Category Archives: DoE

Engineering study dispels myths on limits to renewable energy in the South African grid

Engineering News, Chris Yelland, 16 September, 2017.

A serious engineering study and report has dispelled the myths and propaganda peddled by fired former Eskom CEO Brian Molefe and suspended Eskom acting CEO Matshela Koko on the limits and costs of accommodating significant levels of variable renewable energy capacity in the South African power grid.

Note: To ensure strict technical accuracy, significant parts of the text below, particularly the results detailed, are taken directly from wording in the report.

Click here to download the full report

The study and associated report was prepared for the South African Department of Energy (DoE) and Eskom, and commissioned and funded by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) under the DoE’s South African – German Energy Programme (SAGEN).

The study was conducted by international engineering consultants Dr.-Ing. Markus Pöller and Marko Obert, of Moeller & Poeller Engineering GmbH (MPE), and was published in South Africa in September 2017.

The study report is entitled Assessing the impact of increasing shares of variable generation on system operations in South Africa – a flexibility study”.

Here is the full article.

New study points to 90% renewables mix being least cost by 2050

Engineering News, Dr Tobias Bischof-Niemz, 15 September, 2017.

ew analysis conducted using updated cost assumptions for solar photovoltaic (PV), onshore wind and batteries shows that the share of renewable energy in an electricity mix that would also be the least cost for South Africacould grow to above 90% by 2050.

Such a portfolio, the study indicates, will be 30% cheaper than the generation mix currently outlined in the Draft Integrated Resource Plan (IRP) Base Case, published by the Department of Energy (DoE) in November 2016.

The analysis represents an update of the least-cost mix presented in March by the Council for Scientific and Industrial Research (CSIR) in response to the DoE’s call for public comment on the IRP Base Case.

In the March response document, the science council argued that the least-cost mix to meet a projected 2050 demand of 522 TWh would comprise more than 70% renewables, with the balance of the energy arising from coalgas and hydro. Such a mix was calculated to be R75-billion a year cheaper than the one proposed in the Base Case and included no nuclear, which made up 28% in the Base Case.

(Ed. note: What will prevail in our energy decisions – corruption and vested interests, or common sense?).

Here is the full article.

EDITORIAL: Kubayi turns off energy future

BusinessDay, 7 September, 2017.

(Ed.note: The next capture, or misinformed, or something else is going on? Eskom’s obstruction HAS GOT TO BE STOPPED!!!)

SA’s world-feted renewable energy independent power producer programme, which attracted investments of R201bn in five years, looks like it is over as we knew it.

The programme was run as a competitive bid process, and over the four bid windows prices for renewable energy dropped dramatically, with wind power falling 55% and solar photovoltaic 76%. For bidders, which included the world’s big energy firms, the attraction lay in the certainty and comfort of investing in an environment in which there was a clear line of sight of the risks and the returns.

Bloomberg ranked SA in the top 10 destinations for renewable energy investment.

That all changed for good on Friday when Energy Minister Mmamoloko Kubayi kicked bid windows 3.5 and 4 – which have been in limbo for the past two years – even further into the future. While these bids will be signed by the end of October, they will not be commissioned until 2021.

An additional round of bids — known as the expedited round, which included the best projects from previous rounds that had not been selected – has been put off indefinitely.

More damaging than the delay was the fact that the minister slapped a price ceiling of 77c/kWh on bid windows 3.5 and 4. In doing so, she undermined the integrity of the competitive bidding process, which had already determined the power purchase price for each project, and hung a large question mark over any further bid rounds that might be held.

The investment certainty that had been the hallmark of the programme evaporated in an instant.

Investors will now be assessing what to do. Half of the wind projects in round 4 were below 77c/kWh, so these bids are still possible. For the solar photovoltaic projects a delay is not such a bad thing as they will get the advantage of hardware prices that are trending downwards.

So, while many of the projects could still go ahead, firms will think hard about participating in the future.

For makers of wind towers and solar panels, the situation is less easy to salvage. By putting off future rounds that had been envisaged just two years back, the outlook for manufacturers is bleak. Several have closed shop in SA during the impasse and more will follow.

Eskom’s argument against signing the outstanding power purchase agreements with successful renewable energy producers has been that it has an oversupply of energy. As economic growth has slowed and people and industry have migrated from the grid, demand has shrunk and excess supply has grown.

With its mountain of debt, Eskom needs to sell more electricity if it is to find some stability and sustainability. This is particularly so as new assets are completed and come on stream. But these dynamics have made it impossible.

Eskom has succeeded in stalling the independent power producer programme, but it will be unable to halt the energy revolution that is leading to the death of conventional power utilities all over the world.

Without the government programme, producers are still able to form direct supply relationships with customers, such as mines and big industry. Increasingly, they are doing so.

The cities also want to buy renewable energy directly from producers, reducing their reliance on Eskom and finding sources of energy that are cleaner and cheaper than coal. The City of Cape Town is in the lead and has taken the energy minister to court to compel her to provide it with the permission to do so.

No amount of anticompetitive or errant behaviour on the part of Eskom will be able to stop this movement.

The problem is not, and has never been, the independent power producers; the problem is Eskom.

Here is the sad and scary article

No end in sight to Eskom delays in signing renewable energy PPAs

Chris Yelland, EE Publishers, 4 August, 2017.

There appears to be no end in sight for resolution of the impasse caused by Eskom’s refusal to sign any new power purchase agreements (PPAs) with renewable energy independent power producers (IPPs) in terms of the Department of Energy’s (DoE’s) internationally acclaimed Renewable Energy IPP Procurement (REIPPP) programme.

In an interview with EE Publishers’ investigative editor Chris Yelland on 4 August 2017, Energy Minister Mmamoloko Kubayi would not give any specific timeline for the signing of 37 duly procured renewable energy supply contracts from IPPs, which have now been delayed for over two years.

“We have recently expanded the DoE, DPE and Eskom task team investigating the matter to include the DG of the National Treasury. So there’s been a lot of work done. But a big issue is Eskom’s balance sheet”, said Minister Kubayi.

“Treasury issues guarantees to Eskom, and Eskom is concerned that if they are required to sign PPAs for REIPPP bid window 3.5, 4 and 5 projects, it will further impact negatively on their balance sheet. This is why we had to include Treasury to have a look at the impact to ensure we do not get another downgrade. We are waiting for the task team to come back to us.”

Following President Zuma’s instruction in his state-of-the-nation address on 9 February 2017 for Eskom to sign the outstanding PPAs with IPPs, Minister Kubayi’s predecessor, Tina Joemat-Pettersson set a date of 11 April 2017 to sign the PPAs.

However, following her appointment on 31 March 2017, new Energy Minster Kubayi postponed the signing in order to enable further consultation with Department of Public Enterprises (DPE) Minister Lynne Brown and Eskom, and a DoE, DPE and Eskom task team was established to chart the way forward and report back by the first week of June 2017.

The subsequent further addition of the National Treasury to the task team has now delayed resolution of the matter still further, with no end in sight…

(Ed. note: Perhaps we have to wait for yet another Treasury Minister? Pravin, come back!)

Update on the proposed SA nuclear new-build programme

Chris Yelland, EE Publishers, 10 August, 2017.

During a wide-ranging interview with Energy Minister Mmamoloko Kubayi on Friday 4 August 2017, EE Publishers investigative editor Chris Yelland took the opportunity to get an update from her on the state of the proposed nuclear new-build programme in South Africa.

It was all on track

This time last year, the procurement process for the proposed 9,6 GW of nuclear new-build in South Africa appeared to be well on track, and was indeed forging ahead. Brian Molefe, the hero, was firmly in control at Eskom, and had recently returned as a committed nuclear evangelist from a nuclear power induction programme for utility executives at MIT in the USA. Matshela Koko was head of generation at Eskom, and held similar pro-nuclear views.

Molefe put out an unsubstantiated and unlikely position statement that Eskom would soon be cash-flush, and could handle the proposed nuclear new-build on the strength of its own balance sheet, without the need for any financial support or guarantees from government and the Treasury.

The incumbent energy minister at the time, Tina Joemat-Pettersson appeared more than eager to rid herself and government of the burdensome nuclear hot potato, and happily dumped the responsibility to procure, build, own and operate the new-build onto Eskom, just as Molefe and Koko had asked.

Perhaps Molefe and Koko’s nuclear commitment was not entirely based on sound economic, financial and planning principles, nor in the best interests of South Africa and Eskom. Perhaps there were other nefarious agendas at play.

Whatever, Eskom seized the opportunity, and sprang into action, commencing the nuclear procurement process, and preparing to issue the long-awaited formal request for proposals (RFP) to the Russian, Chinese, South Korean, American and French nuclear vendors before the end of 2016…

Here is the full article.