Energy Focus - Q1 2017

THE BUSINESS MAGAZINE FOR ENERGY LEADERS

EMEA

ENERGYFOCUS

www.emea-energy.net

January 2017

KAMUTHI SOLAR POWER PROJECT:

A New World Solar

Colossus ALSO IN THIS ISSUE:

OGCI / E.ON / Total / Sasol

EDITOR’S LETTER EMEA

ENERGYFOCUS Joe Forshaw EDITOR joe@emea-energy.net Hal Hutchison SALES MANAGER hal@emea-energy.net Sophie Bolderstone SENIOR PROJECT MANAGER sophie@emea-energy.net Sam Hendricks SENIOR PROJECT MANAGER sam@emea-energy.net Shaun Cousins PROJECT MANAGER shaun@emea-energy.net Shannon James PROJECT MANAGER shannon@emea-energy.net Peter Littleboy PROJECT MANAGER peter@emea-energy.net James Clark PROJECT MANAGER james@emea-energy.net Jane Larkman ACCOUNTS MANAGER finance@emea-energy.net Harvey Tarlton SENIOR DESIGNER harvey@emea-energy.net

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Uncertainty seems to be a key theme as we begin 2017. Political, economic and financial instability all over the world has made for an energy industry that has an unclear path. Renewable energy has gained traction in many countries, nuclear power remains attractive for large and small nations, many new coal and oil and gas projects have been announced by the world’s leading energy businesses, and new and innovative energy solutions are also being sought for investment.

The OGCI, an organisation made up of some of the world’s most prominent energy businesses, has committed to spending $1 billion on new low emission technology.

One of the largest solar projects ever undertaken has been dedicated to the nation of India by its developers. Total has started installing solar panels across thousands of its service stations. E.On has started investing heavily in the USA, with transactions already complete in the renewable and technology segments. In this edition we discuss each of these investments and we also look at the current situation and future of power generation in South Africa, with stateowned nuclear company NECSA and private firms Mitsubishi Hitachi Power Systems and Sasol gearing up for a busy period working on major projects.

For these companies, the short-term future is already mapped but, like the rest of the industry, they too face uncertainty in the months and years to come.

Tell us how you’re dealing with doubt, indecision and hesitation – can you thrive in these challenging times? We’re online @EmeaEnergy

Joe Forshaw Published by CMB Multimedia

EDITOR

Chris Bolderstone – General Manager E. chris@cmb-multimedia.com Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-multimedia.com www.cmb-multimedia.com CMB Multimedia does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published.

All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Multimedia Ltd 2017

GET IN TOUCH +44 (0) 20 8123 7859 joe@emea-energy.net www.emea-energy.net

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06/NEWS: The Month that was...

A round up of some of the latest news stories in the industry.

54/EXHIBITION CALENDAR: Key Upcoming Events Across the Industry Our regular update to help you keep track of important events and exhibitions taking place across the industry.

10/TAMIL NADU SOLAR PROJECT: A New World Solar Colossus The Kamuthi Solar Power Project, recently completed in Tamil Nadu, has been hailed as the world’s largest solar power plant, with a capacity of 648 MW of clean, green power, enough to provide electricity to 150,000 homes.

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CONTENTS

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34/

46/

16/OGCI: $1 billion, 10 years, Emission Reduction?

34/NECSA: Eskom & NECSA to Spearhead SA’s Nuclear New Build

After meeting in London in November 2016, the heads of the 10 companies that make up the Oil and Gas Climate Initiative announced that it would invest $1 billion over the next 10 years in an effort to develop and accelerate the commercial deployment of innovative low emissions technologies.

A Cabinet announcement has confirmed that Eskom and NECSA will jointly lead South Africa’s Nuclear New Build. NECSA Chairman, Dr Kelvin Kemm, talks to us and confirms that this project is a major opportunity for the country, addressing a few concerns at the same time.

22/TOTAL: Committed to Better Energy

42/MITSUBISHI HITACHI POWER SYSTEMS AFRICA: At the Heart of Power Generation

As the world’s fourth-largest oil and gas company, with operations across more than 130 countries, Total is charged with three principal challenges: supplying affordable energy to a growing population, addressing climate change and meeting new customer expectations, while it also has major plans to dramatically overhaul electricity usage at a huge number of its service stations worldwide.

28/E.ON: Painting A New Energy Picture As of 2016, E.ON has focused wholly on its three core businesses of renewables, energy networks, and innovative customer solutions. This setup is designed to enable it to meet the challenges of a new, more sustainable energy world and prepare for the energy markets of the future.

Mitsubishi Hitachi Power Systems Africa is a technology and project management implementation company involved in engineering, supply, construction, commissioning, rehabilitation and the ser-vicing of thermal power plants in South Africa.

46/SASOL: Project Pipeline Strong for Sasol 2016 has seen Sasol complete some important projects that will assist the company to grow in the future. With a strong pipeline of projects to keep the energy and chemicals company busy in 2017, this is an exciting South African organisation that will continue to make the headlines for business excellence and success.

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BARAKAH NUCLEAR ENERGY PLANT 75% COMPLETE In the United Arab Emirates, at the Barakah Nuclear Energy plant, construction work has reached the 75% complete stage. Expected to begin operation between 2017 and 2020, the station will supply 5600 MW from four APR-1400 nuclear reactors.

The Emirates Nuclear Energy Corporation (ENEC) announced recently that construction of units 3 and 4 at the Barakah Nuclear Energy plant is now more than 50% complete with the final work on the Reactor Containment Building (RCB) for unit 3 almost complete and work on unit 4 moving quicker than predicted.

“The completion of the turbine generator operating deck and the setting of the final reactor containment liner plate rings on unit 4 has allowed work to begin on erecting the turbine building and the interior and exterior concrete for the unit’s RCB is now being poured,” said Ahmed Al Rumaithi, ENEC’s deputy CEO. “Once completed, we will be ready for the installation of unit 4’s Reactor Pressure Vessel in mid2017. The construction of Unit 4 is now 35% complete and is ahead of schedule, with the completion of the deck and rings having occurred roughly 10 months after similar work was concluded on Unit 3.”

Mohamed Al Hammadi, ENEC CEO said: “All construction milestones for the Barakah Nuclear Energy Plant project have been achieved in accordance with the highest standards of quality and safety.”

Construction started in 2012 and the building of the reactors is being undertaken by a Korea Electric Power Corporation (Kepco)-led consortium.

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TRAINS IN THE NETHERLANDS POWERED 100%

BY WIND Reports coming from the Netherlands in January suggest that the countries rail network is now running on 100% wind power.

In 2015, Dutch train companies teamed with energy business, Eneco, with the goal of reducing the emissions from train rides. The group set a target of powering trains by 100% renewable sources by 2018 but that goal has been achieved one year earlier than predicted.

Nederlandse Spoorwegen (NS) or Dutch Railways is the largest of the country’s providers, reportedly moving around 600,000 people every day. To do this, it requires 1.2 billion kWh of electricity a year. currently, the demand for wind power in the Netherlands greatly outweighs supply so Eneco has created a system which sees it purchase the over-supply of renewable energy from other nations – this is called procuring Guarantees of Origin (GoO).

Thanks to new wind farms being completed in the Netherlands, Belgium and Finland ahead of schedule, the target of powering trains with 100% renewable energy was able to be reached quicker. Industry commentators are calling it ‘an example to follow for train operators in other countries around the world’.

NEWS ROUNDUP RENEWABLE SUCCESS IN COSTA RICA In 2016, the Costa Rican power operator announced that the country had run on purely renewable energy for 250 days of the year. The country is home to just under five million people and gains most of its renewable energy from hydro resources fuelled by heavy rains and many rivers. Geothermal plants and wind turbines also add to the energy mix with biomass and solar contributing a small but growing share. Fossil fuel contribution comes from diesel burning power plants but these have been rarely used in the past 24 months. Renewable success is expected to continue through 2017 with four new wind power plants and ongoing favourable hydro energy conditions.

HANDENERGY CHARGER SET FOR MARKET Belarusian inventor, Michael Vaga, has succeeded inventing a mobile phone charger powered by the human body.

HandEnergy allows you to charge your phone by simply rotating your hand, activating the devices gyroscope which creates energy that can be used immediately or stored. 19-year old Vaga raised more than €70,000 through a Kickstarter campaign and took over one year to develop the device. He said it’s perfect for people who spend long periods away from a power source. It is expected to reach the market in March and reports say it will cost around £85.

BP AND PTT SIGN LNG SALE AND PURCHASE AGREEMENT BP and PTT Public Limited Company (PTT) have entered into a sales and purchase agreement for liquefied natural gas (LNG). BP will provide PTT with approximately one million tonnes of LNG each year for 20 years. LNG supply will commence in 2017 and will be sourced from BP’s diverse portfolio of LNG, including the Freeport LNG Project in the USA. Paul Reed, Chief Executive of BP Integrated Supply and Trading, said: “BP is pleased to conclude this LNG sale and purchase agreement with PTT, with whom we have a longstanding relationship. Thailand has become a significant LNG market and this agreement with PTT further demonstrates our LNG supply capability in the region.”

SHELL AGREES SALE OF STAKE IN VIVO ENERGY Shell has signed an agreement with Vitol Africa B.V. to sell its 20% shareholding in Vivo Energy for US$250 million.

Completion of this transaction is expected during the first half of 2017, subject to regulatory approval. The sale is in line with Shell’s strategy to concentrate its Downstream operations where it can be most competitive.

As part of the transaction, a long-term brand licence agreement has been renewed with Vitol to ensure that the Shell brand will remain visible in more than 16 countries across Africa.

UK & JAPAN IN NUCLEAR DEAL Britain and Japan have signed an agreement that significantly expands cooperation in the nuclear energy sector and paves the way for Japanese companies to construct nuclear plants in the UK. The memorandum of understanding was signed in Tokyo recently by Hiroshige Seko, the Japanese trade and industry minister, and Greg Clark, the business and energy secretary. One of the key components of the agreement is the proposals by Hitachi and Toshiba to build new reactors in Britain. Horizon Nuclear Power, bought by Hitachi from a German company in 2012, has delivered the outline of a project at Wylfa Newydd in Wales, and has plans to build as many as six reactors in the UK. Toshiba joint venture NuGeneration is planning a nuclear plant in Cumbria and is considering additional projects.

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US NUCLEAR POWER STATION BREAKING RECORDS The Columbia Generating Station, a nuclear power plant in the US state of Washington, celebrated a record breaking year when it was announced that it had produced 9.6 billion kWhrs of electricity in 2016, beating its previous record of 9.5 billion kWhs set in 2014.

Over the past three decades, the station has supplied energy to consumers in a safe and reliable fashion and, thanks to upgrades and effective maintenance, its output has been growing steadily.

The facility is operated by Energy Northwest, a non-profit organisation, and since 2011, there has been an extra 40 MW added at the station bringing its capacity to 1190 MW. The plant has run at 93% since 2012 making it extremely efficient.

“Columbia’s low-cost power is absolutely critical if we’re to achieve this state’s and the region’s clean energy goals,” Mark Reddemann, Energy Northwest CEO told Forbes. “I’m proud of the team for their hard work in setting this latest plant record.”

In April 2016, the American Public Power Association awarded Energy Northwest top spot in its Safety Excellence Awards with its overall safety score coming in at more than ten times better than the second-place finisher in its category. In December of last year, Washington State chamber of commerce, the Association of Washington Business, named Energy Northwest its 2016 Employer of the Year.

Brad Sawatzke, chief nuclear officer for the Columbia Generating Station said: “We continue to focus on performance excellence and the team’s response to adversity is one way it shines through.”

One of the key success factors with a nuclear facility like Columbia Generation Station is the fact that it uses such a small amount of fuel but creates such a large amount of energy. The Columbia Generating Station uses 5% of 20 tons of fuel each year to generate 9.6 billion kWhs of electricity whereas the states coal plant uses five million tons of fuel to produce the same amount of electricity but also creates two million tons of CO2 for the atmosphere.

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NEWS ROUNDUP STATOIL EXPLORATION DRILLING TO INCREASE IN 2017 The Norwegian energy giant has plans to drill 30 exploration wells this year, 30% more than 2016, and more than half of these will be on the Norwegian Continental Shelf.

Tim Dodson, Executive Vice President for Exploration at Statoil says: “Taking advantage of our own improvements and changed market conditions, we have been able to get more wells, more acreage and more seismic data for our exploration investments in later years.

“This allows us to firm up a strong drilling program for 2017, totalling around 30 exploration wells as operator and partner. The upcoming well program is balanced between proven, well known basins and new frontier opportunities.

“The Barents Sea has yielded several of Norway’s most significant oil discoveries in recent years. We are looking forward to test new targets, both in the relatively well known geology around in the Johan Castberg and Hoop/ Wisting area, as well as some new frontier opportunities with greater geological uncertainty but also high impact potential. This campaign can provide us with crucial information about the long-term future of the Norwegian shelf,” adds Dodson.

Statoil will also look for opportunities internationally in areas where it is already established and in new regions.

“Brazil has become even more important in Statoil’s portfolio, not least on the exploration front. We are stepping up exploration also in the UK, with plans for three Statoil operated exploration wells in 2017,” says Dodson.

Statoil is also partnering in onshore exploration drilling planned in Russia and Turkey.

“The 2017 exploration plans demonstrate our long-term commitment to the NCS, while we continue to position the company for global opportunities. If everything goes to plan, we will this year have exploration drilling activity in 11 countries on five continents,” says Dodson.

TIM DODSON - EXECUTIVE VICE PRESIDENT FOR EXPLORATION IN STATOIL. PHOTO OLE JØRGEN BRATLAND © STATOIL

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TAMIL NADU SOLAR PROJECT

A New World Solar

Colossus

PRODUCTION: Timothy Reeder

The Kamuthi Solar Power Project, recently completed in Tamil Nadu, has been hailed as the world’s largest solar power plant, with a capacity of 648 MW of clean, green power, enough to provide electricity to 150,000 homes.

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ENERGY FOCUS: SOLAR

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TAMIL NADU SOLAR PROJECT

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At a time when both pollution and the effects of climate change are at the forefront of the collective conscious almost everywhere in India, the news of this historic new project has been entirely welcomed across the country.

Set up by the Adani Group, the plant was formally commissioned by Chief Minister J Jayalalithaa in the Ramanathapuram district of Tamil Nadu at the end of September 2016.

The plant covers an area of 2,500 acres, built at a cost of $679 million, or Rs 4,500 crore. It contains 2.5 million individual solar panels, which are cleaned on a daily basis by a robotic system itself charged by solar power, and as such making it a selfsustaining system.

The plant forms part of the state government’s target of generating 3,000 MW from solar sources, as set out in its new solar energy policy which was unveiled sometime ago in 2012. While highly ambitious, this goal is recognised as being wholly attainable through such commitment and investment as that shown in the development of this colossal new solar structure.

Adani Green Energy (Tamil Nadu) Ltd, a part of the globally integrated infrastructure player Adani Group, sourced equipment and machinery from across the globe in order to complete the entire 648 MW set up within a record time of just eight months, in the face of monsoons and floods, thanks to a team of around 8500 personnel averaging around 11 MW of installation per day.

Following this achievement, Adani Group Chairman Mr Gautam Adani spoke of the importance of the newly completed project to the country’s future aims as a whole.

“This is a momentous occasion for the state of Tamil Nadu as well as the entire country,” he summated. “We are extremely happy to dedicate this plant to the nation; a plant of this magnitude reinstates the country’s

ambitions of becoming one of the leading green energy producers in the world. I would like to express our deepest gratitude to the Honorable Chief Minister and the government of Tamil Nadu for their valuable support and guidance in achieving this gigantic feat.”

By 2022, India aims to power 60 million homes by harnessing energy from the sun, part of the government’s goal of producing 40% of its power from non-fossil fuels by 2030. This is an aim that has been praised by environmental groups, and one which it is hoped will also help to reduce the country’s problem with air quality. To further underline the importance of immediate action, New Delhi, a city of 16 million people, ranks among the world’s mostpolluted cities and its quality of air once again plunged at the end of 2016. Smoke and fog were observed laying heavily across India’s northern plains, a thick blanket of toxic smog triggered by India’s north-easterly monsoon, signalling an end of the summer rains and a change to drier weather for most of the country.

This comes about as the moisture feed is cut off, with the winds now effectively draining in cool air from the Himalayas, a stable set up which is unfortunately ideal for the development of fog. This fog is in turn mixed with smoke from burning crops in agricultural states across the northern plains and traffic emissions, to create the adverse conditions recorded in this recent plummeting of air quality. When added to that emitted by the firecrackers set off to mark the festival Diwali, weather scientists were able to report that the air pollution had hit “severe” levels, with the pollutants breaching the 1,000 microgram mark in the Indian capital as it shot up nearly 10 times above normal levels.

The setting up of the 648 MW Solar Power Plant in Tamil Nadu is a significant aspect of the

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ENERGY FOCUS: SOLAR

Adani Group’s current policy of revolutionising the renewable energy ecosystem of India in light of such pressing need, through the building of solar power plants, solar parks and manufacturing facilities all with seamless integration. The colossal Kamuthi plant consists of 3.38 million foundations, 2.5 million solar modules, 27,000m of structure, 576 inverters, 154 transformers and over 6,000km in length of cables, with the entire plant completed and ready to generate its stated 648 MW of clean and green energy. Vneet Jaain, CEO of Adani Power, commented: “Before us, the largest solar power plant at a single location was in California in the U.S. That was 550 MW and was completed in around three years. We

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wanted to set up a solar plant of 648 MW in a single location in less than a year.” It marks the kind of take-up required in what is a fast-growing solar power industry, if India is to achieve the ambitious targets set out by the government.

The entire 648 MW of Kamuthi is now connected with the 400 KV substation of Tantransco, which makes it the largest solar power plant at a single location, a title previously held by the Topaz Solar Farm in California referred to by Vneet Jaain.

This new plant has helped to push India’s total installed solar capacity past the 10 GW mark, according to a statement by research firm Bridge to India, seeing it join only a handful of countries that can make this claim.

As solar power increases, India is expected to become the world’s third-biggest solar market as of next year, trailing only China and the US. Gautam Adani finished by telling Newsweek: “We have a deep commitment to nation-building. We plan to produce 11,000 MW of solar energy in the next five years, putting India on the global map of renewable energy.”

TAMIL NADU SOLAR PROJECT +91 79 2656 5555 @AdaniOnline www.adani.com

TOTAL

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OGCI

$1 billion, 10 years,

Emission Reduction?

PRODUCTION: Karl Pietersen

After meeting in London in November 2016, the heads of the 10 companies that make up the Oil and Gas Climate Initiative announced that it would invest $1 billion over the next 10 years in an effort to develop and accelerate the commercial deployment of innovative low emissions technologies.

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ENERGY FOCUS: OIL & GAS

THE OIL AND GAS CLIMATE INITIATIVE

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Made up of BP, CNPC, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total, the Oil and Gas Climate Initiative (OGCI) is an organisation of CEOs which aims to ‘show sector leadership in the response to climate change’. Founded in 2014, the OGCI was originally led by six multinational oil and gas companies but has grown over time. It was devised at the 2014 World Economic Forum Annual Meeting, and was officially launched at the UN Secretary General’s Climate Summit in New York in September 2014.

The players involved are heavyweights in many respects; leaders in their industries and further afield, educated and knowledgeable beyond most, they have the combined experience of hundreds of years with some of the most important decisions in global energy, control over serious amounts of money, and the ability to influence strategy.

The 10 companies involved are responsible for more than one-fifth of global oil and gas production and over 10% of energy supply.

The operations of this group of companies contribute to global carbon emissions and of course, this has resulted in comment that all 10 could do more to ensure a healthy future for the planet and so, in November, a big announcement was made.

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The OGCI said that, to aid in its ongoing focus of reducing carbon emissions (they claim that there has been a 20% reduction since 2005), it will contribute $1 billion over the next ten years to develop and accelerate the commercial deployment of innovative low emissions technologies.

The investment will be delivered through a new unit, the OGCI Climate Investments (OGCI CI), and will complement the companies’ existing low emissions technology programs, drawing on the collective expertise and resources of the member companies to accelerate the deployment of carbon capture, use and storage; and reduce methane emissions from the global oil and gas industry in order to maximize the climate benefits of natural gas. The OGCI CI will also identify ways to cut the energy intensity of both transport and industry as the organisation believes the benefits it derives from technology advancement and innovation can span various industry sectors.

“The creation of OGCI Climate Investments shows our collective determination to deliver technology on a large-scale that will create a step change to help tackle the climate challenge. We are personally committed to ensuring that by working with others our companies play a key role in reducing the emissions of greenhouse gases, while still providing the energy

the world need,” said the 10 CEOs in a joint statement.

One of the drivers behind the decision to make an investment of this kind was the COP21 agreements, where nearly 200 countries agreed to keep global warming below 2°C and continue cutting in the future, and the OGCI offered their full backing.

“Our shared ambition is for a 2°C future. It is a challenge for the whole of society. We are committed to playing our part. Over the coming years we will collectively strengthen our actions and investments to contribute to reducing the GHG intensity of the global energy mix. Our companies will collaborate in a number of areas, with the aim of going beyond the sum of our individual efforts,” a joint statement read.

The announcement of the $1 billion has been met with a frosty reception from commentators who think that more could, and should, be done.

James Murray, Editor of businessGreen.com wrote: “$10m per company, per year, with a chunk of it going on tackling methane leaks they should be fixing anyway, is disgracefully short-sighted.

“It’s less than BP boss Bob Dudley’s salary, it’s 0.004% of Shell’s annual turnover, it’s a damn sight less than any of these companies spend on advertising and lobbying. “[The] announcement is also an

OGCI

opportunity missed - an opportunity that is as gargantuan as OGCI’s new fund is miniscule.”

Stuart Haszeldine, Professor of Sedimentary Geology at the School of GeoSciences, University of Edinburgh, highlighted the figure from the OGCI relative to other areas of expenditure: “BP has been allocating $600M per year to R&D, decreasing to $400M in 2015. Shell spends near double – over $1,000M in 2015. In a sector needing to keep innovating for survival, chemicals company BASF spends $1,300 rising in 2015 to $1,900M per year on R&D. Or, in terms of normal business, how much do OGCI members spend on finding more oil and gas each year: The cost of an offshore borehole is typically $70M – and Shell alone spends $4,000 to 5,000M per year on exploration to find new fossil carbon production. Suddenly $10M each year from each sponsor looks more like the drinks bill after a

CEO away-weekend.”

But there was some positive response. Most commentators admit that investment of any size into low emissions technology is a good thing, especially when it comes to carbon capture technology. This type of innovation has been earmarked as a real solution to reducing carbon created during the generation of electricity, but it remains an elementary idea due to cost of research and available technology.

In the OGCI’s 2016 report, the group stated that this investment is just the beginning; the first step in a long-term commitment.

“Our $1 billion commitment is significant in itself but it is just our starting point. It can be amplified in many ways. We will leverage additional funds by working in partnership with like-minded initiatives across all stakeholder groups. We will increase

investment ourselves by deploying successful low emissions technologies in our own businesses and operations.

We will use the considerable convening and catalytic power of our expertise, facilities and networks to galvanize action both within our industry and beyond.”

Amin Nasser, chief executive of Saudi Aramco, said: “Oil will continue to be part of the energy mix for decades to come.”

Bob Dudley, Chief Executive of BP and OGCI chairman, said: “We all absolutely realise the world will move to a low-carbon world. Don’t worry, we got it. The technology to monitor and reduce fugitive methane [gas] emissions, that is an essential licence for us to advocate for natural gas.”

Patrick Pouyanné, CEO of Total, said the technologies the new fund would back were vital: “It is a matter for us of being able to maintain our business in

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ENERGY FOCUS: OIL & GAS

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OGCI

//THE CREATION OF OGCI CLIMATE INVESTMENTS SHOWS OUR COLLECTIVE DETERMINATION TO DELIVER TECHNOLOGY ON A LARGE-SCALE THAT WILL CREATE A STEP CHANGE TO HELP TACKLE THE CLIMATE CHALLENGE// the future.”

Defending the relatively small size of the fund, Josu Jon Imaz, CEO of Repsol, said: “The target of this fund is to be a seed, a catalyst.”

Shell CEO, Ben van Beurden, said: “We cannot burn all the hydrocarbons on the planet in an unmitigated way but there is also another truism that there is no alternative to using some hydrocarbons for a very long time to come.”

Of course, the investment is also

important internally for each company as these organisations that have been traditionally so successful with oil and gas look to broaden their horizons.

Scientists have calculated that half of all known gas reserves and a third of oil reserves cannot be burned if the world is to meet the Paris limit of 2°C of warming and climate change lobbyists are arguing that coal, oil and gas should be left in the ground so this is a turning point for oil and gas majors.

With this first step on the road

to a cleaner energy future, the OGCI has made its intention clear and as long as this intention is driven from all 10 sectors of the partnership, this investment (however small you may think it is) could be a catalyst for change.

“Next year we will look at the technologies and options that could be compatible in the longer term with the very ambitious goal of net zero emissions in the second half of the century.”

OGCI contact@oilandgasclimateinitiative.com www.oilandgasclimateinitiative.com

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TOTAL

Committed to

Better Energy PRODUCTION: Timothy Reeder

As the world’s fourth-largest oil and gas company, with operations across more than 130 countries, Total is charged with three principal challenges: supplying affordable energy to a growing population, addressing climate change and meeting new customer expectations, while it also has major plans to dramatically overhaul electricity usage at a huge number of its service stations worldwide.

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ENERGY FOCUS: SOLAR

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TOTAL

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Total’s history is one which dates back almost a century, to the creation of Compagnie Française des Pétroles (CFP) in the 1920s, which at the time produced oil exclusively in the Middle East. In the ensuing years it has continued to expand internationally and has since diversified into refining, petroleum product marketing and chemicals, with nearly 100 years of growth and development seeing it now stand as a leading global energy company, on the cutting edge of innovation.

Today, it seeks to become the responsible energy major, committed to finding solutions to the challenge of climate change while supporting social and economic development worldwide by providing affordable, sustainable energy.

Whether the issue at hand is climate change, demographic growth or economic development, energy is inextricably intertwined with the key questions facing the world at the present time, crucial in meeting such vital needs as food, warmth, light and transportation. Total is positioned to address what is has identified as the key challenges that lie ahead in the next 20 years, not least among which is to meet the needs of a growing world population, to which it is working to supply affordable energy that meets the highest safety and environmental standards. Additionally, in order to tackle climate change it is developing an energy mix consistent with the IEA’s all important 2°C scenario, and seeks to anticipate customer needs and be recognised for its convenient, quality local service by introducing innovative solutions to promote responsible energy use.

According to Patrick Pouyanné, Chairman and Chief Executive Officer of Total: “Oil and gas are expected to continue making up nearly 50% of the primary energy mix in 2035.

That means we will still be an oil and gas major, ready to meet this

demand. But our ambition is to leverage our talents to become the leader in responsible hydrocarbons, with a strong development focus on renewable energies. That’s what being committed to better energy is all about.”

At the close of 2016 Total set itself a monumental challenge, and one which is sure to see many other companies following suit. It aims, within five years, to equip 5,000 of its service stations worldwide with solar panels, a number which includes 800 in France alone. The total solar capacity to be installed is in the region of 200 MW, the equivalent amount of electricity required to power a city of 200,000 people, while the project represents an investment on Total’s part of around $300 million.

SunPower, an affiliate of Total and a global leader in photovoltaic solar energy, develops, manufactures and operates the world’s highest performing solar systems for homeowners and businesses, and is responsible for the supply of the panels to be used in this huge project.

Philippe Sauquet, President of Gas, Renewables & Power at Total, said of the innovation: “The project is fully aligned with Total’s ambition of becoming the responsible energy major and its commitment to developing solar power. It will reduce our carbon emissions by 100,000 tons per year and cut our electricity bill by $40 million per year. The panels will be supplied by our affiliate SunPower, which offers the world’s most efficient solar technology.

This project demonstrates Total’s confidence in SunPower, especially its ability to bring our customers competitive, clean energy.” Not only will the development bring significant cuts to Total’s electricity bills each year, but additionally will reduce its annual carbon emissions by 100,000 tons annually.

While US-based SunPower

operates independently, it has worked with Total on other solar projects, like converting Santiago, Chile’s subway system to run on solar and wind power - the first time solar power will supply such a significant amount of power for a subway system, to the second largest subway system in Latin America with 100 stops, no less. Under agreement with Metro of Santiago, the subway system will receive 300 gWh of electricity each year from the 100 MW SunPower and Total El Pelícano Solar Project, with SunPower to start finalise plans this year, and power expected to be provided by the end of 2017.

“SunPower is proud to serve Metro of Santiago’s growing energy demand with cost-competitive, renewable solar power,” said Eduardo Medina, executive vice president, global power plants, SunPower. “Solar is an ideal energy source for Chile because of the country’s high solar resource and transparent energy policies. In partnership with Total, SunPower is committed to the continued growth of our business in Chile.”

Marking one of Total’s largest forays into the solar PV sector, the announcement of its solar intentions came merely days after the company’s CEO was one of ten oil and gas figureheads to sign a $1 billion investment pledge for clean energy technology development.

The Oil and Gas Climate Initiative (OGCI) is to invest $1 billion over the next ten years in the development and deployment of innovative low emissions technologies, an unprecedented level of clean investment from the oil and gas community intended to be used to augment and complement many of the companies own carbon reduction programs.

“The creation of the OGCI Climate Investments shows our collective determination to deliver technology on a large scale that will create a step change to help tackle the climate

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ENERGY FOCUS: SOLAR

challenge,” read an OGCI statement issued jointly with the heads of the key 10 oil and gas companies. “We are personally committed to ensuring that by working with others, our companies play a key role in reducing the emissions of greenhouse gases, while still providing the energy the world needs.”

Unquestionably, energy is at the heart of the challenges faced by us all to keep the global average temperature rise below 2°C. Patrick Pouyanné spoke at length of its importance to shaping Total’s strategy in years to come. “Keeping the global temperature rise below 2°C is a challenge everyone must meet,” he stated. “The next 20 years will be decisive in building a low-carbon

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future that does not curb economic and social development. In 2040, the global population is projected to be nine billion. That includes two billion people in Africa alone, where over 600 million people today do not have access to electricity. That figure worldwide is 1.2 billion. I believe our main responsibility is to help provide safe, affordable energy solutions to as many people as possible, while managing energy consumption and the related emissions.

“Doing this will entail improving energy efficiency across the board, optimising the fossil fuel mix and accelerating the development of renewable energies. Our ambition is to position Total as a global leader in these three priority areas and

drive progress.”

The Group was able to report strong performances universally in the first nine months of 2016.

Pouyanné gave a snapshot of the achievements to date: “Total once again reported solid quarterly results with adjusted net income of $2.1 billion and operating cash flow before working capital changes of $4.5 billion. The Group increased cash flow by 13% compared to the second quarter 2016 despite a 27% reduction in European refining margins and flat Brent prices. Total continues to benefit from its integrated business model and is responding effectively to short-term challenges due to good operational performance and strong cost discipline.”

TOTAL

Clearly, the world needs energy. But more than this, it needs better energy to ensure sustainable, responsible growth.

Given Total’s ambition is to become the responsible energy major, it is unwaveringly committed to providing a trio of energy products.

Chiefly is the offering of safer energy, protecting the health and guaranteeing the safety of its employees, host communities and customers, primary among its priorities. This also encompasses anticipating and managing environmental risks which may centre around its plants, an aspect which remains a key focus throughout its operations.

Total is equally committed to

cleaner energy, by which it means energy that is friendlier to the local environment and preserves the global climate balance of our planet. This is where its less carbonintensive energy mix comes into play, alongside improving the energy efficiency of its plants and products and developing renewable energies in line with the integral parts of its development strategy. Finally, Total has recognised the need to offer more affordable energy that creates value. It is firmly behind the belief that growth can only be sustainable if it is shared. In its own words: “Making a commitment to better energy means enabling as many people as possible to access affordable, safe energy, at a time when 1.3 billion

people still do not have electricity.

It also means contributing to the development of our host countries and ensuring that our operations create value and opportunities by supporting employment, training and the local industrial fabric.�

TOTAL 020 7339 8000 www.total.co.uk

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E.ON

Painting A New

Energy Picture PRODUCTION: Timothy Reeder

As of 2016, E.ON has focused wholly on its three core businesses of renewables, energy networks, and innovative customer solutions. This setup is designed to enable it to meet the challenges of a new, more sustainable energy world and prepare for the energy markets of the future.

ENERGY FOCUS: RENEWABLES

//

Renewable energy solutions such as wind and solar have, in recent years, reached a cost level comparable to that of conventional generation technologies. As a result, renewables now represent a viable alternative energy supply for more and more customers, whose expectations and roles are evolving in substantial ways at the same time. No longer do they see themselves exclusively as the recipients of power, gas, and heat service, but are instead taking an ever-greater interest in the sustainability of their energy supply, and from where exactly it is being sourced.

On top of these changing

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customer needs, policy and regulatory decisions of recent years have helped to place an increasing emphasis on renewables, as well as distributed generation and energy efficiency, which sees the traditional energy value chain fragmenting into an increasing number of discrete market segments. This has created a new energy world, one which naturally offers considerable growth potential and will experience more dynamic growth as it continues to play an increasingly significant role in many countries. Alongside this newly-emerged energy picture, the conventional energy generation world will continue to exist and remain indispensable for ensuring

a reliable power supply as demand continues to grow worldwide.

As a result of this dual concern, companies like E.ON who are capable of actively shaping the consolidation of Europe’s generation market will be able to not only strengthen their market position, but also gain clear competitive advantages. Globally, energy demand continues to rise, which creates clear opportunities for energy trading and, potentially, serves to prompt a recovery of wholesale energy prices. Both the new and old energy worlds offer abundant market and growth opportunities, and in response to what is a fundamentally altered market environment, E.ON has

E.ON

elected to divide into two distinctly focused and financially strong publicly listed companies. This freshly structured E.ON focuses on the demands of the new energy world, with its having separated into two smaller, more dynamic companies serving to consolidate the competitive position of both E.ON and the newly-created Uniper, which focuses on the classic energy world.

Johannes Thyssen, Chairman of the E.ON SE Management Board and Chief Sustainability Officer, sums up E.ON’s approach to the changing energy landscape. “Energy markets are changing rapidly, and competition is keen,” he states.

“Hardly anyone could’ve imagined it, even just a couple of years ago.

A new energy world is emerging, one that’s decentralised, green and interconnected. E.ON’s entire

business is now geared toward this emerging world. We’re the first large energy company in Europe to be so resolute in our focus on the future energy world and its customers.

Our three core businesses reflect key global energy trends: the transformation of yesterday’s power lines into tomorrow’s smart energy networks, the global growth of renewables as people worldwide do their part to tackle climate change, and the increasing demand for innovative customer solutions.”

Since 2007, E.ON has invested in

excess of €10 billion in renewables, a commitment which helped it to produce some 10.5 TWh of renewable-source electricity in 2015, sufficient to power over 2.6 million homes. It has installed to date more than 2,500 onshore and offshore wind turbines and this makes E.ON the world’s second-largest offshore wind operator, with such a deep experience in renewables giving E.ON the capabilities and expertise to bring the new energy world to life. By 2025, its aim is to have renewables account for at least 80%

//ALL OF OUR NEW CORE BUSINESSES ARE GEARED TOWARD SUSTAINABLE GROWTH//

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ENERGY FOCUS: RENEWABLES

of its installed generating capacity, combining the best technology with the construction of these wind and solar farms at the most productive locations in order to prise the absolute most out of renewables energy sources.

Perhaps most indicative of the fervour with which E.ON approaches the future of energy generation is on show in its work in the US, where it continues to successfully extend the reach of its renewables arm. The close of 2016 saw the commencement of construction of its Radford’s Run Wind Farm in Macon County, Illinois, whose 278 MW of installed capacity will make it the second largest wind farm in Illinois, and already the third project E.ON is undertaking in this state. Investment

by E.ON will run close to USD$500 million into Radford’s Run, formerly known as Twin Forks, with the project expected to be completed by the end of 2017. When operational the wind farm will create enough electricity to power a city with approximately 90,000 homes, employing exclusively 139 of Danish turbine producer Vestas’s 2 MW turbines.

Such endeavours are, in turn, allowing E.ON to secure the sale of its renewable energy to the market via further long term contracts. Johnson & Johnson, the world’s biggest maker of health-care products, recently agreed to buy half of the output from E.ON’s 200 MW wind farm, Colbeck’s Corner, in the Texas Panhandle, signing a 12-year power purchase agreement. Colbeck’s Corner is expected to provide around 60% of Johnson & Johnson’s electricity consumption in the U.S, and 25% globally. Named in honor of Doug Colbeck, an E.ON employee and wind park developer who died from a serious illness, Colbeck’s Corner is the 20th wind farm that E.ON has put into operation in the US, and altogether throughout North America the company has built wind

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projects with a volume of 3 GW. These serve to make it one of the primary operators of onshore wind farms in the US. Digital Realty, a leading global provider of data centre, colocation and interconnection solutions, also signed a long term clean energy agreement to use 400.000 MWh of the power produced by Colbeck’s Corner annually, equivalent to removing 58,000 cars from the roads. Through its experience and willingness to innovate, E.ON has managed to again dramatically reduce the cost of onshore wind power, with the budget for Colbeck’s Corner 40% lower than the comparable investments made in the Pyron wind farm, built by E.ON in 2009.

Not restricting itself solely to investing in farms themselves, E.ON also continues to promote innovation by investing strategically in start-ups which boast intelligent solutions, and will help to shape the future energy market. To date, E.ON has taken stakes in more than a diverse portfolio of more than a dozen startups in the United States, Europe, and Australia, and most recently chose to back Greensmith, one of the largest providers of energy storage software and integration services. Its mission is to make energy storage a fundamental part of a cleaner, more intelligent and distributed energy infrastructure.

“The energy industry is undergoing a fundamental transformation, and E.ON is committed to empowering its customers and promoting decentralised energy solutions while expanding our power grids and making them smarter,” said Susana Quintana-Plaza, Senior Vice President Technology & Innovation E.ON SE. “As such, we needed a partner that could deliver superior results. Greensmith’s innovative software and extensive experience in both battery and PCS

integration and control will enable us to extend our energy storage activities and to provide better solutions to our customers.”

In the midst of particularly challenging market conditions, E.ON’s most recently available 2015 operating results were still in line with expectations. At last September’s annual results press conference CEO Johannes Teyssen expressed that: “We posted solid operating results in a very difficult market environment. Our numbers reflect the far-reaching structural transformation that our industry is

E.ON

experiencing and that continues unabated in the current year. Our strategy of having E.ON and Uniper focus on their respective energy world is the right response to this transformation. But,” he added by way of warning, “the course ahead will be tougher and longer than anticipated.”

As Thyssen explains, E.ON’s restructuring of its business, and in turn of the energy world as a whole, will all be achieved with a keen eye on the sustainability aspect of its operations. “All of our new core businesses – renewables,

energy networks, and innovative customer solutions – are geared toward sustainable growth,” he says. “This new setup will enable us to do an even better job of integrating sustainability into our business processes, meeting our shareholders’ needs, and creating value for communities and for society at large. We intend to get our employees more involved and do more to put sustainability into action at our company. We’ve already taken some important steps in this direction, such as reestablishing an independent sustainability

department. Our sustainability team is currently working in close consultation with our newly constituted Sustainability Council to design a new sustainability strategy for E.ON,” he concluded.

E.ON +44 24 7642 4000 info@eon.com www.eon.com

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NECSA

Eskom & NECSA to Spearhead SA’s Nuclear New Build

PRODUCTION: David Napier

A Cabinet announcement has confirmed that Eskom and NECSA will jointly lead South Africa’s Nuclear New Build. NECSA Chairman, Dr Kelvin Kemm, talks to us and confirms that this project is a major opportunity for the country, addressing a few concerns at the same time.

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ENERGY FOCUS: NUCLEAR

//

In November, it was announced that South Africa’s ambitious Nuclear New Build programme would be led by a joint procurement team made up of the country’s power utility, Eskom, and the South African Nuclear Energy Corporation, NECSA. After a long period of uncertainty surrounding the project, this Cabinet announcement solidified the country’s position on adding 9600 MW of nuclear power to its energy mix.

Dr Kelvin Kemm, Chairman of NECSA and CEO of Nuclear Africa, a long-time advocate of nuclear energy, tells us that NECSA is pleased with the announcement and is eagerly awaiting the commencement of the bidding process.

“Eskom will be responsible for the construction of the power stations and NECSA will be responsible for the fuel cycle – everything from mining through

to nuclear waste. That doesn’t mean we’re going to get into mining but anything nuclear will need Eskom and NECSA working together on it,” he says.

“Progress is continuously being made. The announcement concerning the initiation of bidders is imminent and is currently in the hands of the Minister of Energy.

“The probable site has been identified and is now in the hands of the Minister of Environmental Affairs. There’s more than 10 years’ work that has been completed including environmental and legal requirements and the final recommendation for the site near Port Elizabeth has been delivered to the Minister. We could start work on the site very quickly, without deciding on any foreign partners. There’s roads, bridges, water, electricity, and harbour access and a great number of things that can be given attention.

MAKING OUR WORLD

SAFER.

TÜV NORD Southern Africa is a Broad-Based Black Economic Empowerment Compliant company and supports the upliftment of economic opportunities of South Africa’s designated groups.

It has achieved a BEE Level 2 status through its ownership, management, procurement policies and workforce.

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CONTACT ----------

TÜV NORD

Unit G3 & G4, Bayside Office Park 41/43 Erica Road Tableview, 7443 Tel.: +27 21 521 6800 Fax: +27 21 557 4405 icoza@tuv-nord.com

“We are looking at three new nuclear power stations, in different locations, totalling 9600 MW. On each site there will be either two or three reactors depending on discussions with potential bidders.

“The bid process will go rapidly.

In 2014, all countries in the world that have potential suppliers were invited to come to a vendor parade in the Drakensberg Mountains. Everyone was given the opportunity to bring as many people as possible so that we could fully understand everything that could be put on the table. Now we are getting ready to send out the bid and then build on those initial discussions.”

MISCONCEPTIONS Following the announcement that NECSA and Eskom will work together to spearhead the Nuclear New Build programme, there was some concern raised by anti-nuclear lobbyists who see the project as too expensive, unnecessary, and rushed. Dr Kemm is quick to counter those concerns, especially those surrounding cost, and says that the whole idea has been wellconsidered and meticulously planned.

“The anti-nuclear lobbyists talk as if we have foolish people on the engineering side and foolish people on the finance side. Of course, that is not true. Our scientists and financiers are equal to the world’s best. People act as if three or four engineers sat around a table and made a snap decision – that’s crazy,” he explains. “There were many people putting in hundreds of thousands of hours of formal investigation. There’s also a thought that to calculate cost, we just take the price of the most expensive reactor in the world and roughly exchange it into our currency – that’s just totally inaccurate.

“The price of R650 billion is a cost that was calculated by nuclear engineers at North West University who have taken a keen interest in nuclear financing and who have been studying financing and economics from an engineering perspective. At NECSA,

NECSA

we have contracted consultants from London to calculate the costs and they came up with around R750 billion.

There’s quotes in newspapers of R1 trillion or even R2 trillion and these figures are not referenced and cannot be trusted at all.

“The scientists are saying 650, foreign consultants are saying roughly the same, and we know pretty accurately exactly what we want so the next step is for bidders to offer what they think is suitable and we will negotiate with them. We’re not going to accept whatever anyone tells us. We will negotiate what we do, how we do it and who does it.

“When people say that we have no idea what we want to buy and we’re starting at step one, that is completely untrue – we are far down the road.

We will be getting a generation 3+

pressurised water reactor system. We know the size and the general specs and it’s just a case of finding which suppliers fit into our extensive plans.

“It’s a common misperception that a foreign country could get the contract and overnight they will arrive and build a reactor and hand it over.

That will not happen.

“There’s another misconception that the entire capital cost for all three power stations, that will be built over a ten-year period, will all be paid on day one. That is not at all how this is planned. It’s a much more phased and staged approach,” he says.

EXPANDING WITH MEDICAL Last month, we discovered more about NECSA’s nuclear medicine business and CEO, Phumzile Tshelane told us that South Africa is the second

biggest market share holder in the world, behind only Canada. NECSA and its subsidiaries export a range of products such as Molybdenum-99m and Iodine-131 all over the world and both Tshelane and Dr Kemm are keen to see this side of the business grow.

“NECSA has been working for some time on a new nuclear reactor to be installed in parallel to SAFARI-1. It will be a CP (commercial production) reactor, as one of its prime jobs will be to produce more nuclear medicine so that we can expand our footprint in that market,” says Kemm.

“The primary market for our products has been diagnostics for diseases such as cancer. The therapeutics market is now starting to grow – where you can administer a higher dose in a carefully targeted

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ENERGY FOCUS: NUCLEAR

manner, irradiating the cancer from the inside-out rather than using existing methods which work from the outside-in. We see the diagnostic market still in its early growth stages but the therapeutics market is even more infantile and so there’s massive growth potential.

We also see the possibility of putting nuclear medicine centres in a number of African countries – we’re busy developing a plan right now and we’d welcome African nations to contact us in this respect. We would like to see our medical products placed there and other African medical professionals liaise with our medical people to build up centres of excellence to which we could supply.”

Of course, in Africa, the challenges of supplying nuclear medicines are unique but Kemm is confident that NECSA’s African heritage gives it an advantage.

“Half of our success is related to the fact that we can make the isotopes. The other half is down to our excellent logistics and how we move the isotopes all over the world, to more than 60 countries. Because the isotopes are so short-lived, we have to get them from the reactor to the patient in under 36 hours so we have become good at moving products fast.

“The logistical challenges in Africa are immense. We understand them because we live here and we are not daunted by a few thousand kilometres that doesn’t have roads or infrastructure.”

To date, there has been no firm order placed for a new CP reactor but NECSA has been considering various designs. The new reactor will not be a be a research reactor and SAFARI-1 will continue to be used for research purposes. “We believe there’s still 20+ years in SAFARI-1 and there’s no vision of it closing down anytime in the next couple of decades,” says Kemm.

“We’re proud of the fact that SAFARI-1 has performed at more than

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100% of its scheduled capacity in the previous year. It’s widely regarded as the most effectively utilised reactor of its class in the world so we’re proud of our staff who have kept it going 24 hours a day, seven days a week, beyond the 100% capacity mark.”

EXCITEMENT IS BUILDING A big benefit behind the nuclear idea is the amount of fuel required to power a station. A coal fired power station of a similar size to Koeberg Nuclear Power Station would use roughly six train loads of coal every day. Right now, Koeberg uses one truck full of nuclear fuel each year.

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ENERGY FOCUS: NUCLEAR

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NECSA

//ESKOM WILL BE RESPONSIBLE FOR THE CONSTRUCTION OF THE POWER STATIONS AND NECSA WILL BE RESPONSIBLE FOR THE FUEL CYCLE// DR. KELVIN KEMM NECSA CHAIRMAN

You could store that amount in your garage – how do you store 2190 trains of coal? NECSA is already hugely experienced in the fabrication of fuel elements and management of the nuclear fuel cycle, and this experience will be invaluable in the future.

“This is a wonderful opportunity for NECSA and for South Africa,” says Tshelane. “NECSA is fully cognisant of the responsibilities and aspirations it will carry for the country and for the nuclear industry worldwide. This obligation will be delivered with due diligence and transparency, in line with developing South African nuclear technology to contribute to the economy, and to localisation in the Nuclear New Build programme, leading to employment opportunities and enhanced industrial skills.”

The opportunities for economic development are massive and with the government looking for a big part of the design and build to be handled by locals, the prospects for the country and its nuclear industry

are obvious.

“South Africa is aiming for 50% localisation which we do have the capability to achieve,” explains Kemm.

“High-precision machining, project management, welding, and all those things, we have already got up to standard – we just need to integrate them. South Africa built Koeberg this way 40 years ago and it was perfectly successful. It’s a French design but it wasn’t built by French hands. When you went to the site, you saw South Africans everywhere, building the reactor.”

Away from South Africa, there is equal appetite for the project with other nations keeping a close eye on progress, hoping for inspiration and direction for their own plans.

“We’re extremely excited. I’ve been invited to talk all over the world, in Vietnam, Turkey, Russia, Paris and many other places, and everywhere I’ve found great enthusiasm for what we’re doing. Everyone tells me they’re watching us with keen

interest because if we can pull it off as well as they hope we will then it will provide inspiration. I’ve also received correspondence from the US, the UK, France, India and other countries, stating that they’re right behind us as they’re inspired by how our plans are unfolding.”

With Eskom and NECSA now confirmed as the joint procurement team, it’s now just a matter of time before more momentum is added to this quickly moving project, taking South Africa closer to the beginning of one of the most exciting energy projects in the world.

NECSA +27 12 305 4911 webmaster@necsa.co.za www.necsa.co.za

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MITSUBISHI HITACHI POWER SYSTEMS AFRICA

At the Heart of

Power Generation

PRODUCTION: Timothy Reeder

Mitsubishi Hitachi Power Systems Africa is a technology and project management implementation company involved in engineering, supply, construction, commissioning, rehabilitation and the ser-vicing of thermal power plants in South Africa.

//

While the company in its present form was only established very recently, in March 2014 following the merger of the power activities of Mitsubishi Heavy Industries and Hitachi Power, this belies what is a long and proud history of involvement in South Africa which dates back to the 1960s.

MHPSA is a technology and project management implementation company which has involvement in the spheres of engineering, supply,

construction and the servicing of thermal power plants in South Africa.

It is a globally focused energy plant constructor which describes itself as, “bent on becoming the world’s number one” in conventional power plant construction.

Central to its establishment of such a strong current presence in South Africa has been MHPSA’s work on the Medupi and Kusile power station contracts in Lephalale, located in Limpopo Province and eMalahleni,

Mpumalanga Province respectively.

These involve the construction of six 800 MW boilers for each project, which when completed, will account for more than 20% of South Africa’s total power generation capacity.

Not only are the Medupi and Kusile projects currently the largest power generation projects in South Africa, they are also the largest coal-fired steam generator projects in Africa as well as the largest air cooled plants in the world.

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ENERGY FOCUS: THERMAL

Medupi is also the first supercritical power station on the African continent, with 1400 artisans, 60 engineers and numerous maintenance workers being trained in highly technical skills to benefit job creation and ensure the sustainability of the industry well into the future.

Medupi will be the fourth largest coalfired power plant, and will also be among the biggest power plants that MHPS has built, boasting a planned operational lifespan of some 50 years.

The Medupi and Kusile power stations are slated for completion in 2019 and 2020, respectively, with two power stations set to offer a combined 9,600 MW highefficiency power generation.

At the time of its launch in 2014, MHPSA’s chief executive officer for South African operations, Stephen Moore, commented on how, “the Mitsubishi and Hitachi merger [would] create a new group of companies endowed with a high level of technical competence and a wide product range creating new and exciting business opportunities in Africa.” Alongside this, he pointed to the combined might which could be tapped by the merger of two such significant forces. “MHPSA

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has acquired HPA’s management and employees and will conduct its business from the premises previously occupied by HPA. Consequently, business continuity will be maintained and the transition will be seamless. The formation of this merger is good news for all concerned; the strength of MHPSA will certainly benefit the delivery of the Medupi and Kusile power station projects,” he concluded.

The drawing together of the two companies under the Mitsubishi Hitachi Power Systems Africa umbrella sought primarily to integrate both parties’ power generation systems operations, each of them with long histories and strong traditions, and to subsequently accelerate its global expansion while building an efficient and stable business operation base. MHPSA is equally serious about overcoming global energy and environmental issues through its highly efficient geothermal power generation technology, Gas Turbine Combined Cycle power plants, Integrated Coal Gasification Combined Cycle power generation and air pollution control equipment.

The primary business of MHPSA

since its inception has been the twin concerns of Medupi and Kusile, following the award of the two power station contracts in 2007 and the manufacturing of whose boilers commenced in 2009, and it follows that there have been a number of important mile-stones in the ensuing years. Not least among these was the synchronisation of Medupi’s Unit 6 with the National Grid on 2 March 2015, which enabled it to deliver its first power to the grid. MHPSA’s boilers provide the very heart of each unit at the power station, and produce the steam that drives the turbine generators so central to the project as a whole.

“We were especially proud of the contribution that our team made in supporting Eskom as it achieved this important milestone,” said MHPSA, as it shifted its focus to Unit 5 as the next to come on line, and then swiftly onto the remaining boilers at Medupi and Kusile. In the same year, MHPSA successfully delivered Medupi’s Unit 6 boiler for commercial operation on 23 August, with official opening coming at the close of the month. This was conducted by President Jacob Zuma, and witnessed by a number

MITSUBISHI HITACHI POWER SYSTEMS AFRICA

of other high profile dignitaries including Public Enterprises Minister Lynne Brown, Energy Minister Tina Joemat Pettersson and Eskom’s Acting Chief Executive Brian Molefe. With South Africa currently taking steps to strengthen its power generation capacity to cope with the country’s rapid industrial expansion, the completion of the Medupi and Kusile power stations will bolster Eskom’s power supply capability by 20%, set to make a huge contribution to the South African economy.

There was much to report form Kusile over the same period, with the last of its four new Wolff 1250B cranes installed at the end of September 2015.

The first of these heavyweights, fondly referred to as Kusile’s “red elephants”, was installed in February this year between Units 2 and 3. The second is situated between Units 3 and 4,

the third between Units 4 and 5 and the fourth between Units 5 and 6. “In the past, the company hired crawler cranes from various suppliers, but it was extremely costly and the biggest problem with these type of cranes is the space which they occupy on the pad,” explained Stanley Langkilde, Construction Services Manager at Kusile, before going on to underline the improved efficiency which would be brought by the new arrivals. “The Wolff cranes will reduce the overall project duration due to their faster operating speed and they are better suited to erect tower boilers.”

Amongst such innovative and vital work safety must be of paramount importance. The Kusile Boiler team notched up 2,500,000 lost time injury free hours in August last year, the significance of which use not be underestimated as it ramps up progress

on these colossal projects. “We want to thank everyone for the part they played in achieving this milestone,” said MHPS Africa CEO Toshinori Shigenaka.

“Without you this success would not have been possible. We are mindful of the fact that working safely is what differentiates us in an industry where serious injuries and fatalities are a reality. We continue to count on the support of our experienced employees in reaching the highest safety standards worldwide.”

MITSUBISHI HITACHI POWER SYSTEMS AFRICA +27 11 260 4300 www.mhps.co.za

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SASOL

Project Pipeline

Strong for Sasol PRODUCTION: Karl Pietersen

2016 has seen Sasol complete some important projects that will assist the company to grow in the future. With a strong pipeline of projects to keep the energy and chemicals company busy in 2017, this is an exciting South African organisation that will continue to make the headlines for business excellence and success.

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ENERGY FOCUS: OIL & GAS

//

PETROCHEMICAL PIPING SERVICES (Pty) LTD SCOPE OF BUSINESS PPS offers a shop fabrication service, as well as a field installation and maintenance service.PPS also has the project management skills to offer statutory and shutdown maintenance projects on a turnkey basis.

SERVICES Workforce are qualified in accordance with ASME IX and are experienced in the application of fabrication codes ASME VIIIDIV 1 & 2 • • • • •

Shutdown maintenance General installation & maintenance Equipment modification Turnkey Projects Shop Fabrication

HEAD OFFICE

FOR

44 Drakensberg Street, Secunda, 2302 P.O. Box 7781, Secunda, 2302 Tel: (017)631 2586 Fax: (017)631 3728 E-Mail – anaude@petropiping.co.za

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• • • •

Pipe Systems Structures & Walkways Tanks Pressure Vessels

SITE OFFICE

SSF – Pipe shop c/o Road 10 & 2D Sasol Site, Secunda, 2302 Tel: (017)610 3020 Fax: (017)610 4612 E-Mail – reception1@mweb.co.za

Rosebank-based Sasol is one of South Africa’s corporate success stories – founded in 1950 as a coalto-liquids (CTL) synthetic fuels producer, today the company is an international integrated chemicals and energy company with more than 30,000 employees across 33 countries, listed on the JSE and NYSE. The success of the business over the years has created a platform on which significant growth has been achieved, at home in South Africa and also in foreign markets, including North America. That growth will continue as we move into 2017 as Sasol recently unveiled the C3 Expansion Project, a major capital expansion project in South Africa.

Part of Sasol’s dual-regional, multi-asset hub growth strategy in Southern Africa and North America, the C3 Expansion Project enables Sasol to increase its polypropylene production capacity by 103,000

Sasol

tons per annum (to more than 625,000 tons per annum) from its Secunda Chemicals Operations, while also realising improvements in environmental impact.

As one of the world’s most widely used petrochemical products, polypropylene is a versatile polymer which has a variety of applications including packaging for consumer products, plastic parts for various industries including the automotive industry, fibres, hygiene products, yoghurt tubs, paint containers, car batteries, garden furniture, carpets, and film and textiles.

The company has been producing polypropylene since 1990 but the C3 Expansion Project’s specific goal was to reduce the percentage of propylene not utilised in the production of higher

SASOL

//WE WILL CONTINUE TO FOCUS ON PURSUING ZERO HARM, BUILDING A RESILIENT ORGANISATION FOR THE FUTURE, NURTURING OUR FOUNDATION BUSINESSES, DELIVERING SUSTAINABLE GROWTH AND CLARIFYING OUR FUTURE INVESTMENT OPPORTUNITIES// value chemicals.

“This particular investment further entrenches Sasol as a global chemicals player. With more than R1 billion invested, we are proud to unveil yet another major capital investment in South Africa, our home.” said Stephen Cornell, Joint President and Chief Executive Officer, Sasol Limited.

The increase in polypropylene production will service both local

and export markets, with local consumption growing by more than 4% year-on-year for the past five years and export markets (including China, South America, Europe, the US and the rest of Africa) taking more than 420,000 tons.

“It was a three-year effort to design and construct this project, creating almost 1000 jobs during construction. The increased capacity was made possible by de-

VGI Consulting (Pty) Ltd is a proud Multidisciplinary Engineering, Procurement and Construction Management service provider to Sasol since the early 1970’s. Some of our recent projects which were successfully completed for Sasol include the following: • 140 Km 26” Natural Gas Rompco loopline 2 in Mozambique • 150 Km 26” Natural Gas pipeline between Secunda and Sasolburg • 146 Km 10” Multiproduct pump line between Secunda and Sasolburg • New Alrode Bulk fuel storage depot • Upgrading of the Pretoria West Bulk storage depot.

VGI Consulting (Pty) Ltd. is one of the leading multidisciplinary consulting Engineering, Procurement and Construction Management (EPCM) companies in South Africa specializing in Petrochemical, Civil and Structural projects, with more than 45 years’ relevant experience. We provide a one stop engineering, procurement, project and construction management service, including all required engineering disciplines to our clients.

VGI Consulting is a member firm of Consulting Engineers South Africa (CESA). To protect the interests of our clients we are insured under a Professional Indemnity Policy. VGI has an IRCA 5-star safety rating and is a ISO 9001:2008 registered company.

Address: Highgrove Park nr 4, C/O Olivenhoutbosch and Tegel avenues, Highveld Postal Address: P.O. Box 68968, Highveld, 0169 Email: info@vgi.co.za Tel: +27(0)12 682 9140

www.vgi.co.za

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ENERGY FOCUS: OIL & GAS

bottlenecking our existing plants, with most of the work being done while the plants were operational,” Cornell said.

The investment was welcomed

by Deputy Finance Minister, Mcebisi Jonas who said: “The reality is that our success as an economy will depend on the extent to which we can leverage the economy from capital. Without investment there is no growth.”

SEISMIC IN THE INDUSTRY Another area of great potential was discussed by Sasol in October when the company announced the completion of the first-ever 3-D onshore seismic programme in Mozambique. Having previously worked offshore Mozambique, 1,836 km2 and 2,100 km2 in the M10/Sofala and Blocks 16/19

//THE ACQUISITION OF THE 3-D SEISMIC DATA IN THE INHASSORO FIELD WILL SIGNIFICANTLY ENHANCE OUR UNDERSTANDING OF THE STRUCTURE OF THE OIL ACCUMULATIONS THROUGH BETTER RESOLUTION AND MORE DEFINED CHARACTERISATION OF THE RESERVOIRS// respectively, Sasol is experienced in the country but this is the first time a 3-D seismic campaign has been conducted onshore.

Completion of the programme involved acquisition of 115 km2 of data in the Inhassoro field, in the south east of the country, part of the onshore Production Sharing Agreement (PSA) licence area. The plan is to develop in phases with the

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Phakisa Holdings is people driven, resulting in a customer focused commitment, allowing us to become a leading brand in reliability as a business partner for turnkey human resources and strategic labour logistics intervention solutions.

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50 / www.emea-energy.net

first phase of the PSA licence area proposing an integrated oil, LPG and gas project adjacent to Sasol’s existing Petroleum Production Agreement (PPA) area.

Sasol showed its ability when it comes to developing international relationships, contracting Polish company Geofizyka Torun to acquire 2D/3D seismic data using Vibroseis trucks. In a similar way to

Sasol

SASOL

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how ultrasound is used in medical applications, the trucks send an acoustic wave into the ground and the response of reflection between rock layers is measured, creating an image of the subsurface and helping to determine future well locations.

“The acquisition of the 3-D seismic data in the Inhassoro field will significantly enhance our understanding of the structure of the oil accumulations through better resolution and more defined characterisation of the reservoir. While initial results appear encouraging, it is still too early to give further detail,” said Senior Vice President for Sasol Exploration and Production International, John Sichinga.

The wider project is something which Sasol has been focussing on for some time and the first well was drilled back in May. Sasol has

indicated that the first phase of this project will cost approximately US$1,4 billion.

“The tests conducted thus far have produced encouraging results.

During the course of the drilling of the second well, we encountered previously unknown accumulations of hydrocarbons within the development and production area, which indicate the presence of both gas and oil. We have issued a Notice of Discovery to the Mozambican authorities as per the PSA and will continue our evaluation of the data,” said Sichinga.

Sasol already has a central processing facility in the region, servicing its developments at the Pande and Temane fields.

RECORD PRODUCTION These stories of growth and

advancement are backed by a strong Sasol financial position which, in September, reported solid operational per formance across most of the value chain, record production volumes at Secunda Synfuels Operations but with some disappointing elements including a decrease in operating profit mainly due to a slowdown in global commodity pricing.

Joint President and Chief Executive Officer Sasol Limited, Bongani Nqwababa said of the results for the year ending 30 June 2016: “We have been working together over the last six months to clearly define how we will lead Sasol, address the challenges the company is facing and pursue the exciting opportunities ahead.

“Sasol’s global operations continue to per form well, with

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ENERGY FOCUS: OIL & GAS

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眀眀眀⸀渀攀眀愀最攀ⴀ攀渀最⸀挀漀洀 52 / www.emea-energy.net

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Sasol

our Secunda Operations reporting record production volumes. Our cost reduction and cash savings initiatives are exceeding their targets, which places us on a sound footing as we gear up our balance sheet to complete the world-scale, company-changing investment in Louisiana in the US.” Sasol is currently working on a $8 billion petrochemical complex Lake Charles, between New Orleans and Houston, in the south-western corner of the US state of Louisiana. A ground breaking even was held in March 2015. Sasol also hope to build a larger gas-to-liquids plant at the site.

Stephen Cornell said: “Although the capital expenditure for our Lake Charles Chemicals Project has increased, we remain

confident that the fundamental drivers for this investment are sound. The cost and schedule review process, which was completed in August 2016, has set a solid platform for the continued execution of this project. In Mozambique, we continue to advance our growth projects to further develop our footprint in that region. We look forward to building on Sasol’s past successes, as we lead the company forward and continue to grow in both Southern Africa and North America.

“In the medium-term, we will continue to focus on pursuing zero harm, building a resilient organisation for the future, nurturing our foundation businesses, delivering sustainable growth and clarifying our future

SASOL

investment opportunities.”

As we move to the end of the calendar year and enter 2017, Sasol will concentrate on building its focused and strong project pipeline in order to create value sustainably. Completion of the C3 Expansion Project and the company’s progress in Mozambique will help strengthen the already robust platform from which this SA giant continues to grow.

SASOL +27(0) 11 441 3111 investor.relations@sasol.com www.sasol.com

ᰠ匀瀀攀挀椀愀氀椀猀攀搀 䔀氀攀挀琀爀椀挀愀氀 愀渀搀 䤀渀猀琀爀甀洀攀渀琀愀琀椀漀渀 匀漀氀甀琀椀漀渀猀ᴠ

⠀ ㄀㄀⤀ 㐀㘀㄀ 㘀㐀 ㈀

www.emea-energy.net / 53

EXHIBITION CALENDAR //TABLE OF ALL EVENTS:

KEY UPCOMING EVENTS ACROSS THE INDUSTRY Our regular update to help you keep track of important events and exhibitions taking place across the energy sector.

WORLD FUTURE ENERGY SUMMIT Abu Dhabi National Exhibition Centre Jan 16 – 19

EUROPEAN GAS CONFERENCE Imperial Riding School Renaissance Vienna Hotel Austria Jan 23 – 25

OIL & GAS IP SUMMIT Hilton London Olympia Jan 25 - 26

EUROPEAN GAS CONFERENCE JAN 23 | VIENNA In recent years, the gas market has undergone tremendous shifts with the emergence of new supply sources, the comeback of coal in the power sector, the decline of domestic production and the severe fall in oil and gas prices. However, one fact remains certain: gas is and will remain a central pillar of the European energy mix and promoting mutually beneficially relationships with Europe’s major supplier key.

With 432 participants, 12 sponsors and 30 hours of networking in 2016, the 2017 Summit will set new levels of attendance and engagement through stimulating panel discussions, insightful presentations and invaluable networking opportunities for the European gas community.

WORLD FUTURE ENERGY SUMMIT JAN 16 | ABU DHABI The World Future Energy Summit (WFES), part of Abu Dhabi Sustainability Week, celebrates its 10-year anniversary in 2017. Already the world’s most influential event dedicated to advancing the use of renewable energy, energy efficiency and clean technology, to mark this milestone, exciting changes are

54 / www.emea-energy.net

being made to the exhibition and conference that will make it the most interactive and inspirational to date.

Within the exhibition, dedicated country pavilions will enable attendees to meet with influential industry and government figures.

In 2016, the exhibition at the World Future Energy Summit brought together 600 companies from 32 countries and more than 30,000 attendees from 150 countries, making it an essential place to network and seek new business opportunities.

OIL & GAS IP SUMMIT JAN 25 | LONDON A sub-$50 oil price has been crippling for an oil and gas industry that was used to the heady days of $100 for a barrel of the Black Gold.

As companies are the battening down the hatches and preparing for further woe, intellectual property departments are ramping up to protect and monetise their innovations. Or is that just lip service in a strained commercial environment? In the following infographic based on the results from our global database of Oil and Gas IP professionals we look at what those working in IP have in the pipeline for 2017.

MIDDLE EAST AND NORTH AFRICA ENERGY Chatham House, London, UK Jan 23 – 24

POWER TECH AFRICA Crowne Plaza, Nairobi, Kenya Jan 30 – 31

INTERNATIONAL CONFERENCE ON PETROLEUM AND PETROCHEMICAL ENGINEERING Chateau De Bangkok, Bangkok, Thailand Jan 21 – 23

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