NEWS AND SNIPPETS

THE LOAD SHARED

In late July, President Ramaphosa announced interventions to overcome the immediate energy crisis.

“We are fixing Eskom and improving the performance of our existing fleet of power stations. The maintenance programme of Eskom’s electricity generation fleet has declined. Over the next 12 months, Eskom will increase the budget allocated for critical maintenance to increase the reliability of its generation capacity.

We are cutting red tape that has made it difficult for Eskom to buy equipment within the required period to effect repairs. One of the challenges that Eskom has faced has been the shortage of skills. The utility is now recruiting skilled personnel, including former senior Eskom plant managers and engineers from the private sector.

Over the next three months, Eskom will take additional actions to add new generation capacity to the grid on an urgent basis. As an immediate measure, surplus capacity will be bought from existing independent power producers.

Eskom will import power from neighbouring countries through the Southern African Power Pool arrangement. Eskom will also use interim power solutions, such as mobile generators, to supplement current generation capacity for a limited period.

Eskom’s huge debt, which stands at close to R400-billion continues to be a huge burden on Eskom’s ability to address its many challenges. The National Treasury is working to finalise a sustainable solution to this debt.

We will use climate funding provided through the Just Energy Transition Partnership to invest in the grid and repurpose power stations that have reached the end of their lives. Eskom will be constructing its first solar and battery storage projects at Komati, Majuba, Lethabo and several other power stations. These will result in over 500MW being added to the system.

Our second priority is to accelerate the procurement of new capacity from renewables, gas and battery storage. The relevant government departments are working together to ensure that all projects from Bid Window 5 of the renewable energy programme can start construction on schedule. This includes taking a pragmatic approach to the local content requirements for these projects. The new generation capacity procured through Bid Window 6 for wind and solar power will be doubled from 2 600MW to 5 200MW.

We will release a request for proposals for battery storage by September 2022, and a request for gas power soon thereafter.

We are accelerating greater private investment in generation capacity. Last year, we announced the raising of the licensing threshold to 100MW, which unlocked a pipeline of more than 80 private sector

President Ramaphosa.

projects with a combined capacity of 6 000MW. We will remove the licensing threshold for embedded generation completely. While they will not require licences, all new generation projects will still have to register with the regulator and comply with the technical requirements for grid connection and our environmental legislation. We will be tabling special legislation in parliament on an expedited basis to address the legal and regulatory obstacles to new generation capacity for a limited period.

We will in the meantime waive certain regulatory requirements where it is possible to do so within existing legislation. This includes reducing the regulatory requirements for solar projects in areas of low and medium environmental sensitivity. Eskom can expand power lines and substations without needing to get environmental authorisation in areas of low and medium sensitivity and within the strategic electricity corridors. We are establishing a single point of entry for all energy project applications, to ensure coordination of approval processes across government.

To incentivise greater uptake of rooftop solar, Eskom will develop rules and a pricing structure – known as a feed-in tariff – for all commercial and residential installations on its network. Eskom has established an independent transmission company and is on track to separate its generation and distribution businesses by the end of 2022. Broader reforms to establish a competitive electricity market will be expedited through the finalisation of the Electricity Regulation Amendment Bill to enable private sector investment.

The grid will remain state-owned.

To ensure that these measures are implemented in a coordinated manner, I have established a National Energy Crisis Committee.”

CREECY AT CLIMATE DIALOGUE

“Climate change is currently costing African countries between 3% and 5% of their GDPs. Regionally, Africa is experiencing extreme climate impacts which the continent had very little role in causing. The Sixth IPCCC report confirms that despite having 17% of the world’s population, Africa is only responsible for 3% of emissions.

For Africa, the Global Goal on Adaptation must increase the resilience of our population to the adverse impacts of climate change 50% by 2030 and by at least 90% by 2050. Focus must be placed on the most vulnerable people and communities; to support health and well-being; food and water security; infrastructure and the built environment; as well as ecosystems and ecosystem services.

It is time that we deal with climate finance with the sense of urgency and scale it deserves. The reality is we have failed in promoting adequate ambition on finance. To put things in perspective: according to the UNFCCC Standing Committee on Finance, developing countries need between five to 11-trillion US dollars, to meet their climate objectives. And yet according to the OECD only around US$80-billion was mobilised. This represents less than 2% of developing country needs. The only way we can re-establish credibility in financial provision is to set a realistic goal for developed countries to mobilise at least one-trillion US dollars per annum to assist developing countries meet their climate change objectives. COP 27 needs to focus on supporting a peoplecentred just equitable transition in the developing world. The urgent need is to adapt now, while we build resilience for the future. We can only avoid loss and minimise damage with the appropriate scale of public finance that does not exacerbate the indebtedness of Africa.”

MTN SA SUPPLEMENTS BATTERY ROLLOUT

As loadshedding escalates across the country, MTN South Africa is working to protect customer’s connectivity, with an aggressive rollout of batteries, generators and alternate power supplies.

MTN is inviting all businesses that are in possession of generators, to become potential suppliers to the company. Whether the business has two or 20 generators, MTN is looking to partner. MTN has also deployed over 2 000 generators to counter the impact of stage 4 (and higher) loadshedding. It is currently using more than 400 000 litres of fuel per month, to keep these generators operational.

Interested parties are invited to contact power@mtn.com

THE GREENEST CAPE OF THEM ALL

According to FDI Intelligence 2022, the renewable energy sector in the Western Cape has received the second-highest level of foreign direct investment (FDI), by CAPEX, when compared to other sectors, over the last 10 years. Through 11 projects between 2011 to 2021, this sector attracted R17.99-billion in FDI, coming second to communications on the same measure. it was ahead of the business services sector, which came in third. This data confirms the huge potential of the Western Cape’s green economy, and how a continued focus on strengthening our energy resilience will not only relieve the pressure created by loadshedding, but also contribute to more investment and economic growth, while driving a clean energy transition.

Western Cape.

GAZETTED REGULATION 28 AMENDMENTS

The government took another significant step in paving the way for retirement funds to invest meaningfully in infrastructure investments when it recently gazetted Regulation 28. The finalisation of Regulation 28, which takes effect on January 3, 2023, ultimately increases the scope of potential investment and importantly, lifts the ceiling on the amount retirement funds can invest in infrastructure assets to 45%. It follows two rounds of public comments in 2021.

MAJOR LEAGUE SA SOLAR PROJECT

Scatec ASA is starting construction of three Kenhardt projects in the Northern Cape under the RMIPPPP after reaching financial close. Once operational, the project will have a total solar capacity of 540MW and battery storage capacity of 225MW/1 140MWh and provide 150MW of dispatchable power under a 20-year Power Purchase Agreement to the Kenhardt region.

Kenhardt in the Northern Cape.

The project will be the largest investment in Scatec’s history with a total capex of approximately ZAR16.4-billion to be financed by equity from the owners and ZAR12.4-billion in non-recourse project debt. The debt will be provided by a group of lenders which includes The Standard Bank Group as arranger and British International Investment. The Kenhardt projects are funded in local currency.

JSE LISTING TARGETS SMART CITIES

South African investors who are looking for an opportunity to invest in smart cities need to look no further following the listing of the Satrix Smart City Infrastructure Feeder Exchange Traded Fund (ETF) on the Johannesburg Stock Exchange (JSE). This ETF tracks the performance of companies that invest in infrastructure and technologies that transform cities into smart cities.

The emergence of smart cities is one of the key megatrends shaping the world today, which is driven by rapid urbanisation as millions of people relocate from rural towns to major cities. Smart cities distinguish themselves by utilising information and communication technologies to increase operational efficiency, thereby improving the quality of their services and the welfare of residents.

The listing of the Satrix Smart City Infrastructure Feeder ETF brings the number of ETF listings on the JSE to 90 with a total ETF market capitalisation of more than R114-billion. The ETF tracks the STOXX Global Smart City Infrastructure Index, which is made up of a minimum of 80 companies that offer innovative technology-backed solutions for smart cities.