Avon & Dedisa Peaking Power

AVO N A N D D E D I S A PEAKING POWER

Pylons in KZN © Graeme Williams

AVON & DEDISA PEAKING POWER

Peak

Performer PRODUCTION: Colin Chinery

The Avon and Dedisa power plants near Durban and Port Elizabeth are addressing two key South African issues; the critical role of peaking and emergency generation, and the significance of State/private sector partnerships. “For any country to thrive you have to have a very balanced and transparent working relationship between government and the private sector,” says Avon and Dedisa’s CEO Tebogo More. www.enterprise-africa.net / 3

INDUSTRY FOCUS: POWER

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Forget chatlines, music videos or Google mapping: in South Africa, the most-downloaded app delivers alerts, schedules and forecasts for power outages and rolling blackouts.

It’s the download that never sleeps. In February 4,000 megawatts of power - enough to power three million households - was cut from the national grid to prevent it from collapsing.

Load shedding has been part of South African life since 2014, when it became clear that Eskom - state monopoly supplier since 1923 - was facing various challenges in meeting the national demand for power.

Struggling to generate enough electricity to meet demand, Eskom has recently re-introduced a system of rotating outages called load-

Dedisa Power Plant

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shedding; hitting small businesses and public services, investor confidence, and the public at large.

Amid this stygian gloom, to which South Africans respond mostly with stoical resignation, projects brought on stream via the Department of Energy’s independent power producer (IPP) have helped to somewhat ease the situation.

Notable among them are the 1,005-megawatt Avon and Dedisa peaking power plants, which commenced operation in 2015 and designed to help balance the grid’s fluctuating power needs by supplying Eskom at peak demand.

PRIVATELY-OWNED FIRST The 670MW Avon facility at Shakaskraal, 65 km north of Durban,

// WE WANT TO BE A VALUE-ADDED PARTNER TO THE SOUTH AFRICAN GOVERNMENT // together with its Dedisa 335MW facility sister power plant in Port Elizabeth, are the first large privatelyowned power generating plants initiated by the Department of Energy.

Awarded in 2006 in anticipation of the 2008 black outs, the Avon and Dedisa scheme went into a protracted stall, before construction finally started, a seamless operation, on budget and on time.

“We are positioned and ready to

AVON & DEDISA PEAKING POWER

provide supplementary power as and when needed, assisting Eskom with its generating challenges, and expecting an above-normal busy winter,” says CEO Tebogo More.

“We can go from zero to full load in less than half an hour and perform a fast-start from zero to 100% in 20 minutes.”

As-and-when extends beyond peak-time responses to emergency back-ups, a dual capability much tested last year.

“With a higher number of emergencies than anticipated last year, we ran more as an emergency power facility, so that has certainly been a challenge in terms of various logistics.”

Working with dispatachable generators – on/off, demandresponsive and dispatched at the request of power grid operators – is a highly testing operation.

“You never know when we will be dispatched, yet we have to be ready at all times. Having to navigate around that has been both interesting and challenging.”

A highly experienced energy and

finance professional, involved for ten years in the infrastructure sector value chain from financing to construction and operations, Tebogo More arrived as CEO 18 months ago, on appointment from Avon and Dedisa’s leading shareholder, the French multinational utility company, Engie.

“Previously, I was a senior developer looking at projects within southern Africa from the renewable perspective and across different technologies, including looking at Greenfield opportunities, typically through a tender process initiated by government.”

Before joining Engie in 2015 she was with the Aveng LTD Group, developing energy projects focussed largely on growth strategy, mergers and acquisitions.

“My background in power and gas has always been renewable energy, so this is the first time I have been involved with a dispatchable project.”

With a 38% shareholding, Engie is partnered by the Blackowned company Legend Power Solutions - 27%, Japanese-based Mitsui and Co - 25% - and the Peaker

// WE ARE POSITIONED AND READY TO PROVIDE BACK-UPS AS AND WHEN NEEDED, HELPING ESKOM WITH ITS GENERATING CHALLENGES, AND EXPECTING AN ABOVE-NORMAL BUSY WINTER //

// WE CAN GO FROM ZERO TO FULL LOAD IN LESS THAN HALF AN HOUR AND PERFORM A FASTSTART FROM ZERO TO 100 IN 20 MINUTES // Trust, representing broad based shareholding from KwaZulu-Natal and the Eastern Cape the two local, with 10%.

The power generated by these two open cycle gas turbine power plants are sold to Eskom under a Power Purchase Agreement over a 15-year term.

ON TO NATURAL GAS? Both plants are prepared for a possible future conversion to combined cycle and to natural gas, as part of the government’s planned introduction of natural gas to South Africa.

Natural gas is one of the cleanest, safest, and most convenient forms of energy, and recent on- and off-shore discoveries of significant quantities in Southern Africa - including a “significant” gas discovery off South Africa’s CONTINUES ON PAGE 30

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In a worldwide economy, the tourism sector caters a constant yearly growth of 8.6% in South Africa. With this in mind founder of eNtrav Technologies, Nirasha Lala in partnership with her longstanding colleague and business partner, Nonceba Gabotlhaelwe began this venture 3 years ago with the idea to integrate both travel and online.

Nirasha Lala, who has been in the tourism industry for over 17 years with a financial background, has successfully grown into a young entrepreneur, playing a fundamental role as the Chief Executive Officer at eNtrav Technologies.

Nonceba Gabotlhaelwe has been in the tourism industry for approximately 23 years and has headed up operations in various other conglomerates as well as the management of very large accounts. Today she plays an instrumental role in the internal structure and management of the business overseeing day to day operational requirements.

With a mission focussed on bringing simplicity and value in the way that corporates conduct and manage travel and an objective, as a responsible corporate citizen, to be recognized as a premier technology provider for travel and expense management for Corporate Clients and Travel Management Companies (TMC’s) in South Africa/African Continent by 2023, the eNtrav System/Solution has been designed as a fully agnostic and integrated corporate travel management platform. eNtrav will • Integrate online travel bookings by aggregating various Global Distribution System (GDS) and APIs (Application Programming Interface) • Facilitate competitive options and pricing for its customers, staying within the confines of a business travel policy • Through a holistic solution allow a client to utilise only one platform across various devices for all its travel requirements The eNtrav Supersite will be the foundation system built on .Net technology with various Input and Output API’s that will plug into the system. The plug-ins will include the following solutions: • • •

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Several platforms are used at any given point in order to come up with a complete travel package for a traveller, introducing inefficiency Reporting on travel activities is therefore extremely difficult

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Most of the travel processes are manual (paper based) and are conducted via the phone and emails Difficulty is experienced in tracking what is really going on within a company’s travel activities

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INDUSTRY FOCUS: POWER

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southern coastline by oil giant Total - represent a new dawn for the region’s energy landscape.

“This could well be a gamechanger for our country and will have significant consequences for our country’s energy security and the development of this industry,” President Ramaphosa told Parliament in the televised speech.

Could Avon and Dedisa be part of this game changer? “The plant design has always included the long-term view to convert to natural gas, but from a project and financing perspective, there’s always been the need to ensure we do specifically

Avon Power Plant

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and exactly what we are meant to be - which is a peaking plant.

“However, there is the opportunity to convert to gas as soon as there is a gas solution in the country with a steady and reliable availability of natural gas fuel. The capability is definitely there.

“It’s an issue on which we have been approached by a number of people, and from a shareholder and board perspective, one that we are looking at closely.”

However, for environmental groups such as Greenpeace, the Total exploration 175 km off South Africa’s coastline is “reckless,” warning of disturbances to marine life and averse global change impact.

ENVIRONMENTALLY AWARE As gas-fired power station operators, Avon and Dedisa are aware of the environmental and cost issues.

“South Africa is as concerned as the rest of the world, and gas is an issue that has been seriously investigated.

“The environmental awareness is there, and if you look at some of our shareholders you will see that Engie in particular, has embarked on a zero carbon transition and has halved its CO2 emissions between 2012 and 2018.

“De-carbonation is one of Avon and Dedisa’s main strategies, and each one of our shareholders is looking seriously into the ability to convert.”

Open cycle gas turbines use almost any hydrocarbon fuel from

AVON & DEDISA PEAKING POWER

high-octane gasoline to heavy diesel oils. And while higher operating cost is sometimes a criticism, Tebogo More says this is not an issue here.

“Peaking plants are not meant to be run for a long period. You are looking at about two hours a day depending on the peak times.

“So, in the grander scheme of things the numbers tally up. They only become expensive if they are then used as a base load - and we will definitely not get to that.”

Within a wide ownership structure, the role of the Peaker Trust, with its 10% share, has a special significance.

Established to promote and advance Broad-Based Black Enterprises, Peaker Trust dividends will go towards impacting individuals, including people with disabilities, establishing co-operatives, providing infrastructure to less fortunate areas, and contributing to local socioeconomic development initiatives.

The private-enterprise structure of Avon and Dedisa touches on another area of South African life – the issue of public confidence and trust.

A FUTURE FOR STATE/PRIVATE PARTNERSHIPS? With many Government-run businesses increasingly attacked for inefficiency and even corruption, could this privatestate partnership offer an example of sound working relationship?

“I think absolutely it does. For any country to thrive you have to have a very good balance, and a very good and transparent working relationship between government and the private sector.”

If South Africa is to sort out the energy crisis, says More, it is imperative the state and private sector work hand-in-hand.

“I don’t think the answer lies with either, but in a transparent partnership, with a combination of the skills and doing what we each do best.

“The private sector has a lot to offer in that it is not encumbered

Avon and Dedisa’s CEO Tebogo More

by the reputational damage, from which, let’s say, the public sector has basically suffered.

“At the same time, at the government level there is a much broader view of national needs.

“And of course, within the state sector you have pockets of excellence - and we certainly experience it with the teams we work with particularly from an Eskom perspective “Our relationship with Eskom is nothing short of completely professional and very knowledgeable.

We work very very well with them and have that essential transparency

and open communication. So there’s definitely a role to play from both sides.

“We want to be a value-added partner to the South African Government. And we can continue to do this by providing reliable power as and when we are called upon whether as a peaking operation or in sudden emergencies.”

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ENTERPRISE AFRICA

MAY 2019