and vested interests not stalled the programme for almost two years.

Furthermore, the REIPPP projects to date have been delivered on time, on budget and without any allegations of malfeasance, corruption, or impropriety. By government’s own estimates, the REIPPP Programme has:

created 38 701 job years for youth and women from the surrounding communities in which these projects are located;
benefitted local communities through over R1bn spent by the projects on education, bursaries, health facilities, feeding schemes and supporting old age homes and early childhood development;
helped establish more than 1 000 small enterprises; and
provided black South African companies with, on average, 33% ownership in the projects.
Notably, over the life of these projects the programme will provide qualifying communities with R27.1 billion in net income from the dividends generated by their shareholdings in these projects.​
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In short, REIPPP demonstrates that there is capital, competence and goodwill to fund appropriately structured and managed national development initiatives.

Futuregrowth manages retirement funds, and we are one of the custodians of the nation’s savings. It is imperative that investors allocate capital to entities and projects that are sustainable and will deliver an appropriate risk-adjusted return. The National Treasury document highlights a number of sectors that we believe could roll-out a similar programme to the REIPPP Programme, including further rounds of REIPPP, as well as new projects in agriculture, telecommunications, tourism, water infrastructure and transport networks.

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Electricity could be delivered to more than a billion people currently living without it within a decade by linking up small-scale projects into a giant, environmentally-friendly network.

According to a new global commission, advances in micro energy grids and renewable energy technologies could “dramatically accelerate change” and transform lives in rural areas of sub-Saharan African and south Asia.

The Global Commission to End Energy Poverty met for the first time this week to set out plans to accelerate the UN’s sustainable development goal to ensure access to affordable, reliable and sustainable energy for all people by 2030.

The commission, established by the Massachusetts Institute of Technology Energy Initiative and the Rockefeller Foundation, plans to bring together leading investors, utilities and policymakers to tackle energy poverty.

Under the initiative, the distributed networks would help connect homes, businesses and schools to small-scale solar power projects to deliver cheap, sustainable electricity that can help power local economic growth.

The commission includes government leaders, energy industry chief executives and representatives from major development organisations, including Fatih Birol, the head of the International Energy Agency.

Dr Rajiv Shah, president of the Rockefeller Foundation and formerly of the US agency for international development, said “a whole new way of thinking” about energy distribution was required.

“We cannot end poverty without successfully ending energy poverty,” said Shah.

“For 140 years we’ve had this mindset that energy access means building big power plants and connecting them to grids, and that’s how you provide electricity.

“Today, new technology frontiers, business models, and our knowledge of alternatives is so strong that this commission will be able to set out a new roadmap to end the energy access problem for 1 billion people across the globe.”

The commission also plans to help set up new regulation in developing countries to accelerate the rollout of new energy systems, and make the projects more attractive to international investors.

“If I want to start a small solar-powered mini-grid programme in a rural part of an under-served country, I could be prevented from actually providing power without permission from the state-owned utility which might own that business opportunity,” Shah explained.

“That’s one of many policy roadblocks that is preventing distributed solutions from really being easy to invest in.”

Shah will co-chair the commission alongside Dr Ernest Moniz, a former US energy secretary,and Dr Akinwumi Adesina, the president of the African Development Bank.

Moniz warned that existing plans to end global energy poverty by 2030 are “not fast enough” and should be more ambitious.

“Twenty years ago, energy access might have been defined by having a 20-watt lightbulb. One doesn’t want to denigrate that – the shift from having no light to some light is major – but our ambition is more than that. We want energy access that allows for credible family, community and regional economic development. Frankly, we’d like it to allow for entrepreneurial activity too,” he said.

Moniz said that by relying on renewable energy, particularly solar power alongside batteries, developing nations should be able to attract investment in clean energy and rule out the need for future investments in coal-fired power plants. Adopting such methods could also halt the wood-burning that has led to mass deforestation in some countries, he said.

“Speaking personally, there is a lot of concern about a new round of investments in coal funded by Chinese development banks. There could be a lock-in of emissions for the future. We would rather see distributed [energy grid] architecture, including renewables, and potentially with a role for gas,” he said.

Shah added that economic development and the empowerment of women offered the best chance for a low-emissions future.

“If you’re a woman in rural Bihar and you’re able to all of a sudden access electricity, get a sewing machine, create an income, provide light for your daughter to study at night, it’s just transformational,” said Shah.

“We’ve seen the same thing in India and Myanmar and throughout Africa. This commission embarks upon this task with a huge amount of optimism and a real understanding of how important it is in the lives of so many people around the world.”

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A leaked Eskom vision and strategy document, apparently prepared by the Boston Consulting Group for Eskom, has revealed the next steps of a long-awaited restructuring and turnaround plan for the embattled utility.

The document was presented on 22 August 2019 to the Eskom Executive Forum, a group of about 600 senior Eskom managers and executives, by acting Eskom CEO Jabu Mabuza.

In the presentation, Mabuza admits that Eskom is in a utility death spiral with an outdated and unsustainable business model, operational and structural inefficiencies, and a lack of transparency, in a rapidly changing energy landscape.

The presentation further states that “Eskom ran out of cash and came close to complete collapse on multiple occasions in 2019”, and warns that if nothing is done “Eskom will collapse and bring down South Africa”.

The restructuring process revealed so far
The first step of the restructuring of Eskom was announced by the President of South Africa, Cyril Ramaphosa, in his state-of-the-nation address on 7 February 2019. He indicated that the generation, transmission and distribution activities of Eskom will be split into three separate subsidiary companies owned by Eskom Holdings SOC Ltd.

The next step revealed by Mabuza in the presentation of 22 August will be to carve the transmission company out of Eskom Holdings into a separate, independent, state-owned company under the Department of Public Enterprises (DPE), to form an independent transmission system and market operator, or ITSMO.

After these first two steps, which the document indicates would have a timeframe of five years, Eskom would retain two of its major activities, namely generation and distribution, with each activity housed in a separate subsidiary company.

Thus, from the vision and strategy outlined in the document, it would appear that Eskom sees itself in the future as an electricity generation and distribution company, and not a transmission company.
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Further restructuring that may still follow
However, this would surely not be the end of the restructuring process, as the electricity generation and distribution activities of Eskom and municipalities are the two most troublesome and toxic hotspots that are in most need of restructuring.

Generation and distribution are also facing the biggest threats from disruptive technologies, in the form of utility-scale renewable energy, distributed embedded small-scale generation, and pervasive, consumer-empowering information and communication technologies (ICT).

In contrast, the current Eskom transmission group does not carry a lot of debt, arrear payments receivable, or people. Eskom’s transmission activities and assets are generally considered to be relatively well-managed, well-maintained and reliable, and this is the only part of Eskom that is seen to be functioning reasonably well.

So, to leave Eskom with the troublesome activities, toxic debt and municipal arrear payments of its un-restructured generation and distribution activities, with the crown jewels of transmission carved out and no longer forming part of its business, would be a fundamentally flawed and misguided vision and strategy.

It would perhaps be more rational and preferable for Eskom to morph from being primarily a generation company (as it is now), to becoming the state-owned ITSMO itself, and divesting from its problematic generation and distribution activities.

Thus, the as-yet unannounced end-state for the power generation and electricity distribution industries could perhaps comprise Steps 1 and 2 as already announced, but with Steps 3 and 4 still to follow, as detailed below.

Step 3 would be the creation of a competitive generation sector. This could be in the form of a handful of unbundled former Eskom generators, a limited number of public-private partnership (PPP) generators, a few hundred renewable energy and other independent power producers (IPPs), and several thousand distributed, small-scale, embedded generators.

This diverse group of generators would deliver generation capacity and energy to the ITSMO (in the form of a “new” rejuvenated Eskom), with the generators competing for access to the grid on level playing fields and on economic grounds via an electricity market managed by the ITSMO.

There could also be bilateral contracts between generators and customers, wheeling power through the grid, and paying wheeling fees to the ITSMO.

The final Step 4 of the restructuring process would surely have to be the rationalisation of the dysfunctional electricity distribution sector into a handful of financially viable and better resourced, independent, state-owned, regional electricity distributors (REDs), formed from the remnants of the current 185 municipal and six Eskom electricity distributors.

A competitive retail electricity sector selling electricity to consumers should also form part of the restructured electricity distribution industry, offering all manner of bundled retail pricing packages, as we see in other jurisdictions and sectors, such as for smartphone voice and data airtime.

Getting stakeholders on board.

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