Action in energy arena needed

Business Report, Liz McDaid, Robert Fischer, Yvette Abrahams 18 December 2012.

Once the brouhaha around who will lead the ANC for the next five years is out of the way, those at Mangaung this week have a bigger dilemma on their hands.

With rising unemployment, an ever widening gap between rich and poor, and mounting social unrest, the ANC is arguably in one of the toughest spots it has been in since coming to power. It has to act decisively to deliver on its promises of a better life for all or risk losing credibility.

One opportunity for decisive action lies in the energy sector, where many of these challenges converge. Key decisions here will have massive impacts on national debt, social equity and job creation in the years to come, to say nothing of environmental consequences.

Access to modern energy services is considered to be a key aspect for improved economic development and reducing inequality. The many economic and social benefits that accrue to humanity in general and the poor in particular, from access to electricity, for example, are covered by a vast body of respected research…

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Eskom in power at all costs

Mail and Guardian 9 November 2012.

Independent power producers could provide more than 60000MW of conventionally produced electricity, according to the department of energy.

This is nearly twice the total capacity now produced by Eskom – and it could be brought to market for far less than what Eskom charges, according to its critics.

But consumers are bearing the brunt of what appears to be the state’s determined policy to maintain Eskom’s role as the primary source of electricity-generation. This is clear from Eskom’s latest tariff application, the third multiyear price determination. It outlines the painful tariff increases in store for the country if Eskom remains the dominant source of electricity…

(Editor’s note: Well, Eskom is owned by our government … Note the comment that the IRP2010 did not need to be reviewed now because the assumptions are unchanged. I beg your pardon DOE – a lot has changed: Gas is cheaper, nuclear is more expensive, all renewable energy is cheaper, the demand forecasts are lower, economic growth forecasts are lower, etc, etc!!!)

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Strong support for SA’s renewables model as first deals are concluded

Engineering News 5 November 2012.

There was an overwhelmingly positive reaction from developers, investors, financiers and suppliers on Monday, November 5, to the eventual signing of the agreements needed to facilitate the entry of the first large-scale renewable-energy projects into South Africa, some of which should begin producing during 2014.

By midday, the South African government, Eskom and the independent power producers (IPPs) began physically signing the power purchase, implementation and direct agreements for projects, collectively representing an investment value of around R47-billion and wind and solar capacity of around 1 415 MW…

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CIG secures R570m for grid connections

Cape Times 31 October 2012.

CONSOLIDATED Infrastructure Group (CIG) secured contracts worth R570 million to connect independent renewable energy power producers to the national grid. Approval for a further R400m in deals was pending, said Raoul Gamsu, the company’s chief executive.

All systems go for Nov 5 signing of first R47bn in renewables projects 29 October 2012.

Following several delays, government confirmed on Monday that the framework is now in place for the first 28 wind and solar projects, identified as preferred bidders under South Africa’s Renewable Energy Independent Power Producer Programme (REIPPP) in December 2011, to move to financial closure.

Energy Minister Dipuo Peters apologised for the delays, but said that preferred bidders should be prepared to begin signing the final agreements from November 5.

The contracts associated with all 28 projects would have to be concluded in a single day, rather than over several days as originally envisaged…

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Eskom seeks yearly increases of 16% to 2018i

Engineering News 22 October 2012.

State-owned electricity utility Eskom has submitted its third multiyear price determination period (MYPD3) application to the energy regulator, in which it is requesting average yearly tariff increases of 16% for the five-year period from April 1, 2013, to March 31, 2018.

The utility indicated on Monday that, if granted, the increases would raise the price of electricity from 61c/kWh currently to a nominal 128c/kWh by 2017/18, or to 96c/kWh real at the conclusion of the tariff period…

(Editor’s note: There are some confusing calculations in this article, for instance: “… industrial customers receive a 21% average yearly hike over the period, from 57.2c/kWh to 69c/kWh…”. This incorrect, 57.2c esacalated by 21% of ONE year is 69.2c, for five years it comes to 148.4c/kWh. Similarly ” municipal tariffs were set to rise by an average of 13% a year over the period, from 57.3c/kWh to 64.9c/kWh.” 57.3 escalated by 13% for ONE year comes to 64.7, but for five years comes to 105.6.)

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Jubilee to sell electricity to Eskom

Engineering News 17 October 2012.

JOHANNESBURG ( – Aim- and JSE-listed Jubilee Platinum has received approval from the National Energy Regulator of South Africa to start selling electricity to national power generating company Eskom.

Sales of electricity are expected to start on October 26.

Jubilee currently has a 51% interest in power generating company Power Alt as previously announced has entered into a process of acquiring an additional 19% interest…

(Editor’s note: I wonder how much Eskom is paying for the power? Power Alt have an 18 year contract for the supply of Sasol gas for the 10 MW reciprocating gas engine of the power station.)

See the Power Alt NERSA application from 2010.

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