Weekly projects and energy updates in South Africa

NERSA caps Eskom tariff hike at 2.2%

The National Energy Regulator of SA (NERSA) said on Thursday Eskom’s tariff increase for 2017-18 would be limited to 2.2% when the new prices come into effect on 1 April.

The decision is based upon methodology applied by NERSA that has a complex five-year tariff system informed by what it considers "allowable revenue".

As Eskom is able to make corrections over the five years to recoup additional revenue it can demonstrate it is entitled to over and above the agreed 8% tariff increase, the reconciliation over the five years now only allows for 2.2% in 2017-18, NERSA said. The coming year is the last of the five-year period.

Business Day, 24 February 2017

OUTA calls for Eskom’s stranglehold over the grid to be broken

The Organisation Undoing Tax Abuse (OUTA) lodged a complaint with the Competition Commission to seek its ruling and recommendation to both fine and unbundle Eskom, due to monopolistic control and conduct of electricity supply and pricing in SA.

OUTA wanted the commission to investigate the possibility of breaking Eskom into two distinct corporations that separately control electricity generation and transmission, both owned by the state, the organisation said on Tuesday morning.

The separation of Eskom’s grid was originally the government’s policy, articulated in the Independent System and Market Operator (ISMO) bill drafted in 2004 and subsequently passed by Parliament.

Business Day, 23 February 2017

Silence over nuclear because there is no call for more cash — not yet

The three-year budget tabled by Finance Minister Pravin Gordhan made no mention of nuclear procurement, which the Department of Energy and Eskom continue to champion.

The omission came on the same day that civil organisations’ legal challenge to the secrecy of SA’s nuclear procurement programme was back in the High Court in Cape Town.

Asked why he had made no mention of nuclear, Gordhan said the procurement process, which will be run by Eskom, was in its early stages, and the matter of funding had not yet arisen. In 2016, the Treasury allocated ZAR200 million to the Department of Energy to kick-start the planning process and hire transaction advisers.

Business Day, 23 February 2017

Electricity-mix model shows South Africa won’t need to trade off clean for low-cost

The steep decline in wind and solar photovoltaic (PV) costs means that South Africa will not need to make the traditional trade-off between investing in either clean or least-cost electricity production, as the “cost-optimal mix” for South Africa is now also the cleanest, research conducted by the Council for Scientific and Industrial Research (CSIR) Energy Centre shows.

The techno-economic model run by the CSIR employs the same assumptions used by the Department of Energy (DoE) to produce the draft Integrated Resource Plan (IRP) Base Case, which was published for public comment in November. However, it lifts the yearly limits placed on the amount of wind (1600 MW) and solar PV (1000 MW) that can be introduced and uses the 62c/kWh prices achieved in the most recent bid-window of South Africa’s renewables procurement programme.

The outcome, CSIR Energy Centre head Dr Tobias Bischof-Niemz reports, is a “least-cost” energy-mix that is not only more than ZAR80-billion-a-year cheaper than the base case, but also produces 130 million tons less carbon dioxide emissions and consumes 29 billion litres less water yearly.

Engineering News, 23 February 2017

South Africa: Finance Minister highlights renewables programme impact

On Wednesday, Finance Minister Pravin Gordhan delivered his yearly budget speech from Parliament, in Cape Town, whereby he also gave a summary of the South African economic growth.

Among the notable contributors to the growth, Gordhan indicated that renewable energy resources have boosted investment in the short term.

In response to the confirmation by the Minister of Finance that the continuation of government’s independent power producer programme is an imperative, the South African Renewable Energy Council (SAREC), expressed satisfaction to the news.

ESI Africa, 23 February 2017

Continued support for renewables IPPs an economic boost – SAREC

The South African Renewable Energy Council (SAREC) has welcomed the confirmation by Finance Minister Pravin Gordhan that the continuation of South Africa’s independent power producer (IPP) programme was imperative, given the need to boost investment in the short term.

In a statement following Gordhan’s 2017 Budget speech on Wednesday, SAREC said both President Jacob Zuma and Gordhan “have now confirmed that Eskom must conclude the outstanding power purchase agreements (PPAs)” with IPPs, which it is currently refusing to sign.

SAREC said the delay in signing PPAs for the fourth bid round had caused an extended delay to the renewables programme, preventing the entry of ZAR58 billion into the economy and stalling the creation of over 13 000 construction jobs.

Engineering News, 22 February 2017

The above reflects a summary of certain news articles published during the preceding week.