Energy

Energy development zones will boost employment.

Credit: Kangnas Wind Farm

Four of the 11 Renewable Energy Development Zones (REDZs) planned for South Africa are located in the Northern Cape. With the majority of the country’s solar photovoltaic energy projects occurring in the province, the renewable energy sector is becoming a key economic driver for the region.

REDZs will encourage localisation through the development of manufacturing hubs that can make components for the sector.

Planned Special Economic Zones (SEZs) being phased in across the

Northern Cape will complement this trend.

REDZs are being developed in support of the implementation of the national Integrated Resource Plan (IRP 2019). One of the Strategic

Transmission Corridors identified at national level, the Northern

Corridor, begins at Springbok in the west and runs through Upington and Vryburg on the way to Johannesburg in Gauteng. Each of those towns will be the focus of an REDZ, with the other REDZ in the province located in the provincial capital of Kimberley.

To assist investors, a One Stop Shop is to be launched in the

Northern Cape. Invest SA, through the Department of Trade, Industry and Competition (dtic) will provide investing companies with advice and services to fast-track projects and reduce red tape.

Toyota SA’s Dealer Environmental Risk Audit Programme requires dealers to reduce waste and pollution and expend less energy, among other things in a 16-point checklist. In 2018 Upington Toyota won Eco Dealer of the Year, not least because of the dealership’s 540m² roof which has hundreds of solar panels capturing the steady Northern Cape sunshine. Once national policy gives the green light, Upington Toyota will be able to feed the excess power that it generates on weekends into the grid.

Although the Northern Cape is increasingly seen as a solar power hub, large wind projects are also winning approval and coming on stream at a good rate. The 140MW Kangnas Wind Farm near Springbok started commercial operations in November 2020, thus becoming the first project approved under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 4 to start generating power to the grid.

The commissioning of the 100MW De Aar Wind Power Project brings together Mulilo Renewable Energy and the China Longyuan Power Group Corporation.

Commercial operations have begun on Khobab Wind Farm and Loeriesfontein Wind Farm, collectively providing 280MW via 61 wind turbines. The projects were developed by Lekela Power,

SECTOR INSIGHT The Toyota dealership in Upington generates more electricity than it needs.

a joint venture between Actis and Mainstream Renewable Power, as the Kangnas project was. Noblesfontein was one of the earliest wind farms to be constructed in the Northern Cape, about 40km from Victoria West. Spanish company Gestamp Wind was an early investor.

The 147MW Roggeveld Wind Farm, which has 47 Nordex wind turbines and was developed by G7 and then taken over by Building Energy, will operate commercially in the first quarter of 2021.

A Renewable Energy Directorate is to be established by the Provincial Government of the Northern Cape. The brief of the directorate is to assist local and district municipalities to create revenue streams related to renewable energy.

Industry associations claim that benefits are indeed being shared with local communities. Figures released by the South African Wind Energy Association (SAWEA) showed shareholding for local communities reached an estimated net income of R29.2-billion for projects initiated nationally since 2012. Some 14 000 new jobs are expected to be created, mostly in rural areas, and more than R30billion has been spent on Black Economic Empowerment (BEE) in the construction phase.

In less than a decade, an entirely new sector has been created through legislation that invited local and foreign investors to bid for and then build renewable energy generation plants. South Africa’s National Development Plan (NDP) requires 20 000MW of renewable energy by 2030. That will be achieved mainly through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Solar power

Approximately 60% of the projects so far allocated have been in the nation’s sunniest province. Projects such as Kathu Solar Park, a concentrated solar power (CSP) project, and the Roggeveld Wind Farm are indicative of the large scale of most of the energy generation that is being rolled out.

Xina Solar One is located at Pofadder on the N14 between Upington and Springbok. The R9.4-billion project is a joint venture between Spanish energy firm Abengoa Solar, the Industrial Development Corporation (IDC), the Public Investment Corporation (PIC) and a community trust representing the local population. Kaxu Solar One is also near Pofadder but Khi Solar One is closer to Upington. All three plants use concentrated solar power (CSP) which reflects the sun’s rays during the day in to a molten salt storage system. The energy is then slowly released during the night. The 205m tower that collects the rays at the Khi Solar One site is one of the tallest structures in South Africa.

The Northern Cape is the natural home for the generation of solar power. Long-term annual direct normal irradiance (DNI) at Upington is 2 816kWh/m2 , according to a survey done for Stellenbosch University by Slovakian company GeoModal Solar. South Africa’s national average is among the best in the world. Stellenbosch University’s Solar Thermal Energy Research Group has six sites monitoring irradiation levels.

Saudi Arabian electricity group ACWA Power has won approval for the 100MW Redstone project near Postmasburg and the 50MW Bokpoort CSP plant near Groblershoop is in operation. ■

ONLINE RESOURCES

IPP projects: www.ipp-projects.co.za National Energy Regulator of South Africa: www.nersa.org.za South African Photovoltaic Industry Association: www.sapvia.co.za South African Renewable Energy Council: www.sarec.org.za South African Wind Energy Association: www.sawea.org.za

Petroleum Agency South Africa

Unlocking South Africa’s resources for economic growth.

Petroleum Agency South Africa (PASA) is the official agency responsible for the promotion and regulation of South Africa’s petroleum resources. The agency regulates and monitors exploration and production activities and is the custodian of the national exploration and production database for petroleum. Its role was statutorily endorsed in June 2004 in terms of the Mineral and Petroleum

Resources Development Act of 2002.

In terms of strategy, the agency actively seeks out technically competent and financially sound clients to whom it markets acreage, while ensuring that all prospecting and mining leases are for the long-term economic benefit of South Africa.

Mission

To promote, facilitate and regulate exploration and sustainable development of oil and gas contributing to energy security in South Africa.

Vision

A diverse upstream industry contributing to energy security through sustainable growth in exploration and development of oil and gas.

Value statement

Petroleum Agency SA aspires to be a world-class organisation, committed to: • Professional excellence • Integrity • Direct, open, consultative communication • Transparency • Respect • Teamwork • Active regard for our natural environment • Corporate social responsibility in an empowering,

vibrant workplace where diversity is valued. • Exploration activities are encouraged and regulated both offshore and onshore.

Onshore

Petroleum potential of the Karoo Basins: The Karoo Supergroup occupies half of South Africa’s surface area and current exploration is focussed on shale gas, coalbed methane and biogenic gas. The development of a natural gas resource in the Free State Province is an example of the latter.

Coalbed methane resource potential: Permian high-volatile bituminous coal deposits in the northern Karoo-aged basins comprises a potential energy resource for South Africa.

In 2019 PASA awarded oil and gas exploration licences to six companies for an area of 30 000km2 in the Free State, Northern Cape and North West.

Offshore

Major steps have been taken in the creation of a South African gas market with two major discoveries off the coast South African coast near Mossel Bay. Says the CEO of Petroleum Agency SA, Dr Phindile Masangane, “The recent discovery by Total and its JV partners in Block 11B/12B (Brulpadda) is the first giant step in that direction.”

Odfjell’s Deepsea Stavanger semi-submersible oil rig relocated from Norway to South Africa in December 2018 to start exploratory drilling at the Brulpadda site. The team returned in August 2020 to drill at another site called Luiperd – and found even more gas reserves. Analysts believe that these two finds could be gamechangers for the South African economy.

The exploration drilling is in deep waters similar to where the gigantic Mozambique Rovuma Basin gas discoveries were made in 2010. The drilling campaign has long-term benefits to South Africa which include introducing frontier deep-water exploration drilling, building confidence and potentially shifting petroleum exploration activities to private international oil companies (IOCs), derisking deep-water acreage which is believed to be prospective for large oil and gas resources.

Petroleum Agency SA: promoting and regulating exploration and production.

Petroleum Agency SA evaluates, promotes and regulates oil and gas exploration and production activities in South Africa and archives all relevant geotechnical data. The Agency acts as an advisor to the government and carries out special projects at the request of the Minister of Mineral Resources and Energy.

South Africa’s energy mix is changing to include more gas through importing liquefied natural gas (LNG), using shale gas if reserves prove commercial, and developing infrastructure for the import of LNG. Petroleum Agency SA plays an important role in developing South Africa’s gas market by attracting qualified and competent companies to explore for gas. Another major focus is increasing the inclusion of historically disadvantaged South African-owned entities in the upstream industry.

Currently, natural gas supplies just 3% of South Africa’s primary energy. A significant challenge facing the development of a major gas market is the dominance of coal. Opportunities for gas lie in the realisation of South Africa’s National Development Plan (NDP) and the Integrated Resource Plan (IRP). As custodian, Petroleum Agency SA ensures that companies applying for gas rights are vetted to make sure they are financially qualified and technically capable, as well having a good environmental track record. Oil and gas exploration requires enormous capital outlay and can represent a risk to workers, communities and the environment. Applicants are therefore required to prove their capabilities and safety record and must carry insurance for environmental rehabilitation. ■

Contact details

Tel: +27 21 938 3500 Email: plu@petroleumagencysa.com Website: www.petroleumagency.com

PASA’S NEW CEO HAS A BACKGROUND IN ENERGY POLICY AND STRATEGY

Dr Phindile Masangane was appointed as the CEO of the South African upstream oil and gas regulatory authority, Petroleum Agency South Africa, in May 2020. Before then, Dr Masangane was an executive at the South African state-owned energy company, CEF (SOC) Ltd, which is the holding company of PASA.

Dr Masangane was responsible for clean, renewable and alternative energy projects. In partnership with private companies, she led the development of energy projects including the deal structuring, project economic modelling and financing on behalf of the CEF Group of Companies. Her responsibilities also included supporting the national government in developing energy policy and regulations for diversifying the country’s energy mix.

In 2019, Dr Masangane was Head of Strategy for the CEF Group of Companies where she led the development of the group’s long-term strategic plan, Vision 2040+ as well as the group’s gas strategy.

From 2010 to 2013, Dr Masangane was a partner and director at KPMG, responsible for the Energy

Advisory Division. She successfully led the capital raising of $2-billion for hydro and coal power plants expansion programmes of the Zimbabwean power utility, ZESA/ZPC. An alumnus of three universities, Dr Masangane has a BSc (mathematics and chemistry) from the University of Swaziland, a PhD in Chemistry from Imperial College, London and an MBA from the University of the Witwatersrand. ■