August 2021

Eskom, which supplies almost all South Africa’s electricity from coal-fired power plants, is considering spending R106 billion on wind and solar energy by 2030.

The investment plan, which Eskom could carry out by itself or in partnerships, is the most detailed demonstration yet of the utility’s ambition to move away from coal by taking advantage of the nation’s abundant wind and solar resources.

The state-owned company envisages spending R61.75 billion on wind power and R44.25 billion on solar energy by the end of the decade, a company presentation seen by Bloomberg shows. Some of the projects are planned on the sites of coal-fired plants that are scheduled to close. Eskom confirmed the presentation and the costs without giving further detail.

Hydrogen will, in the future, be a suitable substitute for natural gas to support decarbonisation, says South African Oil and Gas Alliance (Saoga) Gas Economy Leadership Group chairperson Craig Morkel.

However, the development of the hydrogen industry first requires that a gas market be developed.

“The best way to do this is to first use imported liquefied natural gas (LNG) before transitioning to local and regional natural gas and finally hydrogen,” says Morkel.

The upstream industry is unlikely to invest in either the necessary exploration for gas, the development of the local natural gas industry or the development of the hydrogen industry unless there is a convincing, existing market for gas.

The National Energy Regulator of South Africa (Nersa) is still analysing the implications that a recent amendment to Schedule 2 of the Electricity Regulation Act, exempting grid-tied generation facilities below 100 MW from licensing, will have on its processes, rules and guidelines. However, fulltime regulatory member responsible for electricity Nhlanhla Gumede reports that Nersa views such registration primarily as an administrative process, rather than one where it will be expected to apply its regulatory discretion.

Speaking during a Power Future Labs webinar on the implications of the reform, which was gazetted by Mineral Resources and Energy Minister Gwede Mantashe on August 12, Gumede said that approvals were likely to be delegated to Nersa officials rather than having the Energy Regulator deliberate on them at its formal meetings.

Independent power producer Globeleq and financial services firm Absa have completed the senior debt refinancing of three of Globeleq’s renewable energy power plants in South Africa, the companies said on August 10.

The purpose of the refinancing is to enhance the projects’ capital structures, allowing for the release of value to shareholders and the reduction of the tariff to the national utility and, ultimately, consumers in South Africa.

Power failures have become routine in South Africa. At the same time, the country wants to wean itself off the coal that generates more than 80% of its electricity and makes it the world’s ­12th‑biggest source of greenhouse gases.

Most of South Africa’s power stations are near the end of their lives. An average of about 1,000 megawatts of capacity is set to be decommissioned annually over the next decade, which presents an ideal opportunity to begin overhauling the energy system. The question is how.”