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G R E E N<br />
<strong>Economy</strong><br />
journal<br />
ISSUE <strong>59</strong> | 2023<br />
THE NEXUS<br />
of people and planet<br />
16<br />
GRID<br />
EVs IN<br />
SOUTH AFRICA<br />
38<br />
CIRCULAR<br />
CAPACITY<br />
RESTRAINTS<br />
46<br />
ECONOMY
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PUBLISHER’S NOTE<br />
Dear Reader,<br />
Our fortunes in the economy, generally, and in the renewable<br />
energy sector specifically, wax and wane with loadshedding, albeit in a<br />
converse relationship. We find ourselves back to maximum demand for<br />
energy solutions as the frequency of loadshedding surges, while our<br />
customers toil angrily in the dark or with the smell of diesel fumes in<br />
their nostrils, and their financials in a mess.<br />
Diesel is the story of the day as Eskom burns away R12.4-billion in<br />
diesel (according to Business Maverick). The Diesel Syndicate, key among<br />
the organised crime syndicates operating within the energy sector and<br />
feeding off Eskom, is clearing flourishing.<br />
Battery energy storage is emerging as the principal solution for<br />
Eskom and for industry, with solar PV a much-needed addition to try<br />
and square the economics, but not everyone has the roof or ground<br />
space, and not everyone has sufficient line capacity, the two most<br />
common constraints to rolling our a critical mass solar PV solution to<br />
match loads. And so, due to the cost of batteries, systems are expensive<br />
relative to utility savings, but thankfully still very attractive when diesel<br />
cost is factored in.<br />
At the current pace of energy project roll-out, just about every major<br />
energy customer in the country will have some sort of alternative<br />
energy solution in place within the next five years.<br />
Eskom and the municipalities should be hard at work revising<br />
their business models and finding ways to get involved and find new<br />
revenue streams that add value to an inevitably and rapidly changing<br />
energy landscape.<br />
Yours,<br />
Publisher<br />
EDITOR’S NOTE<br />
In an unprecedented move and under the umbrella of BUSA, CEOs of<br />
South Africa’s largest companies from all sectors are coming together in a<br />
coordinated and committed way. Their commitment is to work together<br />
urgently to address our nations key challenges: energy, transport and<br />
logistics as well as crime and corruption (page 8).<br />
As South Africa ramps up its roll-out of renewable energy, it is now<br />
confronting the same challenge faced by countries across the globe.<br />
Depleted grid capacity in resource-rich areas is making it increasingly<br />
difficult to connect new renewable energy projects to the grid,<br />
particularly in the Northern, Eastern and Western Cape (page 38).<br />
Driving a meaningful new energy vehicle (NEV) transition in South<br />
Africa will require a careful balance of incentivising a sustained shift in<br />
domestic market demand to NEVs; establishing an appropriately aligned,<br />
renewable energy-based charging infrastructure and supporting a shift<br />
in vehicle production (page 12).<br />
Unless ambitious public policy action is taken, electric vehicles (EVs)<br />
will remain the privilege of the few for the foreseeable future. A dual<br />
strategy is necessary. It involves promoting the purchase of entry-level<br />
EVs in the passenger car market while simultaneously fostering their<br />
introduction in public transport (page 16).<br />
Private participation in infrastructure and PPPs help bridge financing<br />
gaps while delivering sustainable infrastructure in developing economies<br />
— stimulating economic recovery. But how can PPPs be the “right tool”<br />
to support sustainable and resilient infrastructure development? Find<br />
out on page 32.<br />
Enjoy this issue!<br />
Alexis Knipe<br />
Editor<br />
G R E E N<br />
<strong>Economy</strong><br />
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G R E E N<br />
<strong>Economy</strong><br />
journal<br />
CONTENTS<br />
4 NEWS AND SNIPPETS<br />
ECONOMY<br />
8 South African government and organised business establish<br />
partnership initiative<br />
MOBILITY<br />
12 South Africa’s New Energy Vehicle Roadmap<br />
16 Towards an inclusive rollout of EVs in SA<br />
18 Understanding the African two-wheeler market<br />
22 Get ready for graphite shortages as electric vehicles boom<br />
INFRASTRUCTURE<br />
26 The city/state infrastructure nexus<br />
32 PPPs: the right tool for green and resilient infrastructure<br />
34 Making a meaningful impact: ACTOM<br />
ENERGY<br />
36 Ecological transition has its own ecosystem<br />
38 Grid capacity restraints jeopardise renewable energy projects<br />
41 Avoid getting burnt<br />
42 Solid foundations for SA’s growth in renewable energy<br />
CIRCULARITY<br />
44 Waste management: an economic-critical pillar to a greening<br />
economy. By Interwaste<br />
46 Circular economy: the systemic glue to the Nexus<br />
50 Plastics SA celebrates the 27 th International Coastal<br />
Clean-Up Day<br />
WATER<br />
52 South Africa’s water update<br />
ENERGY<br />
54 The push for renewable energy industrialisation<br />
READ REPORT<br />
THOUGHT [ECO]NOMY<br />
greeneconomy/report recycle<br />
key takeouts<br />
of the report<br />
12<br />
46<br />
54<br />
To access the full report in our Thought [ECO]nomy report boxes:<br />
Click on the READ REPORT wording or image in the box and you will<br />
gain access to the original report. Turn to the page numbers (example<br />
below) for key takeouts of the report.<br />
01 02 03<br />
key takeouts<br />
of the report<br />
key takeouts<br />
of the report<br />
2 3
NEWS & SNIPPETS<br />
ENERGY ACTION PROGRESS<br />
President Ramaphosa recently announced that government<br />
has made significant progress in several areas of generating<br />
new energy, such as building new generation capacity and<br />
transforming the industry through regulatory reforms.<br />
The president said that by stabilising Eskom’s power stations’<br />
performance and reducing demand during the winter, a worstcase<br />
scenario was averted, despite ongoing loadshedding.<br />
According to the president, Eskom has unlocked almost 400MW<br />
from companies with spare capacity of power added to the grid<br />
and the government is in the process of adding another 600MW.<br />
“We are fast-tracking the procurement of new generation<br />
capacity from renewables, gas and battery storage. Later this year<br />
the first three projects from the emergency power programme<br />
are expected to connect to the grid,” he stated.<br />
The president said it is encouraging to see more municipalities<br />
allowing their customers to feed surplus electricity into the grid<br />
when they have excess power, which will encourage businesses<br />
to invest in alternative energy.<br />
CROSS-BORDER PROCUREMENT<br />
NERSA says it agrees with the draft ministerial determination to<br />
procure 1 000MW of new generation capacity from the cross-border<br />
procurement agreement.<br />
“New generation capacity must be procured or purchased to contribute<br />
towards energy security and accordingly, up to 1 000MW should be procured<br />
from the SADC region from a range of technologies/sources,” NERSA said.<br />
“The range of energy producers from the region will either be utilities from<br />
the host countries or independent power producers that are legally operating<br />
within the host countries.”<br />
The energy capacity shall be procured by Eskom Holdings SOC Ltd and shall<br />
entail the procurement of electricity through one or more processes that are<br />
fair, equitable, transparent and cost-effective, and the form of which shall be<br />
determined by Eskom; and the conclusion of Power Purchase Agreements in<br />
respect of the electricity, for which the duration will be agreed upon between<br />
Eskom and the energy producers from the region.<br />
SAnews.gov.za<br />
EASING THE IMPACT OF LOADSHEDDING<br />
Trade, Industry and Competition Minister Ebrahim Patel has<br />
launched the Energy One Stop Shop and Energy Resilience<br />
Fund. This is part of the Energy Mitigation Strategy through<br />
the National Energy Crisis Committee.<br />
The Energy One Stop Shop was developed to address a key<br />
constraint that energy developers face, namely that the many<br />
regulatory and other measures that need to be complied with, can<br />
and do slow down approval of energy supply projects.<br />
“While the presidency is exploring ways to simplify these<br />
processes, we have seen that having a dedicated resource available<br />
to the private sector, to address blockages, has worked in other<br />
parts of the economy.”<br />
Patel said government is committed to fostering a resilient<br />
business environment and accelerating private-sector investment<br />
in electricity generation to secure a stable energy future.<br />
To contribute towards easing the impacts of loadshedding, the<br />
dtic, Industrial Development Corporation (IDC) and the National<br />
Empowerment Fund (NEF) have established a blended funding<br />
facility, the Energy Resilience Funds. These will support any<br />
business adversely affected by the energy crisis across all sectors<br />
of the economy.<br />
SA’s DEDICATED GREEN HYDROGEN FUND<br />
A Heads of Agreement has been concluded with<br />
the intention to launch a “SA-H2 Fund” (SA-H2).<br />
SA-H2 is an innovative blended finance fund,<br />
that will facilitate the development of a green<br />
hydrogen sector and circular economy in South<br />
Africa. The Fund is supported by Climate Fund<br />
Managers and Invest International B.V. (II) of the<br />
Netherlands, Sanlam Limited, the Development Bank<br />
of Southern Africa and the Industrial Development Corporation of<br />
South Africa (IDC), in collaboration with other strategic partners.<br />
The SA-H2 Fund initiative will aim to secure US$1-billion in funding,<br />
to be raised directly in South Africa or indirectly via other channels.<br />
Its focus will be to fast-track the mobilisation of funding towards<br />
the development and construction of large-scale green hydrogen<br />
infrastructure assets across South Africa.<br />
How SA-H2 will work<br />
“Succeeding in a just transition to cleaner energy rests on our ability<br />
to create a viable marketplace that attracts and mobilises public and<br />
private capital, and this fund will do just that. We will create and use<br />
innovative blended finance architecture and structuring to build a<br />
substantial pipeline of green hydrogen projects in South Africa. This<br />
will give private sector developers access to risk capital from an early<br />
stage of development, throughout construction and into operations,”<br />
says Catherine Koffman, group executive: project preparation, DBSA.<br />
UNLOCKING SA’s PROSPERITY<br />
The African Continental Free Trade Area (AfCFTA) holds the power<br />
to unleash an economic revolution – ushering in unparalleled<br />
progress and prosperity like never before. For South Africa<br />
and for most of the continent, a key aspect for reaping the full<br />
benefits of AfCFTA and securing a brighter future lies in moving<br />
quickly to ensure a stable energy supply.<br />
AfCFTA, phase 1, is seeing incremental implementation despite<br />
some key unresolved negotiations on rules of origin and tariff<br />
schedules, has the potential to become an unparalleled titan of<br />
free trade agreements. It seeks to gradually eliminate tariffs on<br />
90% of goods and reduce trade barriers. The UN Conference of<br />
Trade and Development estimates that the agreement could<br />
boost intra-African trade by about 33% and cut the continent’s<br />
trade deficit by 51%.<br />
To truly unlock the benefits of AfCFTA, the whole continent<br />
must make a comprehensive energy strategy top priority. Solving<br />
the energy crisis cannot be achieved in isolation; it requires<br />
collaboration between governments, private sector entities and<br />
international partners.<br />
It is heartening to note that the Presidential Climate Commission<br />
has unequivocally underscored the urgency of securing a sustainable<br />
NEWS & SNIPPETS<br />
“Further, this fund is a significant addition to national efforts to<br />
leverage our existing renewable energy infrastructure. With a national<br />
target of US$250-billion investment in green hydrogen by 2050,<br />
this sector is projected to amplify the development impact of the<br />
renewable energy industry.”<br />
Key role for the Fund<br />
Joost Oorthuizen, CEO of Invest International: “SA-H2 is a showcase<br />
of how public, private, international and local parties can join forces<br />
to create a catalytic effect on the development of an exciting new<br />
sector. <strong>Green</strong> hydrogen projects in South Africa can contribute to<br />
local sustainable development and support the energy transition<br />
locally as well as in export markets. While deploying its funds, Invest<br />
International makes efforts to demonstrate strong environmental and<br />
social commitment, strive for local impact and inclusive growth, and<br />
combine the expertise of Dutch and South African businesses.”<br />
Re-industrialisation in South Africa<br />
Joanne Bate, COO, IDC says: “The development of this new industry<br />
will support the longer-term energy security priority and the just<br />
energy transition contribution will proactively address socioeconomic<br />
development. South Africa will position itself as a<br />
globally competitive player in this industry. More importantly, green<br />
hydrogen will enable the local decarbonisation of hard-to-abate<br />
industrial sectors.”<br />
energy supply. It has stated that energy planning should consider<br />
climate change mitigation due to the magnitude of climate risk.<br />
The commission also emphasised that electricity planning should<br />
be based on least-cost pathways. All reviewed models demonstrated<br />
that the least cost energy model would involve investments in variable<br />
renewable energy (wind and solar), storage (batteries and pumped<br />
hydro) and peaking support.<br />
Government must urgently expand renewable energy production<br />
and upgrade the grid infrastructure. To attract private investment,<br />
policy frameworks must be streamlined.<br />
We must prioritise developing the capacity of the energy<br />
sector. By nurturing a skilled workforce, we can accelerate project<br />
implementation. Effective partnerships with educational institutions<br />
and industry stakeholders are crucial to address the skills gap.<br />
The effective implementation of AfCFTA will streamline trade<br />
regulations, customs procedures and remove barriers. Through<br />
regional cooperation and market integration, it can enable economies<br />
of scale, attracting investors to tap into Africa’s expanding energy<br />
demand. This could fuel more energy sector investments, establishing<br />
Africa as an energy secure region and an industrial powerhouse.<br />
By Wrenelle Stander, CEO of Wesgro<br />
GRID CAPACITY ALLOCATION RULES<br />
SAWEA has noted the court’s ruling to dismiss the urgent interdict in relation to the interim grid capacity allocation rules (IGCAR).<br />
The ruling will enable the industry to deliver much needed new generation capacity, as the state utility is able to grant the required<br />
budget quotes in line with the IGCAR.<br />
The process to allocate grid access impacts projects differently, however, as it currently stand the IGCAR will allow the urgent deployment<br />
of new generation. As such, and in line with the ruling, SAWEA has reaffirmed its commitment to working with all key stakeholders to<br />
accelerate the connection of shovel-ready projects with a view to alleviating the energy crisis.<br />
SAWEA encourages progressive industry discussions with the System Operator regarding the optimisation of the grid including<br />
the allocation of grid capacity, in line with the industry’s objective to develop a favourable regulatory environment for the rollout<br />
of renewable energy. As an association advocating for the advancement of the wind energy sector, SAWEA continues constructive<br />
engagement with all key stakeholders, including the presidency, NECOM, and Eskom to find solutions that support the construction or<br />
expansion of utility scale wind projects to help solve the country’s energy crisis.<br />
4 5
NEWS & SNIPPETS<br />
REVIEW OF WORLD ENERGY<br />
The Energy Institute and partners KPMG and Kearney recently<br />
released the 72nd annual edition of the Statistical Review of<br />
World Energy*. Global energy data themes for 2022, include:<br />
Primary energy<br />
• Primary energy demand growth slowed in 2022, increasing 1.1%,<br />
compared to 5.5% in 2021, and taking it to around 3% above the<br />
2019 pre-Covid level.<br />
• Renewables’ share of primary energy consumption reached 7.5%,<br />
an increase of nearly 1% over the previous year.<br />
Carbon emissions<br />
• Carbon dioxide emissions from energy use, industrial processes,<br />
flaring and methane (in carbon dioxide equivalent terms)<br />
continued to rise to a new high growing 0.8% in 2022 to<br />
39.3GtCO2e, with emissions from energy use rising 0.9% to<br />
34.4GtCO2.<br />
• In contrast, carbon dioxide emissions from flaring decreased<br />
by 3.8% and emissions from methane and industrial processes<br />
decreased by 0.2%.<br />
Renewables<br />
• Renewable power rose 14% in 2022 to reach 40.9EJ. This was<br />
slightly below the previous year’s growth rate of 16%.<br />
• Solar and wind capacity continued to grow rapidly in 2022<br />
recording a record increase of 266GW. Solar accounted for 72%<br />
(192GW) of the capacity additions.<br />
Electricity<br />
• Global electricity generation increased by 2.3% in 2022 which was<br />
lower than the previous year’s growth rate of 6.2%.<br />
• Wind and solar reached a record high of 12% share of power<br />
generation with solar recording 25% and wind power 13.5%<br />
growth in output.<br />
• Coal remained the dominant fuel for power generation in 2022,<br />
with a stable share around 35.4%.<br />
• Natural gas-fired power generation remained stable in 2022 with a<br />
share of around 23%.<br />
• Renewables (excluding hydro) met 84% of net electricity demand<br />
growth in 2022.<br />
SCATEC ACCELERATES GROWTH<br />
Release by Scatec signed an agreement to raise USD102-million<br />
in funding from Climate Fund Managers to further accelerate<br />
its growth ambitions. Release was established by Scatec ASA<br />
in 2019 to offer a flexible leasing solution of pre-assembled<br />
and modular solar and battery equipment for the mining and<br />
utilities market.<br />
The company invested in Release via its Climate Investor<br />
One fund; a blended finance vehicle focused on renewable<br />
energy infrastructure in emerging markets. CFM will contribute<br />
USD55-million in equity for a 32% stake in Release. Scatec will<br />
retain the majority shareholding of 68%. CFM will also provide<br />
shareholder loans totalling USD47-million, part of which will be<br />
on concessional terms.<br />
Release is experiencing good traction in the market,<br />
particularly towards African utilities. It has projects in operation<br />
and under construction in Cameroon, South Africa, Mexico and<br />
South Sudan with a total capacity of 47MW solar PV and 20MWh<br />
of battery storage and has additional contracts for 35MW solar<br />
PV and 20MWh of storage in Chad, in addition to maturing its<br />
advanced pipeline.<br />
Release will replicate its rapid deployment model to address<br />
shortfalls in local grid power supplies throughout the region.<br />
“The new shareholder funding will be supplemented by Release<br />
through additional debt and guarantee facilities that are currently<br />
in advanced negotiations. This gives us the financial foundation we<br />
need to meet the strong demand for our flexible leasing model, for<br />
easily deployable renewable power plants,” says Release CEO, Hans<br />
Olav Kvalvaag.<br />
Release will be accounted for as a joint venture investment in the<br />
group accounts of Scatec, which will generate an accounting gain<br />
of approximately USD40-million in the consolidated financials at<br />
closing. Closing of the transaction is expected in the third quarter<br />
of 2023, subject to customary conditions precedent.<br />
LICENCE TO OPERATE<br />
National Energy Regulator of South Africa (NERSA) has<br />
approved that the National Transmission Company of South<br />
Africa Limited (NTC) be issued with a licence to operate a<br />
transmission system within South Africa.<br />
“The NTC is envisioned to be an independent transmission<br />
system operator incorporating, inter alia, the currently nonlicensable<br />
but integrated functions of network provision, system<br />
operation and planning.<br />
“The NTC’s independence is an important signal to all<br />
stakeholders, including investors that they will have nondiscriminatory<br />
access to the transmission system,” NERSA said.<br />
Furthermore, the NTC is responsible for ensuring grid<br />
stability, to which end, it is allowed to buy and sell power, but<br />
not for profit. The NTC is a wholly owned subsidiary of Eskom,<br />
which was established as per government objectives and will<br />
perform the following key integrated roles to ensure the integrity<br />
of the interconnected power system:<br />
• Transmission Network Service Provider<br />
• System Operator<br />
• Transmission System Planner<br />
• Grid Code Secretariat<br />
NEWS & SNIPPETS<br />
COMMUNICATION TECH AND SUSTAINABLE GRIDS<br />
A white paper released by Huawei and IDC has underlined how significant communication<br />
technologies will be in building the sustainable, carbon neutral energy grids of the future.<br />
The white paper, titled “On Electric Power Communication All-<br />
Optical Network, Accelerating Digital Transformation of Electric<br />
Power”, was released at the Huawei Sub-Saharan Africa Electric<br />
Power Summit, which formed part of Enlit Africa 2023. It outlines<br />
how the power communication network is the basis for automatic<br />
power grid dispatching, market-oriented network operations and<br />
modernised management. Such a network is an important means<br />
to ensure stable and economical operations of the power grid as<br />
well as the core infrastructure of the power system.<br />
“Digital technologies are vital to leading the transition to a<br />
more sustainable energy sector,” said Victor Guo, president of<br />
Huawei Sub-Saharan Africa Enterprise Business Group. Using<br />
the expertise it has gained from more than three decades in the<br />
communication sector, he added that Huawei is ideally placed to<br />
“pave a digital way to a global energy transition.”<br />
Edwin Diender, chief innovation officer, global electric power<br />
digitalisation business unit, Huawei Technologies concurred.<br />
“Energy transition and digital technology combined are able to<br />
drive us towards carbon neutrality,” he said. “We want to leverage<br />
our experience in the worldwide web of communications into a<br />
worldwide web of energy.”<br />
According to Diender, achieving that will require a mindset<br />
shift from many players in the energy sector. “Where having a<br />
smart grid is often the end-stage for the energy industry and<br />
electric power companies, we see much more potential,” he said.<br />
“With such aspiration, the information of the power grid becomes<br />
more significant, more meaningful. And this digital journey will<br />
lead to more sustainable future power systems.”<br />
“We’re looking at capabilities from our past and seeing how<br />
they can be applied to the energy sector,” he added.<br />
Energy transition<br />
and digital technology<br />
combined are able<br />
to drive us towards<br />
carbon neutrality.<br />
Huawei releases the white paper at Enlit 2023.<br />
As Wenchen Wang, solution manager of transmission and access,<br />
pointed out, the organisation is ideally positioned to do so.<br />
“Huawei makes full use of its technological prowess to<br />
continuously explore the electric power industry,” she said.<br />
“Together with the upstream and downstream of the industry<br />
chain, it has provided secure, stable, and reliable all-optical<br />
communication network solutions for countries and regions such<br />
as China, Thailand, Brazil, the UAE and Austria, accelerating the<br />
digital transformation of the electric power industry and reshaping<br />
industry productivity.”<br />
Diender added that utilities need to embrace that digital<br />
transformation is an ongoing journey that can’t be achieved as a<br />
one-off project or by adopting specific technologies. That journey<br />
starts with digitisation (the switching from analogue to digital<br />
meters), moves on to digitalisation (building a network of smart<br />
meters), and ultimately results in full digital transmission (which<br />
might look like having full digital twins of every meter on the grid).<br />
As Diender noted, a lot of existing communications technology<br />
can be repurposed to ensure a more sustainable, carbon<br />
neutral grid. “Parts of this journey have not been taken yet, but<br />
a lot of work has already been done,” he said. “There’s a lot of<br />
communication technology already within the energy industry.”<br />
Taking this approach, he said, could also open new revenue<br />
streams for utilities. They could, for example, use the technological<br />
backbone needed for digital transformation to become fibre to<br />
the home (FTTH) provider in partnership with internet service<br />
providers. There is also potential from a data perspective.<br />
But for that technology to be used effectively and sustainably,<br />
partnerships will be crucial. “Alone you can go very fast, but<br />
together you can go much further,” he concluded.<br />
*The Statistical Review of World Energy has been published by bp since 1952. It was announced in<br />
February that it would pass to the Energy Institute, KPMG and Kearney.<br />
Edwin Diender, Chief Innovation Officer, Global Electric<br />
Power Digitalisation Business Unit, Huawei Technologies.<br />
Victor Guo, President of Huawei Sub-Saharan Africa Enterprise<br />
Business Group.<br />
6 7
ECONOMY<br />
ECONOMY<br />
South African<br />
GOVERNMENT<br />
and<br />
ORGANISED BUSINESS establish<br />
PARTNERSHIP INITIATIVE<br />
At a meeting held in June 2023, the South African Government and organised business agreed to<br />
to form a partnership, with appropriate engagement and oversight structures, to actively work<br />
towards removing obstacles to inclusive economic growth and job creation.<br />
Success will lead to a<br />
significant impact on GDP<br />
growth and job creation.<br />
in a coordinated and committed way. Their commitment is<br />
to work together urgently to address key challenges and<br />
ensure the country achieves its potential of inclusive<br />
growth and job creation.<br />
Said Adrian Gore, BUSA’s vice president, “South Africa<br />
has significant unrealised potential and this partnership<br />
agreement underscores business’ belief in our country and<br />
is a firm commitment to achieving sustainable and inclusive<br />
economic growth. Business, working together with all partners, is<br />
ideally positioned to ensure a better future, by turning the flywheel<br />
for the benefit of all.”<br />
Minister Ntshavheni said, “In line with our commitment to mobilise<br />
the resources and capabilities of social partners to enable collective<br />
action to address the challenges facing our country, government<br />
welcomes the support of business in three priority focus areas –<br />
energy, transport and logistics as well as crime and corruption. This<br />
will enable joint action, alongside other social partners, on these<br />
critical challenges to set our country on a path to recovery.”<br />
B4SA has made significant progress in establishing the three priority<br />
workstreams to work closely with government in implementing the<br />
urgent necessary actions.<br />
Martin Kingston, chair of the B4SA steering committee, commented,<br />
“B4SA’s three priority workstreams are fully mobilised and, through<br />
joint collaboration and strategic partnerships with government, are<br />
focused on articulating and delivering a critical path to recovery,<br />
building societal and business confidence, as well as supporting<br />
government to deliver on these interventions. We are expecting to<br />
make considerable progress in the short term to realise collective<br />
benefits and set us on a sustainable path which capitalises on the<br />
country’s significant potential.”<br />
Considerable progress has been made in the following areas:<br />
• Energy. Advance collaboration, through the National Energy<br />
Crisis Committee (NECOM), to end loadshedding and achieve energy<br />
security. This will be done by supporting a drive to close the current<br />
energy capacity gap and build confidence in restoring energy security.<br />
Additionally, business has agreed to further capacitate NECOM to<br />
develop a confidence building national communication plan that<br />
is credible and transparent, supported by business and with visible<br />
and demonstrable actions.<br />
• Transport and logistics. Stabilise and improve operational<br />
performance on key trade corridors, mobilising private sector<br />
resources and accelerating implementation of the National Rail<br />
Policy to close the capacity gap. Work is underway to immediately<br />
align and integrate business’ efforts into government’s Freight<br />
Logistics Roadmap, and developing work plans, deliverables and<br />
timelines while also integrating the private sector into the recently<br />
formed National Logistics Crisis Committee (NLCC).<br />
• Crime and corruption. Government is reasserting the primacy of<br />
the rule of law and is in the process of strengthening the Investigating<br />
Directorate (ID) in the NPA and implementing intelligence, policing<br />
and other reforms in response to the recommendations of the State<br />
Capture Commission of Inquiry into State Capture. Business will<br />
provide support on a carefully governed arms-length basis. The Joint<br />
Initiative to Fight Crime and Corruption (JICC) has been established<br />
as the delivery mechanism to implement related interventions.<br />
The workstream priorities will be continuously reassessed and<br />
reprioritised and, in the future, additional focus areas, such as water<br />
and infrastructure, may be brought into scope.<br />
Business and government will explore ways to advance cooperation<br />
on the jobs agenda and identify what areas of collaboration or<br />
existing programmes can be significantly scaled in the short term.<br />
Cas Coovadia, BUSA’s CEO, concluded, “Business is ideally positioned<br />
to ensure a better future for the benefit of all, which makes this<br />
partnership agreement with government critically important.<br />
South African business leaders are committing to contributing<br />
considerable skills and resources and, as a matter of urgency, work<br />
through all relevant partnership structures to address our country’s<br />
priorities. Ultimately, success will lead to a significant impact on<br />
GDP growth and job creation and will re-instill confidence amongst<br />
all stakeholders”.<br />
The shortlist of CEOs who will be leading business’ participation<br />
in the workstreams includes Fleetwood Grobler, Nolitha Fakude,<br />
Mxolisi Mgojo, Andrew Kirby, Jannie Durand, Neal Froneman and<br />
Paul Hanratty. Other leaders will be added to the list over time.<br />
Various government departments, relevant state-owned<br />
enterprises and other appropriate structures will collaborate<br />
on clearly-defined initiatives with organised business,<br />
represented by numerous CEOs under the oversight of Business<br />
for South Africa (B4SA), the implementation platform for Business<br />
Unity South Africa (BUSA).<br />
This initiative builds on the success of prior collaborations such<br />
as the Covid-19 response, where government and business worked<br />
together to implement a nationwide vaccine rollout.<br />
President Ramaphosa said, “This initiative will make a real and<br />
marked difference in rebuilding our economy and setting it on a path<br />
of sustained inclusive growth. It is driven by a shared determination<br />
to overcome the severe challenges we currently face and to mobilise<br />
the country’s substantial capabilities towards the achievement of that<br />
goal. We welcome this commitment from business and undertake<br />
as government to work to ensure the success of this partnership.”<br />
In an unprecedented move and under the umbrella of BUSA, CEOs of<br />
South Africa’s largest companies from all sectors are coming together<br />
8 9
uYilo eMobility Innovation Cluster Programme<br />
The uYilo eMobility Innovation Cluster Programme (uYilo) is a<br />
multi-stakeholder initiative established by TIA to facilitate an<br />
enabling environment that would support the increased uptake<br />
of electric mobility vehicles. In its ten years since inception the<br />
programmes has continued to create technology solutions and<br />
deploy innovative business models, support a human capital skills<br />
base to support innovation as well as commercial activities and<br />
commercialise battery electric vehicle technologies, products<br />
and services.<br />
uYilo is at the Nelson Mandela University in Gqeberha; the<br />
Programme’s activities include government lobbying, industry<br />
engagement, pilot projects, capacity development, enterprise<br />
development and thought leadership.<br />
uYilo’s facilities and expertise comprise of national accredited<br />
battery testing, materials testing, electric vehicle systems and a<br />
smart grid ecosystem that serves as a live testing environment for<br />
inter-operability of the various system components of the smart<br />
grid.<br />
TIA SUPPORTING<br />
INNOVATIONS FOR A<br />
SUSTAINABLE INCLUSIVE<br />
ENERGY TRANSITION<br />
South Africa is a country with abundant fossil fuel resources<br />
that currently make up a big part of the energy sector and<br />
the economy. However, these carbon intensive resources<br />
pose a significant risk to human health, the environment<br />
and the country’s competitiveness. South Africa is also<br />
particularly vulnerable to the negative impacts of climate<br />
change, witnessed recently in the devastating floods that<br />
affected Kwa-Zulu Natal, while other parts of the country<br />
experienced drought.<br />
South Africa faces considerable climate and energy-related<br />
risks. These include shortages of electricity supply, underinvestment<br />
in the electricity system, as well as physical,<br />
social, and transition risks. Embracing new economic<br />
opportunities in green technologies can drive industrial<br />
development, innovation, and economic diversification,<br />
This would lead to a sustainable and economically resilient<br />
future, characterised by decent work, social inclusion, and<br />
lower levels of poverty.<br />
In considering the implications of a transition to a lowcarbon<br />
economy and a climate resilient society, the<br />
concept of a just transition takes centre stage. Just Energy<br />
Transition (JET) is about moving towards a lower carbon,<br />
greener future while enabling the creation of new job<br />
opportunities for those displaced by the replacement of<br />
coal by cleaner technologies. This is premised on easing<br />
the burden decarbonisation could pose to those who<br />
depend on high-carbon industries.<br />
President Cyril Ramaphosa has said of the JET: “For<br />
transitions to be just, vulnerable workers and communities<br />
need to be included in designing solutions. These same<br />
constituencies must share the benefits and not just the<br />
risks of transitions.”<br />
By Supporting and funding innovations in alternative,<br />
cleaner and greener energy innovations, the Technology<br />
Innovation Agency (TIA), an entity of the Department of<br />
Science and Innovation (DSI) is committed to supporting<br />
the development of technological innovations that will<br />
assist the country to transition to a low carbon future,<br />
including mitigation and adaptation strategies that will<br />
improve climate resilience resulting in a competitive and<br />
sustainable economy. These will contribute significantly to<br />
our government’s energy objectives and goals.<br />
The mandate of TIA is to promote the development and<br />
exploitation of discoveries, inventions, innovations, and<br />
improvements in the public interest. TIA provides financial<br />
and non-financial support for innovations in various<br />
sectors of the economy including, the bioeconomy (health,<br />
agriculture, industrial biotechnology, and indigenous<br />
knowledge systems), advanced manufacturing, energy,<br />
ICT, and natural resources (mining, water, and waste<br />
management). Through supporting innovation and the<br />
development of local intellectual property, South Africa<br />
can transform from a resource-based economy to a<br />
knowledge economy.<br />
TIA has a critical role to fulfil as an Industry Builder. Industry<br />
Builders focus on transforming an economy by supporting<br />
the development of new sectors or technologies. An<br />
important factor in this is bridging the innovation chasm<br />
between research and commercialisation. In bridging<br />
the innovation chasm, TIA is an active funder, connector,<br />
facilitator, and enabler in the National System of<br />
Innovation (NSI) and industry. TIA is pursuing opportunities<br />
to position itself as the leader in the innovation discourse<br />
around the JET and climate resilience. The agency seeks<br />
to form partnerships with like-minded organisations and<br />
individuals to collaborate in addressing the challenge of<br />
climate change.<br />
Through funding and support instruments of the agency,<br />
TIA has invested in various innovations that will respond<br />
to the country’s energy challenges and would contribute<br />
to the transition to more sustainable and safer energy<br />
technologies. These locally developed technologies<br />
include innovations funded through the Energy focus area<br />
and the Global Cleantech Innovation Programme (GCIP).<br />
The Programme’s uYilo KickStart Fund continues to support<br />
products and service development by providing much needed<br />
funding for applied R&D. To date, about R11,5 million of funding<br />
has been provided through this Fund.<br />
Woodies – Lignocellulosic biomass<br />
The Woodies innovation developed by <strong>Green</strong> Movement Energy<br />
won best Youth Led Team at the GCIP Awards. Woodies is<br />
a lignocellulosic-based biomass made from organic waste.<br />
Woodies are designed to serve as a low-carbon and highthermal<br />
alternative to A- and B-graded coal. Woodies offer a<br />
cost-effective renewable energy solution that meets the needs<br />
of communities. Through a unique combination of organic waste<br />
materials, Woodies have been designed to provide high thermal<br />
heat with low emissions, combust cleaner than competing solid<br />
fuels and contain no hazardous substances.<br />
The Decadal Plan recognises the need for energy security in<br />
the long and short term, meeting the energy needs of growing<br />
industries, decarbonising and transitioning to a net zero<br />
carbon economy, and achieving a just energy transition. As<br />
an implementing agent, TIA stands ready to deliver on critical<br />
interventions necessary to support the state in its quest for a<br />
sustainable and inclusive economy.<br />
science & innovation<br />
Department:<br />
Science and Innovation<br />
REPUBLIC OF SOUTH AFRICA<br />
MISER-HTS Hydraulic Hybrid Transmission Project<br />
The MISER Hydraulic Hybrid Transmission (HTS) is an innovative<br />
energy efficient recovery system aimed at saving fuel for vehicles,<br />
particularly heavy-duty vehicles. The system was developed by<br />
Ducere Holdings (Pty) Ltd, a company specialising in the efficient<br />
use of energy by developing energy recovery and deployment<br />
technologies within the automotive industry.<br />
The MISER is a new, hydraulic, efficient and automated transmission<br />
that achieves fuel savings and reduces emissions by optimising<br />
engine performance and regenerative braking. The ability of the<br />
MISER transmission to be both a series and a parallel system gives<br />
it unique capabilities to optimise both the performance and fuel<br />
consumption of the vehicle. Initial simulation results show up to<br />
70% fuel saving in city and highway driving.
MOBILITY<br />
South Africa’s<br />
NEW ENERGY VEHICLE<br />
Driving a meaningful NEV transition in South Africa will require a balance of incentivising a<br />
sustained shift in domestic market demand to NEVs; establishing an appropriately aligned,<br />
renewable energy-based charging infrastructure and supporting a shift in vehicle production.<br />
BY NAAMSA, THE AUTOMOTIVE BUSINESS COUNCIL*<br />
ROADMAP<br />
Existing research shows charging needs will vary substantially<br />
by country and region, housing stock, average distance travelled,<br />
population density and NEV mix. For example, home charging is<br />
currently the most important option in most countries and will remain<br />
a critical option where demographics support it. Other countries<br />
and regions, however, may have lower potential for home charging,<br />
increasing the importance of workplace and public charging.<br />
South Africa will have different demands for DC fast charging mainly<br />
due to its energy challenges, socio-economic demographics and other<br />
local-specific factors. Achieving the right charging infrastructure<br />
mix will require a massive and coordinated investment between the<br />
public and private sectors.<br />
Consumer acceptance and adoption. While South Africa may elect<br />
a gradual phased-in approach after prioritising a manufacturing-led<br />
strategy to NEV evolution, government incentives will undoubtedly<br />
be essential to stimulate demand and encourage consumers to<br />
replace their internal combustion engine (ICE) vehicles with NEV<br />
models. Due to the higher levels of inequality in our society, high<br />
unemployment rate and poverty, the complete replacement of<br />
the existing fleets of vehicles in South Africa will take decades,<br />
if not longer (a minimum of 15 to 20 years plus). To accelerate this,<br />
especially as new, more expensive technologies scale and mature;<br />
incentives will be necessary to offset the additional cost at least<br />
partly to the consumer. Otherwise, if consumers are forced to keep<br />
their older vehicles longer than they should, the net effect of NEV<br />
introduction will be negative.<br />
While the auto sector has made significant progress driving down<br />
battery and fuel cell costs, further research and development (R&D)<br />
investments will be needed to realise cost, utility and convenience<br />
parity between NEVs and their ICE counterparts. NEVs currently<br />
cost significantly more to produce than equivalent gasoline cars or<br />
trucks. This divide grows when considering convenience and utility<br />
MOBILITY<br />
Over 300 new mines for graphite,<br />
lithium, nickel and cobalt will need to be<br />
built over the next decade to meet NEV and<br />
energy storage battery demands.<br />
parity, which requires larger batteries to support longer NEV ranges<br />
commensurate with consumer expectations and needs.<br />
R&D. To increase NEV market share, the focus should not be simply<br />
on strengthening fuel-efficiency and other regulations. These must<br />
be complemented by additional government policies that facilitate<br />
the transition to a NEV future, including support for critical R&D.<br />
Globally, automakers have already committed $255-billion to NEV<br />
R&D activities in 2023.<br />
To increase NEV penetration and provide NEV owners the same<br />
cost benefits as those provided by ICE, governments must continue<br />
to work proactively with industry to identify and support critical<br />
R&D opportunities to enhance our localisation ambitions and secure<br />
stable access to critical components and supply chains for local<br />
component manufacturing.<br />
Mineral extraction and supply chain. Sub-Saharan and southern<br />
Africa are endowed with enormous and rich mineral resources we<br />
need in the production of lithium battery technology. If we want to<br />
make South Africa attractive to global and local battery assemblers,<br />
we need to include a beneficiation strategy in our mix so that we<br />
do not just extract but rather develop our own mega factories that<br />
would supply products to the world. Our region is ready, and we<br />
have the following mineral resources around us:<br />
- Nickel | South Africa [the 9th largest global producer] and some<br />
in Zimbabwe<br />
The world is on the cusp of achieving a remarkable milestone<br />
of 20-million NEVs on the road, up from just one-million in<br />
2016. To illustrate the pace of this transition, sales of NEVs<br />
(including fully electric and plug-in hybrids) doubled in 2021 to<br />
a new record of 6.6-million.<br />
Despite global supply chain challenges, sales kept rising into 2022,<br />
with two-million NEVs sold worldwide in the first quarter, up by 75%<br />
from the same period a year earlier. The number of NEVs on the<br />
world’s roads by the end of 2021 was about 16.5-million, triple the<br />
amount in 2018. Notwithstanding this tremendous progress, NEVs<br />
still represent only a fraction of the more than 1.4-billion vehicles<br />
on the road globally. Likewise, the increasing pace of NEV sales are<br />
not the same in every country around the world.<br />
To maximise NEV acceptance and adoption, policymakers and<br />
industry investments must focus on improving vehicle affordability,<br />
increasing consumer awareness and confidence, developing vital<br />
charging and refueling infrastructure as well as building resilient<br />
supply chains to support the manufacture of NEVs.<br />
Electrical charging and hydrogen fuelling infrastructure. All<br />
stakeholders must work together on public policy efforts, such<br />
as incentives, grants, rebates and other mechanisms, along with<br />
private investment, to spur significant electric charging and hydrogen<br />
refueling infrastructure development to support three key areas:<br />
homes (especially multi-unit dwellings and areas with higher<br />
residential densities), workplaces, highways and other public<br />
locations, with an emphasis on those lacking public transport.<br />
THOUGHT [ECO]NOMY<br />
GREEN TRANSPORT STRATEGY FOR SOUTH AFRICA (2018–2050) | The Department<br />
of Transport | [2018]<br />
READ REPORT<br />
greeneconomy/report recycle<br />
Our transport sector accounts for 10.8% of the country’s GHG emissions. There are also indirect emissions<br />
from the production, refining and transportation of fuels. Continued growth within the sector will have<br />
an increasing impact on land resources, water and air quality as well as biodiversity.<br />
The Department of Transport has developed a <strong>Green</strong> Transport Strategy for South Africa, which aims to<br />
minimise the adverse impacts of transport, while addressing current and future transport demands. Effective<br />
implementation and sufficient funding are the sector’s main challenges. Long-term investment is essential<br />
for the success of the green transport strategy.<br />
The strategy seeks to address the negative environmental impacts of the transport sector in South Africa,<br />
by providing a distinct route of environmental policy directives and resilient climate change initiatives for<br />
the sector that include joint ventures with other spheres of government and the private sector.<br />
READ REPORT<br />
THOUGHT [ECO]NOMY<br />
GLOBAL ROADMAP OF ACTION | Toward Sustainable Mobility | Sustainable Mobility<br />
for All | [2019]<br />
How can countries and cities attain their SDG targets and improve the sustainability of their transport<br />
sector? How can they prioritise action based on their performances on mobility and accelerate<br />
progress? These questions are at the heart of Global Roadmap of Action.<br />
The report proposes a coherent menu of policy actions to reach the SDGs and achieve the four policy<br />
goals that define sustainable mobility (universal access, efficiency, safety and green transport). It embodies<br />
the collective knowledge of 55 organisations, 180 experts and more than 50 decision-makers including<br />
transport ministers, city mayors, public transport operators and 25 corporations.<br />
12<br />
13
MOBILITY<br />
MOBILITY<br />
- Manganese | South Africa [70% of the world’s manganese<br />
reserves], some in DRC and Gabon<br />
- Cobalt | DRC [>60% of world supply, 85% is exported to China]<br />
and some from Zambia<br />
- Lithium | Zimbabwe [5th largest producing country], some in<br />
South Africa and in Namibia<br />
- Graphite | Mozambique [20-40%: global reserves], some in<br />
Tanzania, Zimbabwe, Madagascar<br />
- Copper | South Africa, the DRC, Namibia, Zambia and Zimbabwe<br />
Realising wide-scale adoption of EVs will require a substantial increase<br />
in the identification and responsible extraction of resources critical<br />
to the battery supply chain, as well as battery end-of-life policies<br />
that minimise environmental harm and support robust supply chains<br />
for battery materials.<br />
Demand for NEV batteries will increase from what we have today<br />
to over 9 300GWh by 2030. This will apply tremendous pressure on<br />
existing supply chains for critical minerals, components and materials.<br />
For example, some estimates suggest that global demand for lithium<br />
from battery factories could hit three-million tons by 2030, requiring<br />
a massive increase over the 82 000 tons produced in 2020.<br />
Benchmark Minerals Intelligence estimates that over 300 new<br />
mines for graphite, lithium, nickel and cobalt will need to be built<br />
over the next decade to meet NEV and energy storage battery<br />
demands. As a result of rising demand and tight supply chains, prices<br />
of raw materials such as cobalt, lithium and nickel will continue to<br />
surge. In May 2022, lithium prices were over seven times higher<br />
than at the start of 2021.<br />
Fuel cell. In addition to battery and plug-in EVs, hydrogen fuel<br />
cell electric vehicles represent an important technology on the<br />
path to decarbonising road transportation. This is particularly<br />
important for heavy-duty vehicles, where battery technology may<br />
present challenges related to weight, cost, charging and range.<br />
For fuel cell electric vehicles [FCEVs], hydrogen should be priced<br />
at affordable levels and hydrogen fuels made more conveniently<br />
available to users. Accordingly, government support measures are<br />
needed in the areas of fuel cell and hydrogen storage R&D as well<br />
as hydrogen production and station infrastructure development.<br />
Grid reliability/Decarbonising. South Africa has major energy<br />
supply and security challenges. Realising the full potential of NEVs<br />
and their charging infrastructure will require careful evaluation of<br />
upgrades to the electricity grid infrastructure, as well as the transition<br />
to clean and renewable sources of energy. A critical factor in the<br />
wide-scale adoption of NEVs is ensuring the grid infrastructure<br />
is reliable, resilient, affordable and able to accommodate various<br />
charging needs (not limited only to light-duty vehicles).<br />
THOUGHT [ECO]NOMY<br />
We must work collaboratively to understand how widespread<br />
adoption of NEVs will increase demand on existing infrastructure<br />
and plan for the necessary investments required to maintain<br />
grid upgrades and reliability. Further, realising the benefits of<br />
electric and fuel cell vehicles makes decarbonising the electric<br />
grid increasingly important. To truly achieve the bold ambition of<br />
carbon neutrality, especially decarbonisation of road transport,<br />
the power used to charge EVs will need to come from clean and<br />
renewable sources, while also maintaining the reliability necessary<br />
to meet demand.<br />
South Africa is betting big on so-called green hydrogen to both grow<br />
and decarbonise hard-to-abate sectors of the economy. Hydrogen is<br />
the lightest and most abundant element in the universe. It can serve<br />
as an alternative, emissions-free transport fuel when used to power<br />
fuel cells. Hydrogen is considered green when it is produced using<br />
renewable electricity to split water into hydrogen and oxygen using<br />
electrolysers. Fuel cells work by combining hydrogen and oxygen in<br />
an electrochemical process that generates electricity, with the only<br />
by-product being water.<br />
A critical factor in the wide-scale<br />
adoption of NEVs is ensuring the grid<br />
infrastructure is reliable.<br />
While this prototype offers a glimpse into a low-emissions<br />
future for mobility, having this technology widely adopted for<br />
passenger vehicle use in South Africa requires a level of investment<br />
in renewable energy generation, as well as hydrogen production,<br />
storage, transportation and refueling sites that just do not exist<br />
at present.<br />
FCEVs are also only recently emerging from the shadows of<br />
their more well-known counterparts: EVs and variants thereof.<br />
While perhaps the most desirable option, especially as petrol<br />
prices skyrocket, South Africans have limited options in this regard.<br />
The lack of local supply is particularly striking in the entry- and<br />
mid-level market segments, with most available models competing<br />
in the high-end to niche segments. Moreover, the majority of<br />
South Africa’s energy generation is powered by the carbon-intensive<br />
process of burning. Carbon emissions come from two major industries,<br />
of which energy production accounts for 34% of the emissions<br />
and manufacturing accounts for 24%.<br />
South Africa’s rapid adaption is critical for the domestic<br />
automotive industry’s long-term success and growth. The only way<br />
THE URBAN MOBILITY SCORECARD TOOL | Benchmarking the Transition to<br />
Sustainable Urban Mobility | Briefing paper | World Economic Forum | Global New Mobility<br />
Coalition | [May 2023]<br />
to have a successful automotive manufacturing base is to keep up<br />
with technological developments. The South African automotive<br />
industry cannot be running on one development technology track<br />
while the rest of the world is way ahead on the same track. Developed<br />
economies have a saturated vehicle demand and a replacement cycle<br />
that is heading towards BEVs.<br />
The transition towards newer automotive technologies, such as<br />
NEVs, needs to be seamless because South Africa cannot afford<br />
to operate on two parallel technology tracks, manufacturing both<br />
old and new types of vehicles because it is already struggling to<br />
attain economies of scale. Our country needs to be on a progressive<br />
NEVs currently cost significantly<br />
more to produce than equivalent<br />
gasoline cars or trucks.<br />
path by manufacturing new technology vehicles which has a huge<br />
growth potential, rather than being on a path which is stagnant<br />
with older generation technology whose market is declining.<br />
The South African and the broader regional market is non-dynamic,<br />
with only limited projected growth over the next decade. The growth<br />
in NEV sales in South Africa will therefore displace ICE sales, as opposed<br />
to generating additional aggregate sales in the market. South Africa<br />
needs to be able to compete for production contracts to supply markets<br />
that require new energy vehicle technology automotive manufacturers<br />
will need to be at the forefront of these new technologies to capitalise<br />
on the huge growth opportunities which exist.<br />
READ REPORT<br />
greeneconomy/report recycle<br />
By 2050, almost 70% of people will live in urban areas, with towns and cities expected to grow by<br />
2.5-billion people over that period. In an increasingly urbanised world, delivering healthy and vibrant<br />
cities is vital for both people and planet. When it comes to achieving this vision for cities of the future,<br />
there is perhaps no sector more important than mobility. Transport is the lifeblood of cities. As cities grow<br />
and evolve, so must our transport systems.<br />
Electrification needs to be accelerated in sync with a powerful push towards more connected public<br />
transport, improved infrastructure, priority for cycling and walking and integration of emerging mobility<br />
solutions such as shared mobility to create a suite of options to meet the wide-ranging needs of people<br />
moving about cities. It is only with a combination of these solutions that we can cut emissions to address<br />
the urgent climate emergency, reduce traffic on the road to make our streets safer, all while transporting a<br />
growing urban population.<br />
No one city or one company can achieve this vision alone. Through strong public-private collaboration,<br />
we can find innovative, impactful and context-sensitive solutions for mobility to enable a sustainable<br />
future for cities. The Urban Mobility Scorecard Tool is testament to the power of public-private collaboration<br />
and is a resource that can help cities benchmark and accelerate progress on urban mobility.<br />
READ REPORT<br />
This article is an excerpt from SOUTH AFRICA’s NEW ENERGY VEHICLE ROADMAP THOUGHT LEADERSHIP DISCUSSION DOCUMENT | The<br />
Route to the White Paper | The National Association of Automobile Manufacturers of South Africa (Naamsa) | [February 2023]<br />
THOUGHT [ECO]NOMY<br />
greeneconomy/report recycle<br />
INVESTMENT AND FINANCE OPPORTUNITIES IN THE SOUTH AFRICAN<br />
TRANSPORT SECTOR | A FOCUS ON LOW-CARBON TECHNOLOGIES | Climate and<br />
sustainable investment | National Business Initiative | Just Share | WWF | The Lewis<br />
Foundation | [October 2022]<br />
Despite over a decade of work on low-carbon transport by several parties in South Africa, the sector is<br />
only now beginning to receive serious attention. This report focuses primarily on providing assessments<br />
of technology risk for the transport sector transition and aims to support financial institutions’ risk<br />
evaluation methodologies with overviews of technology options and associated ESG risks in the<br />
transport sector.<br />
14 15
MOBILITY<br />
of EVs in SA<br />
Towards an<br />
INCLUSIVE ROLLOUT<br />
Unless ambitious public policy action is taken, EVs will remain the privilege of the few for the<br />
foreseeable future. A dual strategy is necessary. It involves promoting the purchase of entrylevel<br />
EVs in the passenger car market while simultaneously fostering their introduction in<br />
public transport.<br />
BY GAYLOR MONTMASSON-CLAIR*<br />
To minimise financial implications and keep up with global trends,<br />
strict conditions would be required. Most importantly, support should<br />
lapse in 2030 for soft hybrids and 2035 for all other EVs.<br />
The availability of entry-level EVs on the local market is a fundamental<br />
precondition for the incentive to be effective. To this end, the tariff<br />
anomaly, which sees battery electric vehicles originating from the<br />
EU fetching a 25% tariff (against 18% for all other vehicles) should<br />
be resolved.<br />
Second, it requires fostering the introduction of EVs in public transport.<br />
Close to three-quarter of South Africans relied on public transport as<br />
their main means of commuting in 2019. Of commuters that use public<br />
transport for their mobility, 66% used minibus taxis and 12% buses.<br />
So far, knowledge in deploying electric public transport vehicles is<br />
limited. Cape Town is the only municipality to have experimented<br />
with e-buses, with little success. The buses proved unsuitable for the<br />
city’s geography and the tender process was marred by allegations<br />
of irregularities.<br />
Electric minibus taxis is another route worth taking. No experience<br />
for these exists, though a pilot is planned for Stellenbosch. The<br />
rollout of electric minibus taxis should be supported through a<br />
temporary, enhanced Taxi Recapitalisation Programme scrapping<br />
allowance for the purchase of EVs.<br />
In addition, reducing the cost of finance for e-minibus taxis would<br />
further support the transition. Minibus taxis are considered high risk<br />
and face high interest rates when financed. Preferential financing<br />
terms of EVs could be achieved through government-guaranteed<br />
loans or the provision of concessional debt. This is also proposed for<br />
passenger vehicles.<br />
For bus fleets, the rollout of EVs would essentially flow through<br />
public procurement programmes, such as bus rapid transport<br />
systems. Here, the public nature of the bus systems would allow<br />
TAXI RECAPITALISATION PROGRAMME<br />
The Taxi Recapitalisation Programme is an intervention by<br />
government to bring about safe, effective, reliable, affordable<br />
and accessible taxi operations by introducing new taxi<br />
vehicles designed to undertake public transport functions<br />
in the taxi industry.<br />
MOBILITY<br />
PAY AS YOU SAVE®<br />
Pay As You Save® or PAYS is a proven financing approach that<br />
has been used in multiple countries to facilitate investment<br />
into a range of climate smart solutions. PAYS is now being<br />
used to reduce the upfront capital costs of transitioning from<br />
internal combustion engines to electric vehicles, starting with<br />
public transport.<br />
for a great degree of experimentation with innovative mechanisms<br />
and models. This could involve grants as well as innovative financial<br />
arrangements and business models, like Pay As You Save®, battery<br />
leasing or bus sharing.<br />
Complementary measures could also be introduced. These include<br />
adequate charging infrastructure, differentiated electricity tariffs<br />
(to encourage off-peak charging), preferential access/parking<br />
or discounted licenses. Besides being critical for South Africa’s<br />
industrial development, stimulating the local manufacturing of all<br />
types of EVs could also result in lower-cost vehicles in the long run.<br />
More broadly, the “electric revolution” can make transportation<br />
more environmentally sustainable. It also provides a unique<br />
opportunity to make it more socially inclusive.<br />
The cost of doing nothing would<br />
be disastrous for the sector.<br />
I<br />
have been working with partners to understand the implications<br />
of the global transition to e-mobility for South Africa. Our work<br />
also included the most appropriate interventions for the country<br />
to mitigate risks and maximise benefits. An exclusionary, elitist<br />
transition to e-mobility is one such risk. Yet, as explored in a recent<br />
Trade & Industrial Policy Strategies policy brief, an opportunity<br />
exists to shape the rollout more comprehensively in both private<br />
and public transport.<br />
First, the dual strategy would involve promoting the purchase of<br />
entry-level passenger electric vehicles (EVs).<br />
Many, from politicians and government officials to civil society<br />
activists and unionists, will object to this very idea. After all, why<br />
should the country support the sale of private vehicles? Merely a<br />
third of South African households own a car and only upper middleand<br />
high-income households would be able to afford an EV, even<br />
an entry-level model.<br />
The same argument would also be expressed as: can’t we just let the<br />
market transition on its own?<br />
The answer to this would be maybe, if South Africa did not have<br />
an automotive manufacturing industry or if vehicles produced<br />
domestically were all exported. But that’s not the case. South Africa<br />
has a well-developed automotive value chain, often heralded as the<br />
crown jewels of the country’s industrial policy. And the local industry<br />
is closely tied to both domestic and European dynamics.<br />
The local market matters. It accounts for two out of five passenger<br />
vehicles manufactured in South Africa. Moreover, about half the market<br />
for new vehicles consists of entry-level vehicles below R260 000. But<br />
EV sales are insignificant. There were only 6 367 of them on South<br />
African roads by the end of 2020. All EVs, including hybrid models,<br />
accounted for less than 0.2% of new car sales in 2020.<br />
Yet, a transition to producing more EVs is vital if South Africa<br />
wants to keep up with developments in Europe. About three out of<br />
five passenger vehicles manufactured in South Africa are exported,<br />
primarily to Europe (three-quarters of exports). Europe accounted (in<br />
value) for 60% of South African exports of automotive vehicles and<br />
components in 2020.<br />
And the European trajectory is clear: no internal combustion engine<br />
or hybrid sales by 2035 in most countries.<br />
The cost of doing nothing would be disastrous for the sector – and<br />
South Africa’s environment.<br />
SOME SOLUTIONS<br />
Electric vehicles are cheaper to own. But they’re more expensive to<br />
buy than their internal combustion engine counterparts. This is<br />
a problem given that the domestic market is very price sensitive,<br />
particularly in the entry-level segment. Temporary support for the full<br />
range of EVs is recommended to incentivise prospective buyers. The<br />
support would need to bridge the gap between them and internal<br />
combustion engine equivalents in the entry-level segment.<br />
Fostering EV sales domestically could be achieved through a direct,<br />
fixed-purchase subsidy and extremely low-interest loans, underpinned<br />
by development finance institutions for entry-level electric vehicles.<br />
* Article written Gaylor Montmasson-Clair, Senior Economist,<br />
Trade & Industrial Policy Strategies (TIPS), University of<br />
Johannesburg. This article is an excerpt from POLICY BRIEF |<br />
TOWARDS AN INCLUSIVE ROLLOUT OF ELECTRIC<br />
VEHICLES IN SOUTH AFRICA | TIPS | [February 2022]<br />
16 17
MOBILITY<br />
MOBILITY<br />
AFRICAN TWO-WHEELER MARKET<br />
Understanding the<br />
A context for micromobility<br />
AFRICAN ORIGINS<br />
In the 1960s, Kenya, Tanzania, Burundi, Rwanda and Uganda saw<br />
the birth of the Boda Boda, a modified bicycle to transport people<br />
to and from borders for commercial purposes. Designed to carry<br />
weights of over 250km 1 , these bicycles were and still are a modal<br />
choice for a fast journey over poor road infrastructure. The class A<br />
motorbike entered the East African market in the early 1980s after<br />
making headway in West Africa in the 1970s.<br />
The period between 1970 and 1980 saw rapid urbanisation and<br />
inadequate intracity mobility in both East and West Africa, which<br />
created a demand for readily available, cheap transportation means<br />
that could easily manoeuvre poor road infrastructure. An informal<br />
transportation market operated by the mostly unemployed boomed.<br />
In South Africa, the apartheid transport policies, systems and spatial<br />
planning saw sophisticated public transport in white urban areas while<br />
those living in the periphery depended on government-controlled<br />
buses and trains to commute.<br />
From 2000 to 2010, East and West Africa reported growth of up to<br />
40% 2 in their respective markets, further cementing the two-wheeler<br />
as a dominant mode of last mile commercial transport. Despite the<br />
challenges of regulation and policy inclusion, this mode continued to<br />
thrive, often referred to as the “necessary nuisance”.<br />
Technology such as SafeBoda 3 sought opportunity in driving<br />
innovation in this informal mode of transport. However, post the<br />
Covid-19 pandemic this platform had to pull operations in both<br />
Nigeria and Kenya sighting challenges with sustainability of its<br />
operating model in those economic environments.<br />
Market growth in southern Africa can be directly attributed to<br />
the emergence of last mile food delivery. Largely anchored on<br />
e-commerce platforms there is an undisputed dependency. As<br />
e-commerce grows in sub-Saharan Africa so does the two-wheeler<br />
market. The use of innovative platform technologies to manage, track<br />
and settle payments for operators are key characteristics. One can<br />
argue that while acceptance and adoption of the two-wheeler was<br />
slow over the past few decades perhaps the South African market’s<br />
growth will display a lot more sophistication and rapid growth of<br />
e-motorcycles compared to the rest of Africa.<br />
It is important to note that smaller more efficient modes of<br />
transport in the African context do not follow the traditional logic<br />
for transport planning. This is a known fact among transport<br />
practitioners in the continent. Informal mobility solutions often<br />
grow exponentially outside of the ambit of planning and regulation.<br />
Filling the gap for missed mobility needs, these solutions become<br />
a runaway train, where regulation chases.<br />
Africa’s triple challenges of poverty, inequality and unemployment have created a unique backdrop<br />
for the way people move themselves and their things. Although gaining traction as a plausible<br />
solution to high carbon emissions and congestions in cities, micromobility is not new in Africa.<br />
A white paper for the Rosebank e-Micromobility Pilot Project by<br />
CityConsolidator Africa and Mobility Centre for Africa | [April 2023]<br />
Mobility solutions across the African continent have been<br />
driven by purpose, the availability of infrastructure and<br />
the cost of acquisition and maintenance. It is no wonder<br />
that the most popular modes of mobility are those that are not<br />
only fit-for-purpose but also demonstrate unrivalled operational<br />
sustainability. This has little to no consideration of carbon emissions<br />
or the latest technology trends.<br />
Demand responsiveness, where there is poor road infrastructure<br />
and dense urban settings, requires mobility solutions that are<br />
characterised by easy manoeuvrability. Thus, two-wheeler usage and<br />
densities are higher in African countries with constrained transport<br />
infrastructure development in both rural and urban settings. The<br />
evident lack of organised and sophisticated transport systems,<br />
regulation and law enforcement has significantly lowered barriers<br />
to entry in this market across Africa.<br />
While South Africa has been lagging its counterparts, it is catching<br />
on very quickly. Its apartheid legacy spatial planning of urban and<br />
peri-urban (townships) contributed to very low adoption in the past<br />
few decades where there was assumed unsuitability of two-wheelers<br />
as a functional mode of transport for lower income groups. However,<br />
this has changed significantly in the past five years with the growth<br />
of the e-commerce market and need for faster last mile food delivery.<br />
Figure 1: Largest two-wheeler markets in Africa by AU Region.<br />
Figure 2: A timeline of mobility trends in African cities.<br />
1 Cushions or racks are added to the back of the bicycle to create room for passengers or balance heavy loads such as cement bags.<br />
2 Research for Community Access Partnership (2014) conducted a comparative study across the African continent.<br />
3 A Ugandan tech company launched its super e-hailing start-up in 2017 with expansion to Nigeria, Kenya, etc.<br />
18 19
MOBILITY<br />
MOBILITY<br />
Many solutions directed at African<br />
mobility fail before they take off.<br />
The African market is still dominated<br />
by combustion engines.<br />
AN ESTABLISHED MARKET<br />
Today with various conflicting reports, the market is an estimated<br />
USD3-billion and is expected to reach USD5-billion by 2027. These<br />
conflicting reports are due to a lack of concise data and informality<br />
in some of the largest markets within the continent. Nigeria is by<br />
far the largest market, in second place Egypt and surprisingly South<br />
Africa comes in at third place according to TechSci Research, 2022.<br />
The African market is still dominated by combustion engines<br />
produced by Japanese brands such as Yamaha, Suzuki and Honda,<br />
followed closely by Indian brands, TVS and Bajaj 4 . Chinese models<br />
have also gained some market share, although small.<br />
The African e-commerce boom coupled with louder environmental<br />
concerns has created ground for rising demand in energy-efficient<br />
two-wheelers. From electric bicycles to e-motorcycles and e-scooters,<br />
market significance is growing. New manufacturers have entered<br />
this very competitive market as the continent is making a steady<br />
transition from combustion engines. However, according to PREO 5 ,<br />
there are some major challenges:<br />
1. Over 90% of two-wheelers available in the market are Chinese<br />
brands which are not built for the African environment.<br />
2. Access to electricity is estimated at 48%, which makes it<br />
impossible to fully support a stable charging network.<br />
3. EVs are normally double the cost of combustion engines.<br />
IS AFRICA READY?<br />
With a population of 1.3-billion, 60% of which is under the age<br />
of 25, Africa is still growing. Rapid urbanisation is a catalyst for efficient<br />
and affordable modes of transport as a service. Straddling the formal<br />
4 TechSci Research, 2022<br />
5 Powering Renewable Energy Opportunities (PREO), 2022<br />
6 In 2007, Kenya introduced a waiver on both import tax and completely knocked down (CKD) parts for Boda Bodas.<br />
7 Starkey, 2016; McCamel & Mtanga, 2019 – a mass market was created between 2007 and 2010<br />
and informal economies, the African two-wheeler market is a critical<br />
fiscal contributor. Asset acquisition and running costs sit in the formal<br />
economy, with revenue generation in the informal economy. With<br />
many African countries battling the youth unemployment fiscal<br />
challenge, perhaps here lies the opportunity to create employment<br />
and drive innovation in this already thriving market.<br />
Affordability<br />
Access to financing has always been a challenge for informal<br />
mobility providers across the globe. Some African governments<br />
have become creative, using policy instruments, incentives and<br />
investment towards the establishment of manufacturing industries.<br />
The attractiveness of incentives has contributed to exponential<br />
growth of the market in some East African countries. While these<br />
incentives drive prices down, they also reduce barriers to entry<br />
significantly. Countries like Kenya have introduced tax waivers on<br />
production localisation 6 and import taxes. These initiatives are<br />
targeted at growing robust manufacturing activity compared to<br />
importing the fully assembled two-wheelers and have resulted in<br />
Kenya growing its fleet from a mere 100 000 in 2007 to over 700 000.<br />
The price point for an entry-level combustion engine Class A<br />
two-wheeler has decreased from USD2 000 in the 1990s to as little<br />
as USD420 7 , making it affordable for individual operators. Given<br />
the significant reduction in operational costs such as fuel, the<br />
energy- efficient two-wheeler should make for competitive pricing.<br />
Sustainability<br />
Creating an ecosystem that captures resources and capabilities<br />
of multiple players in the market is what creates sustainable and<br />
efficient transport systems. Energy-efficient mobility is no different.<br />
No single entity (private or government-led) will be able to provide<br />
a self-sustaining market entirely alone. While government’s primary<br />
pivot is creating favourable policy conditions, entrepreneurs should<br />
focus on building a thriving industry and making sizeable investments<br />
towards manufacturing, infrastructure and battery solutions. According<br />
to PREO, this sustainability ecosystem has three critical tenants:<br />
1. Efficient production of durable electric two-wheelers<br />
Many emerging start-ups in southern Africa are reliant on complete<br />
knock-down (CKD) or fully assembled unit imports. East Africa has<br />
a thriving manufacture and assembly market, in which Kenya leads<br />
with over 20 entities. Growing local manufacture ensures customisation<br />
so that two-wheelers are built for the rough African terrain.<br />
2. Reliable and dense charging infrastructure<br />
Off-grid energy solutions that are publicly available have not gained<br />
momentum in Africa. Southern Africa has made some headway in<br />
diesel generator grid power, which is a less viable option given the<br />
unsustainable carbon emissions. Solar home systems are unaffordable<br />
and only provide a small fraction of the energy required. On-site solar<br />
PV is the more sustainable solution for scaling battery charging and<br />
swapping infrastructure for two-wheelers. The absence of extensive<br />
investment in this sector is the challenge.<br />
3. High-quality batteries for low-volume African buyers<br />
Large-volume global players enjoy the benefit of accessing quality<br />
batteries from Europe, while Africa contends with this barrier. Lowquality<br />
batteries do not provide the reliable range and performance<br />
thus operators will always gravitate towards ICE models.<br />
CONTEXT MATTERS<br />
Transitioning from combustion to electric is more complex in the<br />
African context. Socio-economic factors require a unique approach<br />
TechSci (2022) African Two Wheeler Market. rep. TechSci Research LLC. (Accessed: May 2023)<br />
that is empathetic to current conditions and not driven by innovation.<br />
Reality vs the ideal<br />
While Africa battles its three most wicked challenges, pressure for<br />
the reduction of carbon emissions is becoming the fourth. Many<br />
solutions directed at African mobility fail before they take off,<br />
mainly because they do not consider the real needs of the people.<br />
Mobility solutions should be centred around people, thus should be<br />
fit-for-purpose. This is evident in how the two-wheeler or even the<br />
mini-bus taxi has become the backbone of most transport services<br />
in the African continent. Will an electric two-wheeler deliver the<br />
service a combustion engine provides in rural KwaZulu-Natal or<br />
the outskirts of Lagos? That’s but one of the questions transport<br />
planners should be asking.<br />
Inclusivity<br />
Transport planning in Africa is synonymous with exclusionary results<br />
that further drive inequality. While innovation and technology should<br />
enhance efficiencies of existing mobility as a service solution, creating<br />
an entirely new market with new operators is not only disastrous but<br />
dangerous as well. One only needs to look at recent history when<br />
Uber entered the African market.<br />
Adoption, or lack thereof, poor infrastructure, unsophisticated<br />
transport systems, informal markets with little to no regulation,<br />
spatial planning and urban densification, unreliable energy sources<br />
and scanty government funding are just some of the most wicked<br />
shortcomings of the African mobility context. An approach to<br />
solutions that are impactful should always be mindful of these. As<br />
Africa redefines and redesigns the way people move, perhaps the<br />
approach should be focused on creating efficiencies and innovation<br />
of what works for Africa.<br />
Addo-Ashong, T. (2023) Power of two wheelers in Africa, Motorcyclists Safety Workshop: Riding in a safe system. Motorcycling in the regions SSATP/World Bank, May. (Accessed: June 2021)<br />
Lowitt, S. (2020) Industrial development projects motorcycle components. Working paper. TIPS. (Accessed: May 2023)<br />
PREO (2022) Charging Ahead: accelerating e-mobility in Africa. rep. Powering Renewable Energy Opportunities<br />
20 21
MOBILITY<br />
Get ready for<br />
GRAPHITE SHORTAGES AS<br />
ELECTRIC VEHICLES BOOM<br />
have succeeded in synthesising graphite from abundant petroleum,<br />
and the resulting supply now makes up half of worldwide demand.<br />
These dynamics apply to nickel, cobalt and manganese, especially<br />
because they are largely interchangeable in combining with lithium<br />
to form cathodes. But no mineral works as well as graphite in anodes,<br />
whether with lithium-ion or the leading alternatives. So, graphite, even<br />
more than lithium, is hard to replace.<br />
Graphite seems a plentiful resource overall. But the rapid increase<br />
in demand just for EVs is likely to absorb all available demand by<br />
2030. Graphite suppliers won’t be able to keep up, even as they shift<br />
from steel makers to electric vehicle battery makers as their main<br />
customer (see figure 1).<br />
Kearney Analysis<br />
Graphite ore.<br />
MOBILITY<br />
Chargers for most<br />
EV batteries also rely<br />
heavily on graphite<br />
as a component.<br />
Globally automakers are embracing EVs, which means rapidly growing demand for raw materials<br />
in batteries. Supplies of graphite might seem plentiful, but heavy uptake for EVs creates a serious<br />
risk. Automakers and utilities need to work now to avoid unexpected shortages or price shocks.<br />
BY KEARNEY CONSULTING<br />
The US Geological Survey has classified five battery materials<br />
as vital elements due to the risk of supply disruptions from<br />
burgeoning demand. Three of these – lithium, nickel and cobalt –<br />
get most of the attention because they typically form the cathode<br />
that decides the capacity and power of the battery. A fourth mineral,<br />
manganese, helps to make up a secondary option for cathodes<br />
(lithium-manganese oxide), and can therefore be replaced if other<br />
elements are available; it also has 10 times the global production of<br />
the other minerals. (The other substantial raw materials in batteries<br />
are the commodities of aluminium, iron and phosphate with no<br />
likelihood of shortages.)<br />
Graphite, by contrast, is the most common base for the anode,<br />
far superior to current alternatives. It may be secondary, yet it is<br />
crucial for releasing electrons from the cathode to the external<br />
circuit. That’s because graphite is both stiff and highly conductive,<br />
and its layered chemical structure enables it to store electrical charges<br />
better than other materials. Nearly all anodes, whether for lithium-ion<br />
or the main alternative batteries, rely heavily on graphite. This is true<br />
for stationary batteries as well as storage in cars.<br />
Graphite is the largest single unit of batteries, and electric cars<br />
typically include 50 to 100 kilograms of the mineral. Graphite made<br />
up 2% of the battery cost in 2022 prices (28% for weight); the<br />
corresponding figures for lithium are 21% and 3%. Chargers for<br />
most electric vehicle (EV) batteries also rely heavily on graphite as a<br />
component. (Besides the cathode and anode, EV batteries consist of<br />
electrolyte and separators, neither of which involve scarce minerals.)<br />
Recent articles on EV supply worries have focused on lithium,<br />
nickel and cobalt, with little if any mention of graphite. After all,<br />
graphite seems plentiful, with a well-developed supply chain due<br />
22<br />
to longstanding demand, especially in steelmaking, electronics and<br />
electric power generation. Current graphite prices are roughly onetenth<br />
that of lithium.<br />
An analysis of expected demand by Benchmark Mineral Intelligence<br />
suggests that graphite has the largest future gap between supply<br />
and demand – even more than that of lithium, long seen as<br />
the bottleneck with prices that tripled last year. Graphite demand<br />
is likely to grow by a factor of eight by 2030 over 2020 levels<br />
(4.2 metric tons over a supply of 3.0) and 25 times by 2040. That<br />
translates into a predicted supply shortfall of 30% for graphite,<br />
compared to 11% for lithium (2.4 over 2.1), 26% for nickel (1.5 over 1.1)<br />
and 6% for cobalt (0.32 over 0.30). Note that battery makers need<br />
three times as much natural graphite to make one unit for graphite<br />
anodes, higher than for the other minerals.<br />
These are rough estimates, and the recent decline in lithium prices<br />
cautions us against straight-line extrapolation. Nevertheless, the<br />
gap serves as a warning to all consumers of graphite to plan for<br />
contingencies. By 2030, graphite supplies will likely not cover all<br />
demand. Industrial consumers will need to find alternative sources,<br />
expect shortages or pay higher prices. Semiconductor and other<br />
shortages in the recent Covid pandemic can serve as a vivid reminder of<br />
the disruption caused by difficulties in crucial supply chains.<br />
Why the squeeze is worse than it looks<br />
Commentators see little reason to worry about graphite supplies.<br />
After all, the current supply is plentiful, with many mines around the<br />
world, some operating below capacity. The owners of capital-intensive<br />
mines are unlikely to cut back production, and geologists have found<br />
accessible graphite deposits in much of the world. Metals producers<br />
Article courtesy of Kearney Consulting<br />
Figure 1. EV demand will absorb all graphite output at current rate.<br />
Meanwhile synthetic graphite comes with its own problems. It<br />
currently costs double the price of the natural, mined version,<br />
and refineries for synthesising graphite can take as long to set up<br />
as a graphite mine. And even if natural graphite doubled in price,<br />
synthesising the substance draws on fossil-fuel byproducts and<br />
generates far more pollutants than the natural version.<br />
While most EV batteries currently do rely on synthetic graphite, US<br />
EV makers are showing a preference for mined supplies – especially<br />
as processors have improved the resulting purity. High-purity natural<br />
graphite is also making headway into semiconductors and nuclear<br />
power generation. And if fossil-fuel refining does fall because of the<br />
shift to EVs and renewable energy sources, synthetic graphite ironically<br />
will become more expensive. As a result, natural graphite production<br />
is likely to outpace synthetic yields by 2030.<br />
As for those abundant graphite mines, the largest are in China,<br />
which produces three-quarters of the world’s annual supply of the<br />
natural version. Yet the Chinese government could decide to restrict<br />
sales to the West, even if the mine owners would like to keep selling.<br />
In a recent letter to shareholders, JP Morgan Chase CEO Jamie Dimon<br />
pointed out that “China, using subsidies and its economic muscle to<br />
dominate batteries, rare earths, semiconductors or EVs could eventually<br />
imperil national security by disrupting our access to these products<br />
and materials.”<br />
As for mines opening elsewhere, most of these are in Africa and<br />
Latin America where weak governments bring other problems. The<br />
US has no substantial deposits of natural graphite. It also takes a<br />
long time to start up a mine, so the supply is less responsive than<br />
executives may think.<br />
Complicating all of these analyses is that graphite comes in various<br />
forms according to the demands of customers. EV batteries, for<br />
example, use the spherical-coated form, while semiconductors<br />
need highly purified graphite. Some mines yield only one kind. But<br />
overall, the future is difficult for graphite customers that expect<br />
a largely unchanged supply and price for the commodity.<br />
Background: Graphene structure.<br />
How to prepare for the squeeze<br />
A few manufacturers are already starting to de-risk their graphite<br />
supplies, but there’s no easy solution. Let’s start with the basic question<br />
of preference: natural or synthetic. If, like most EV companies, you<br />
prefer natural, then you need to start with figure 2 (on next page),<br />
which shows the total reserves of deposits vs annual production of<br />
the major suppliers for 2021.<br />
Nearly all anodes, whether for<br />
lithium-ion or the main alternative<br />
batteries, rely heavily on graphite.<br />
23
MOBILITY<br />
Kearney Analysis<br />
Figure 2. China provides about three-quarters of the world’s supply of both natural and synthetic graphite.<br />
To de-risk graphite supplies, companies need to broaden their<br />
supply base. For EV firms that sole-source their graphite from China,<br />
the immediate priority is to look for alternatives. Many companies<br />
have been doing this since even before the pandemic. For 2017 to<br />
2020, all US firms (including non-EV) relied on China for only a third of<br />
their graphite supplies; the other main suppliers were Mexico (21%),<br />
Canada (17%) and India (9%).<br />
The most likely short-term sources are the mines opening in<br />
Mozambique, Madagascar and other African countries. These mines<br />
are looking for contracts, but procurement needs to factor in the<br />
frequent phases of political instability those countries have shown.<br />
In the medium to long term, customers can build relationships with<br />
suppliers in Turkey and Brazil. Existing mines there may already have<br />
locked up their production, but the two countries hold enormous<br />
reserves and are likely to expand production soon.<br />
As for supplies of synthetic graphite, the challenge here is the<br />
processing of those fossil-fuel by-products. US production is likely<br />
to fall due to strict environmental regulations and costs. Beyond<br />
the immediate sourcing, companies have a variety of options for<br />
reducing risk in graphite supplies:<br />
Long-term contracts. Tesla has extensive formal agreements with<br />
Syrah in Australia to buy graphite from mines in Mozambique. GM has<br />
a six-year agreement with Posco (a South Korean steel maker) to supply<br />
synthetic graphite.<br />
Demand reduction. BMW is pioneering technology to reduce the<br />
graphite content in batteries (silicon is the best alternative).<br />
Near-shoring. To reduce political risk, Tesla is evaluating mineral<br />
resources from Canada. Hyundai is likewise evaluating localisation to<br />
24<br />
To de-risk graphite supplies,<br />
companies need to broaden<br />
their supply base.<br />
ensure a stable supply. These are mid- to long-term approaches, not<br />
quite fixes. Building on these approaches, we recommend multiple<br />
initiatives across both the short and long term:<br />
Seek long-term contracts with a broad mix of suppliers. Longterm<br />
contracts will ensure a steady supply even if the market is<br />
squeezed tight and could work with either commodity aggregators<br />
or with mines/processors directly. The optimum mix includes two<br />
to three established suppliers and two to three recent entrants as<br />
challengers. Because these are commitments over several years,<br />
buyers will need to predict their own needs for graphite as well as<br />
assess the supplier’s plans for expansion. They should also segment<br />
suppliers based on their political risk profile and geography. Vertically<br />
integrated suppliers will need extra attention because some of their<br />
mines may be closing soon.<br />
Form strategic partnerships across the value chain. Some large<br />
buyers may want to go further and create formal partnerships with<br />
suppliers, especially at nodes with constraints. Outright acquisition<br />
and vertical integration have become popular options but bring risk<br />
as well from greater corporate complexity and lost flexibility in a<br />
volatile market.<br />
Reduce internal specifications and demand. Some battery<br />
makers have highly specific requirements for their graphite,<br />
both types and grades. Maybe they needed these specifications<br />
early, but now they should consider reducing these specifications<br />
to expand the potential suppliers. (Fewer specifications also helps<br />
to reduce internal complexity.) With recent advances in purification,<br />
they can also evaluate using both synthetic and natural graphite.<br />
Watch developments in graphite recycling. Researchers and<br />
start-ups have made breakthrough innovations in recycling used<br />
EV batteries, and graphite reuse may soon be practical. Large graphite<br />
customers should follow these developments and consider investing<br />
in feasible ideas to stay ahead of the curve.<br />
Monitor sub-tier risks. The graphite value chain is complex,<br />
and disruptions in flows to a primary supplier can upset ambitious<br />
plans for batteries. Those depending on a steady flow of graphite<br />
can work in advance to identify and mitigate risk in the supply base.<br />
The Covid pandemic showed how disruptions in semiconductors<br />
could hobble most of the automobile industry. If EV batteries, as<br />
expected, become crucial to the future of transportation, then carmakers<br />
will need to expand their risk management to graphite suppliers –<br />
from natural disasters and labour unrest to geopolitical instability.<br />
EV battery makers and their automaker customers, have long<br />
realised the potential for supply bottlenecks for crucial battery<br />
minerals. Yet graphite, because of its seemingly secondary role in<br />
batteries and its large existing supply base, has attracted less attention<br />
than its supply risks warrant. As EV production takes off in this decade,<br />
customers in related industries will discover unexpected shortages<br />
and price jumps. The time is now to reduce those risks with attention<br />
to internal needs and external developments.<br />
ESG | MINING<br />
WATER | ENERGY<br />
INFRASTRUCTURE
THOUGHT LEADERSHIP<br />
The City-State/<br />
Infrastructure<br />
Nexus<br />
SINGAPORE AS A CASE STUDY<br />
Singapore is generally considered to be the last remaining functional city-state in the world,<br />
with full sovereignty, international borders, its own currency, a robust military and substantial<br />
international influence in its own right. 1<br />
BY LLEWELLYN VAN WYK, B. ARCH; MSC (APPLIED), URBAN ANALYST<br />
The Republic of Singapore, as it is officially known, is an island country and<br />
city-state in Southeast Asia, bordering Malaysia to the north. The World Bank<br />
(2021) states Singapore’s population as 5.45-million people who live and<br />
work within 733.2 square kilometres making Singapore the third most densely<br />
populated country in the world after Monaco and ahead of Hong Kong. 2, 3 Despite<br />
this density there are numerous green and recreational spaces as a direct result<br />
of urban planning interventions. As such, Singapore is one of the greenest cities<br />
in the world, with parks and gardens occupying 47% of all land, compared to the<br />
14% of New York and the 29% of Rio de Janeiro. 4<br />
Llewellyn van Wyk.<br />
The Economist, 2015.<br />
Figure 1. Map of Singapore.<br />
The country’s territory comprises one main island, 63 satellite<br />
islands and islets, and one outlying islet; the combined area of these<br />
has increased by 25% since the country’s independence as a result of<br />
extensive land reclamation projects.<br />
It is a major aviation, financial and maritime shipping hub serving<br />
some of the busiest sea and air trade routes. Changi Airport is an<br />
aviation centre for Southeast Asia and hosts a network of over<br />
100 airlines connecting Singapore to some 300 cities in about<br />
70 countries and territories worldwide. It has been rated one of<br />
the best international airports by international travel magazines,<br />
THOUGHT LEADERSHIP<br />
including being rated as the world’s best airport for the first time<br />
in 2006 by Skytrax, and again in 2023. 5<br />
Singapore Changi Airport also had the second- and third-busiest<br />
international air routes in the world; the Jakarta-Singapore airport<br />
pair had 4.8-million passengers carried in 2018, while the Singapore-<br />
Kuala Lumpur airport pair had 4.5-million passengers carried in 2018,<br />
both trailing only behind Hong Kong-Taipei (6.5-million).<br />
The Port of Singapore, managed by operators PSA International<br />
and Jurong Port, was the world’s second-busiest port in 2019 in<br />
terms of shipping tonnage handled, at 2.85-billion gross tons (GT),<br />
and in terms of containerised traffic, at 37.2-million twenty-foot<br />
equivalent units (TEUs). 6 It is also the world’s second busiest, behind<br />
Shanghai, in terms of cargo tonnage with 626-million tons handled.<br />
In addition, the port is the world’s busiest for transshipment traffic<br />
and the biggest ship refuelling centre. 7<br />
With its growth based on international trade and economic<br />
globalisation, Singapore has integrated itself with the world<br />
economy through free trade with minimal-to-no trade barriers or<br />
tariffs, export-oriented industrialisation, and the large accumulation<br />
of received foreign direct investments, foreign-exchange reserves<br />
and assets held by sovereign wealth funds.<br />
As a highly-developed country, it has the third-highest GDP per<br />
capita (PPP) in the world. Identified as a tax haven, Singapore is the<br />
only country in Asia with an AAA sovereign credit rating from all<br />
major rating agencies.<br />
More importantly, Singapore ranks highly in key social indicators:<br />
education, healthcare, quality of life, personal safety, infrastructure<br />
and housing, with a home-ownership rate of 88%. Singaporeans<br />
enjoy one of the longest life expectancies, fastest Internet connection<br />
speeds, lowest infant mortality rates and lowest levels of corruption<br />
in the world. 8<br />
Due to its limited land area<br />
certain infrastructure services<br />
are particularly challenging.<br />
Jewel Changi Airport, Singapore.<br />
26<br />
27
THOUGHT LEADERSHIP<br />
THOUGHT LEADERSHIP<br />
THE CITY-STATE CONCEPT<br />
The hypothesis for the success of infrastructure development in<br />
Singapore is that its success is directly attributable to its city-state<br />
status. A city-state is an independent sovereign city which serves as<br />
the centre of political, economic and cultural life over its contiguous<br />
territory. 9 They have existed in many parts of the world since the<br />
dawn of history, including ancient poleis such as Athens, Jerusalem<br />
and Rome, as well as the Italian city-states of the Middle Ages and the<br />
Renaissance, such as Florence, Venice, Genoa and Milan.<br />
Infrastructure is the set of facilities and systems that serve a<br />
country, city or other area, 10 and encompasses the services and<br />
facilities necessary for its economy, households and firms to<br />
function. 11 Infrastructure is composed of public and private<br />
physical structures such as roads, railways, bridges, tunnels, water<br />
supply, sewers, electrical grids and telecommunications (including<br />
Internet connectivity and broadband access).<br />
In general, infrastructure has been defined as “the physical<br />
components of interrelated systems providing commodities and<br />
services essential to enable, sustain, or enhance societal living<br />
conditions and maintain the surrounding environment”. 12<br />
With the rise of nation states worldwide there is some<br />
disagreement as to the number of modern city-states that still<br />
exist; Singapore, Monaco and Vatican City are the candidates<br />
most identified. The Economist called Singapore the “world’s<br />
only fully functional city-state”.<br />
Considering the massive societal transformations needed to<br />
mitigate and adapt to climate change, contemporary infrastructure<br />
conversations frequently focus on sustainable development<br />
and green infrastructure. Acknowledging this importance, the<br />
international community has created policy focused on sustainable<br />
infrastructure through the SDGs, especially SDG9, “Industry,<br />
Innovation and Infrastructure”.<br />
One way to describe different types of infrastructure is to classify<br />
them as two distinct kinds: hard and soft infrastructure. 13 Hard<br />
infrastructure is the tangible, physical networks that support the wellbeing<br />
of communities. This includes roads, bridges, and railways. Soft<br />
infrastructure is all the institutions providing services that maintain<br />
the economic, health, social, environmental and cultural standards of<br />
a country. This includes educational programs, parks and recreational<br />
facilities, law enforcement agencies and emergency services.<br />
Gross fixed capital formation is a termed used to measure investment<br />
in land, plant and equipment improvements, as well as the construction<br />
of infrastructure. Essentially it is a measurement of how much of<br />
the nation’s gross domestic product (GDP) gets invested in capital<br />
formation. It is difficult to extract the infrastructure investment<br />
spend from GCFC since GCFC inventory contains items that may<br />
be used in capital formation but not remain part of infrastructure.<br />
Therefore, one has to look at infrastructure spend as a percentage<br />
of GDP. In 2021, China was the biggest investor on inland transport<br />
infrastructure at 4.8%, compared to the US at 0.5%, with Singapore<br />
and New Zealand at 0.6%. 14<br />
INFRASTRUCTURE IN SINGAPORE<br />
Due to its limited land area certain infrastructure services are<br />
particularly challenging. Water is one of those, with transportation<br />
another. In 2016 Singapore invested around 5% of its GDP on<br />
infrastructure. In 2023 it was 4% and is expected to rise to about<br />
4.4% by FY2026 to FY 2030. 15<br />
Water infrastructure<br />
Water supply and sanitation in Singapore are intricately linked to<br />
the historical development of Singapore. Access to water in Singapore<br />
is universal, affordable, efficient and of high quality. As of 2017, there<br />
were about 5 500 km of potable water pipes in Singapore.<br />
Innovative hydraulic engineering and integrated water management<br />
approaches such as the reuse of reclaimed water, the establishment of<br />
protected areas in urban rainwater catchments and the use of estuaries<br />
as freshwater reservoirs have been introduced along with seawater<br />
desalination to reduce the country’s dependence on untreated imported<br />
water. 16 Five desalination plants have been opened throughout the<br />
country since 2003, which in total are able to produce a maximum<br />
capacity of approximately 890 000 000m 3 per day.<br />
Singapore considers water a national security issue and the<br />
government has sought to emphasise conservation. Water access<br />
is universal and of high quality, though the country is projected to<br />
face significant water-stress by 2040. To circumvent this, the Public<br />
Utilities Board has implemented the “four national taps” strategy<br />
– water imported from neighbouring Malaysia, urban rainwater<br />
catchments, reclaimed water (NEWater) and seawater desalination.<br />
More critically, Singapore’s approach does not rely only on physical<br />
infrastructure; it also emphasises proper legislation and enforcement,<br />
water pricing and public education as well as research and development.<br />
Singapore has declared that it will be water self-sufficient by the<br />
time its 1961 long-term water supply agreement with Malaysia expires<br />
in 2061. However, according to official forecasts, water demand in<br />
Singapore is expected to double from 1.4-million cubic metres to<br />
2.8-million cubic metres per day between 2010 and 2060. The increase<br />
is expected to come primarily from non-domestic water use, which<br />
accounted for 55% of water demand in 2010 and is expected to account<br />
for 70% of demand in 2060. By that time, water demand is expected<br />
to be met by reclaimed water (50%) and by desalination accounting<br />
(30%), compared to only 20% supplied by internal catchments.<br />
Singapore considers water<br />
a national security issue.<br />
Road infrastructure<br />
Singapore has a road system covering 3 356 kilometres, which includes<br />
161 kilometres of expressways. 17 Roads take up 12% of the country’s<br />
total land area. As Singapore is a small island with a high population<br />
density, the number of private cars on the road is restricted with a<br />
pre-set car population quota, to curb pollution and congestion.<br />
Singapore’s car ownership rate is roughly 11%, whereas in the US<br />
it is nearly 80% and under 50% in Europe. In Singapore, car buyers<br />
must pay for Additional Registration Fees duties of either 100%,<br />
140%, 180% or 220% of the vehicle’s Open Market Value and bid for a<br />
Singaporean Certificate of Entitlement (that varies twice a month in<br />
supply based on the number of car registrations and de-registrations),<br />
which allows the car to be driven on the road for maximum period<br />
of 10 years. Car prices are generally significantly higher in Singapore<br />
than in other English-speaking countries. According to the Land<br />
Transport Authority the total vehicle population of Singapore in<br />
2021 was 988 755 of which 532 204 were private passenger cars.<br />
Singapore’s public transport network comprises trains (consisting<br />
of the MRT and LRT systems), buses and taxis. Taxis are a popular form<br />
of transport as the fares are relatively affordable when compared to<br />
many other developed countries, while private cars in Singapore are<br />
the most expensive to own worldwide.<br />
Woodlands MRT Station.<br />
Rail Corridor, Singapore.<br />
Singapore is one of the greenest<br />
cities in the world, with parks and<br />
gardens occupying 47% of all land.<br />
28 29
THOUGHT LEADERSHIP<br />
Settlement patterns<br />
The city of Singapore is situated in the southern portion of the<br />
main island. Over time, urbanisation has blurred the differences<br />
between city and country. Built-up areas now cover a large part of<br />
the city-state. The older parts of the city have been substantially<br />
refurbished, especially along the Singapore River but elsewhere<br />
as well. The government’s Housing and Development Board (HDB)<br />
has relocated commerce into separate districts and has created<br />
integrated residential communities inhabited by people with a<br />
mixture of incomes. About four-fifths of Singapore’s population<br />
now resides in high-rise HDB flats located in housing estates and<br />
new towns. The new towns – such as Woodlands, Tampines and<br />
Yishun – are scattered across the island and are characterised by<br />
easy access to places of employment and shopping districts.<br />
THE LESSONS FROM SINGAPORE<br />
1) The compact geography of the island has forced a compact urban environment, which has resulted in reducing the overall extent<br />
of the infrastructure network.<br />
2) The compactness of the city has enabled effective infrastructure services to be delivered.<br />
3) Infrastructure effectiveness has improved community wellbeing.<br />
4) More critically, Singapore’s approach does not rely only on physical infrastructure; it also emphasises proper legislation and<br />
enforcement, pricing and public education as well as research and development.<br />
5) Singapore has embraced innovative engineering and integrated management approaches to improve efficiency and effectiveness.<br />
6) The Singapore government has been prepared to make the hard choices regarding what type of infrastructure it is willing to invest in,<br />
and where. One of these is the restriction on private light vehicle ownership. Reducing private vehicle ownership has had a knock-on<br />
effect with regard to road construction, maintenance, land area and associated services such as parking and traffic management.<br />
7) In exchange for the restriction on private vehicle ownership, it has provided excellent public transport.<br />
8) Singapore has been very strategic in its approach to new urban developments, targeting integrated residential communities<br />
inhabited by people with a mixture of incomes. The new towns are characterised by easy access to places of employment and<br />
shopping districts.<br />
1 Brimelow, Ben, 2018. How a tiny city-state became a military powerhouse with the best air force and navy in Southeast Asia. Business Insider. Archived from the original on 8 April 2018. Retrieved: 11 July 2023<br />
2 Department of Statistics, Singapore, 2019. Environment. Department Statistics Singapore<br />
3 Global Data 2021. Largest Countries in the World by Population Density in 2021 (People per Square Kilometres)<br />
4 Gan, V. 2015. The link between green space and well-being isn’t as simple as we thought. In: Bloomberg<br />
5 Skytrax 2023. Airport of the year winner history<br />
FINDINGS<br />
6 MPA 2023. Singapore’s 2019 Maritime Performance<br />
The consensus is that the higher the investment in infrastructure<br />
the 8 higher World Bank, the 2022. economic Country Data: growth. Singapore. However, as alluded to in previous<br />
articles, I have yet to see how much economic growth is delivered<br />
by higher infrastructure investment, and how that investment is<br />
to be sustained when the economy weakens as it does cyclically.<br />
12 Fulmer, J. 2009. What in the world is infrastructure?. PEI Infrastructure Investor (July/August): 30-32<br />
Ordinarily, 13 Investopedia, governments 2023. Infrastructure: are Definition, able Meaning, to reduce and Examples their infrastructure<br />
investment spending in economic downcycles, but that shouldn’t<br />
alleviate the maintenance spending associated with previous<br />
16 Ministry of Sustainability and the Environment, 2023. Our water policy a nutshell<br />
investment commitments, although it does, resulting in deteriorating<br />
17 Land Transport Authority, 2023. Tracing our steps<br />
infrastructure assets.<br />
7 Sharanya, P. 2020. Singapore port container throughput hits record high in 2019. The Business Times, 13 January 2020<br />
CONCLUSION<br />
Compactness and strategic investment decision-making are key<br />
factors in Singapore’s success. This raises further issues that need<br />
to be investigated with regard to the original proposition. One of<br />
these is the compact city, and the other is the use of innovative<br />
engineering and integrated management approaches. The latter<br />
speaks to microgrids and distributed grids.<br />
In the next issue these two factors will be further explored.<br />
9 Encyclopaedia Britannica, 2018. City-state | Definition, History & Facts. Encyclopaedia Britannica. Archived from the original on 23 November 2018. Retrieved 12 July 2023<br />
10 Infrastructure | Define Infrastructure at Dictionary.com Archived 2016-03-05 at the Wayback Machine<br />
11 O’Sullivan, A., and Sheffrin, S., 2003. Economics: Principles in Action. Upper Saddle River, NJ: Pearson Prentice Hall. p. 474. ISBN 978-0-13-063085-8<br />
14 Statista, 2021. Global investment on inland transport infrastructure as share of GDP in 2021, by selected countries<br />
15 Han, G. 2023. Govt spending may hit 20% of GDP by FY2030, GST hike and tax moves were needed to fund growing needs: MOF.” The Straits Times, 9 July 2023<br />
1012608<br />
THAT’S SUSTAINABILITY, FIRST.<br />
Since our sustainability journey began, we’ve been leading the<br />
way, writing our planet-friendly story one industry first at a time.<br />
From becoming the first cement manufacturer in Southern Africa<br />
to publish an environmental policy, to modifying our plants to<br />
emit lower CO 2<br />
emissions, to introducing a range of green cement<br />
as early as 2000, putting sustainability first has been, and always<br />
will be, second nature to us.<br />
30<br />
www.afrisam.com<br />
Creating Concrete Possibilities
INFRASTRUCTURE<br />
INFRASTRUCTURE<br />
PPPs:<br />
the right tool for<br />
green and resilient<br />
infrastructure<br />
Private participation and PPPs help bridge financing gaps while delivering sustainable<br />
infrastructure in developing economies – stimulating economic recovery. But how can PPPs<br />
be the “right tool” to support sustainable and resilient infrastructure development?<br />
BY THE WORLD BANK*<br />
*Article written by Mikel Tejada Inañez and managed by the Infrastructure Finance, PPPs & Guarantees Group of the World Bank.<br />
A PPP is a performance-based instrument.<br />
In the context of long-term PPP contracts, we need adjustments<br />
that add a certain degree of flexibility. Governments and practitioners<br />
need to embrace a more diverse pool of PPP models, including the<br />
better understood contractual PPPs, but also additional forms of<br />
institutional PPPs – for example, joint venture-type schemes. The<br />
challenge is to be aware of different options and wisely apply the<br />
best fit for the purpose. Since fully complete contracts that predict<br />
all potentialities are unattainable, contracts should instead put in<br />
place processes that foster satisfactory resolution of unforeseeable<br />
circumstances while increasing flexibility.<br />
Mainstreaming a lifecycle approach to infrastructure project<br />
management is key. First and foremost, governments<br />
must follow good investment planning processes that<br />
prioritise projects based on development needs, socio-economic<br />
return and targeted to ensure inclusivity. There must be thorough<br />
understanding of associated commercial, technical, environmental,<br />
social and financial risks and their implications. Here, we need<br />
clear, practical guidance for decision-makers focused on real,<br />
lifelong affordability and value for money. All these conditions<br />
fit the public-private partnership (PPP) model well since lifecycle<br />
costing, risk-sharing and value for money are intrinsic to it.<br />
Integrating the potential impact of climate change in infrastructure<br />
project design and structure in a manner that enhances value<br />
for money is also critical. The main challenge to climate change<br />
adaptation and mitigation of its potential impact on infrastructure<br />
is its integration into the project design and structure in a manner<br />
that enhances long-term affordability. This means looking at the<br />
long-term benefits of sustainability given the inherent uncertainties<br />
that could affect these assets over time. Here too, the very nature of<br />
PPPs makes them a strong tool to meet these challenges.<br />
A PPP is a performance-based instrument, accustomed to the<br />
concept of long-term value for money, focusing on continued<br />
quality service rather than simply the underlying assets. With<br />
clear, contractually bound key performance indicators, PPPs are<br />
well-placed to incentivise adaptation and mitigation to climate<br />
change and resilience in project design and service delivery based<br />
on private sector skills, technology and innovation.<br />
PPPs could respond even better to current trends and challenges<br />
by introducing more flexibility in terms of models and contractual<br />
provisions, while including fiscally sustainable government support<br />
mechanisms to address resilience and affordability issues:<br />
• Even with innovative private-sector approaches, climate change<br />
resilience and other future shocks will still require backing<br />
from the public sector to manage all the risks associated<br />
with long-term infrastructure projects. Government support<br />
mechanisms will facilitate reaching the most adequate<br />
risk allocation among parties that maximises value for<br />
money, ensuring both resilience and affordability. Instead of<br />
a principal-agent relationship, PPPs should create a framework<br />
and process for the joint discovery of innovative solutions for<br />
infrastructure delivery.<br />
• Proper understanding of the fiscal implications of PPPs and<br />
their adequate integration in the overall public investment<br />
strategy prevent misconceptions that perceive PPPs as “free”<br />
infrastructure. This will help the above-mentioned government<br />
support mechanisms to be seen, not as an additional cost, but<br />
rather as tools to create the optimal structure to deliver quality<br />
infrastructure services.<br />
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Public Disclosure Authorized<br />
Public Disclosure Authorized<br />
Version 3<br />
PUBLIC-PRIVATE PARTNERSHIPS<br />
Reference Guide<br />
PUBLIC-PRIVATE PARTNERSHIPS REFERENCE GUIDE | Third Edition | International<br />
Bank for Reconstruction and Development | The World Bank | [2017]<br />
There is no single, internationally accepted definition of public-private partnerships (PPPs). The Reference<br />
Guide takes a broad view of what a PPP is, defining it as:<br />
A long-term contract between a private party and a government entity, for providing a public asset or<br />
service, in which the private party bears significant risk and management responsibility and remuneration<br />
is linked to performance.<br />
Practitioners can, if their projects are well-selected and their PPPs carefully structured, design and<br />
implement projects that optimise cost-effectiveness and social wellbeing by aligning private partner profit<br />
objectives with public sector service objectives that support the public interest.<br />
A substantial body of knowledge on PPPs has been generated across the world by a broad spectrum of<br />
practitioners from government, the private sector, international development institutions, academia and<br />
expert advisors. This guide helps readers navigate this body of knowledge. It introduces key topics on PPP,<br />
sets out options and directs readers to examples and references where they can learn more.<br />
THOUGHT [ECO]NOMY<br />
CLIMATE TOOLKITS FOR INFRASTRUCTURE PPPs | Hydropower | Renewables | Water |<br />
Roads | ICT | The World Bank Group | [2023]<br />
THOUGHT [ECO]NOMY<br />
ENABLING PRIVATE INVESTMENT IN CLIMATE ADAPTATION AND RESILIENCE |<br />
Current Status, Barriers to Investment and Blueprint for Action | The World Bank |<br />
The Global Facility for Disaster Reduction and Recovery<br />
READ REPORT<br />
greeneconomy/report recycle<br />
Governments and public budgets are strained from Covid-19 recovery efforts, making it difficult to address<br />
climate risks and meet the goals of the Paris Agreement. Private sector participation is crucial to bridging the<br />
funding gap and advancing sustainable infrastructure development.<br />
PPPs are one way to bring in private investment to infrastructure in developing countries. They offer a<br />
well-informed and balanced risk allocation between public and private stakeholders, provide long-term<br />
visibility and stability through contractual agreements and compensate for climate change uncertainty by<br />
offering contractual predictability.<br />
The toolkits provide a set of practical tools to integrate climate mitigation and adaptation into PPP<br />
advisory work and project structuring.<br />
READ REPORT<br />
greeneconomy/report recycle<br />
ENABLING PRIVATE<br />
INVESTMENT IN<br />
CLIMATE ADAPTATION<br />
& RESILIENCE<br />
Current Status, Barriers to Investment and Blueprint for Action<br />
The report proposes a concrete, stepped approach for governments to address barriers to private<br />
investment in adaptation and resilience, so private capital can actively contribute to financing national and<br />
local priorities. It provides guidance and a draft engagement plan for governments to create an enabling<br />
environment as well as business models for private sector investment in adaptation and resilience.<br />
A coordinated approach to developing, financing and executing priority adaptation investments, driven<br />
by countries’ goals and national investment plans, can help accelerate and scale up private investment<br />
to meet the needs of climate-vulnerable communities and economies. The public sector – government<br />
agencies, policy makers, bilateral and multilateral development finance institutions, public sector funds<br />
and development organisations – thus plays a critical role in mobilising private investment.<br />
32<br />
33
MANUFACTURING<br />
Making a<br />
MEANINGFUL IMPACT<br />
With 120 years of experience in energy, ACTOM has continually evolved its offerings to meet<br />
Africa’s energy needs. <strong>Green</strong> <strong>Economy</strong> <strong>Journal</strong> caught up with Mervyn Naidoo, Group CEO at<br />
ACTOM and Chairman of the Manufacturing Circle.<br />
ACTOM celebrates its 120th anniversary this year. Please provide<br />
an overview of the company.<br />
ACTOM is the largest manufacturer, repairer and distributor of<br />
electro-mechanical equipment in the Sub-Saharan region, serving<br />
the energy, general industry and mining sectors. Our primary focus<br />
is supplying, repairing, and maintaining an extensive range of<br />
electro-mechanical equipment in Southern Africa.<br />
Our journey began when British General Electric entered the South<br />
African market 120 years ago, laying the foundation for what would<br />
become ACTOM. Throughout the years, our ownership has evolved,<br />
and we were previously known as ALSTOM when GCE ALSTOM entered<br />
the country. However, around 2008, as GCE ALSTOM sought to<br />
leave South Africa, we transformed into a private equity firm<br />
with the support of investors such as the Old Mutual Trust. This<br />
transition allowed us to continue our commitment to innovation<br />
in the field of electro-mechanical equipment.<br />
Please outline the energy sectors that ACTOM caters to.<br />
We manufacture a wide range of equipment, including boilers<br />
and motors used for power generation and we take pride in being<br />
one of the largest manufacturers of high-voltage equipment,<br />
particularly for the transmission network. In the distribution sector,<br />
we are actively involved in manufacturing and providing repair<br />
services for transformers. In the renewable energy domain, we focus<br />
on supplying the balance of plant equipment that connects to<br />
the grid. This includes a comprehensive range of solutions, from<br />
switchgear to protection and control schemes, as well as distribution<br />
transformers and high-voltage isolators and disconnectors required<br />
for transmission network connection.<br />
ACTOM believes that African manufacturers can play a role in<br />
addressing the energy crisis. How so?<br />
Our confidence in this belief stems from our 120-year presence and<br />
operations in Southern Africa, where we have developed considerable<br />
capacity and intellectual property. We have observed that a significant<br />
portion of the equipment servicing the energy market in Africa comes<br />
from external sources, like India and China.<br />
What sets ACTOM apart is our comprehensive business scope,<br />
which includes a dedicated repairs and services division that<br />
extends support across the continent. With this setup, we are<br />
well-positioned to contribute to the development of African<br />
manufacturers, empowering them to become key players in addressing<br />
regional energy challenges. Through fostering a strong network of<br />
African manufacturers, we see immense potential for collectively<br />
tackling the energy crisis.<br />
How, in your view, will the African Continental Free Trade Area<br />
(AfCFTA) accelerate the development of Africa’s energy resources?<br />
AfCFTA will create an environment of increased accessibility<br />
to energy equipment within the African continent, fostering<br />
better energy infrastructure development. Manufacturers will<br />
have greater opportunities to grow their businesses, allowing them<br />
34<br />
to supply energy products and solutions to a broader range of<br />
African countries.<br />
At present, various import duties and economic obstacles hinder<br />
the establishment of significant economies of scale in manufacturing.<br />
However, with AfCFTA in place, these barriers will be reduced, promoting<br />
a competitive energy sector across Africa. By harnessing the potential<br />
of AfCFTA, Africa can witness accelerated growth in its energy resources<br />
and improve energy access throughout the continent.<br />
Please talk to us about ACTOM’s involvement in the creation<br />
of industrial hubs in Africa.<br />
ACTOM’s involvement is exemplified by our recent acquisition of<br />
a manufacturing facility in Nairobi. This strategic move enables us<br />
to better serve the East African region’s economic bloc while<br />
building economies of scale. By operating locally, we aim to support<br />
the regional economy and fully participate in the African free trade<br />
economy, which fosters long-term partnerships and contributes to<br />
sustainable development in the region.<br />
With a manufacturing base in Nairobi, ACTOM can establish a strong<br />
foothold in this interconnected market. This approach aligns with<br />
our commitment to being an integral part of local economies,<br />
promoting collaboration and mutual growth opportunities.<br />
ACTOM worked on REIPPPP Bid Windows 1 to 4.5 and 5. How can<br />
renewable energy projects reindustrialise South Africa?<br />
The adoption of renewable energy sources by private companies,<br />
particularly in the mining sector, is gaining momentum, leading<br />
to enhanced productivity and a surge in economic activity. As these<br />
companies invest in renewable energy projects, the country’s energy<br />
supply becomes more stable and self-reliant, ultimately bolstering<br />
economic growth.<br />
South Africa’s energy landscape is undergoing a transformative<br />
shift, positioning the nation as a key player in the sector. By embracing<br />
renewable energy, South Africa is poised to reindustrialise its<br />
economy, promoting long-term prosperity and resilience in the face<br />
of energy challenges.<br />
ACTOM is excited about the multitude of opportunities that arise<br />
amidst the current challenges faced by our continent. Our country’s<br />
energy crisis and Africa’s need for energy solutions present a ripe<br />
environment for companies like ourselves to actively participate and<br />
make a meaningful impact.<br />
Mervyn Naidoo,<br />
Group CEO, ACTOM.<br />
Did you know that Section 12B of the Tax Act<br />
allows for the accelerated depreciation<br />
of your power generation capex resulting<br />
in a 27.5% saving on your project installation?<br />
Agri-Voltaics and Solar Carports<br />
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Blue Sky Energy are experts in the design, procurement<br />
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Battery energy storage installations provide access to solar<br />
energy daily during peak hours when the sun is not shining<br />
and enable users to bridge their primary energy needs<br />
through grid interruptions.<br />
While the levelised cost of hybrid solar and battery storage<br />
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Would you like to know if your property or business can<br />
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CIRCULARITY<br />
ECOLOGICAL TRANSITION<br />
has its own ecosystem<br />
Ecomondo, Italian Exhibition Group’s international trade show for<br />
the circular economy, will be opening the doors of its 26th edition<br />
with a new payoff: The Ecosystem of the Ecological Transition.<br />
Rimini Expo<br />
Centre, Italy<br />
7-10 November<br />
2023<br />
From exploiting waste to make further resources to the<br />
regeneration of soil and agro-forestry and food ecosystems,<br />
from energy obtained from biomass to the use of waste as<br />
secondary raw materials. And more still: the entire integrated<br />
water cycle and environmental monitoring, protection of the seas<br />
and aquatic environments in their essential function for human<br />
sustenance and economic activities.<br />
DISTRICTS FOR MY PROJECTS<br />
Rimini will feature the WEEE District with a specific focus on repowering<br />
technologies and new systems for recycling waste from electrical and<br />
electronic equipment PV panels and wind turbine blades. In the PAPER<br />
District, the focus will be on systems for the collection, logistics and<br />
recycling of paper and cardboard in cooperation with COMIECO. Lastly,<br />
a themed itinerary will be dedicated to the production of plastics.<br />
TEXTILE WASTE<br />
The textile industry has been identified as a key value chain for<br />
which the EU has foreseen actions to promote its sustainability,<br />
circularity, traceability and transparency. Key factors are eco-design<br />
requirements, producer responsibility schemes and labelling<br />
systems. In Rimini, ample emphasis will be placed on the entire<br />
supply chain: from production to post-consumption.<br />
MISSION: TO INNOVATE<br />
Companies and investors will have a new and larger platform for<br />
dialogue to cultivate the new generation of innovative businesses.<br />
More than 50 start-ups are expected in Rimini for the 2023 edition. IEG<br />
and Italian Trade Agency are promoting the initiative with Territorial<br />
Appeal Research, Emilia-Romagna’s regional agency (ART-ER) and<br />
Confindustria as their main partners, in addition to collaboration<br />
with National Association of Young Innovators (ANGI), to promote<br />
all-round innovation.<br />
BLUE ECONOMY<br />
From fishing and aquaculture to the regeneration of ports and<br />
coastlines and seawater desalination technologies: the blue economy<br />
will include all traditional and emerging economic sectors linked to<br />
the development of Italian and Mediterranean marine resources.<br />
ECOMONDO: AN EVOLVING EVENT<br />
For the 2023 edition, Ecomondo will explore frontline themes.<br />
Millennials and Generation Z are showing considerable sensitivity<br />
towards environmental protection and IEG’s event acts as a platform<br />
of ideas to give shape to today’s technological research and create<br />
tomorrow’s jobs. Exchange of knowledge, access to research tenders<br />
and European funding: Ecomondo addresses the new generations<br />
so that they can participate in the ecological transition.<br />
THE CONFERENCE PROGRAMME<br />
Ecomondo will offer its community a full programme of conventions<br />
and conferences organised under the aegis of the Technical-Scientific<br />
Committee, directed by Professor Fabio Fava from Bologna University,<br />
in collaboration with the event’s main institutional and technical<br />
partners, together with the international board that includes experts<br />
from the European Commission, OECD, FAO, UfM, EEA and ISWA.<br />
INSTITUTIONAL PARTNERS<br />
The Ministry for the Environment and Energy Security, the Ministry<br />
for Foreign Affairs and International Cooperation and ITA, together<br />
with the increasing participation of executives from the European<br />
Commission, will be joined by CONAI, Utilitalia, CIB, CIC, CONAU,<br />
Assoambiente, Cisa Ambiente, the Foundation for Sustainable<br />
Development and National <strong>Green</strong> <strong>Economy</strong> Council as institutional<br />
partners of the event, as well as the Kyoto Club, Legambiente,<br />
Federazione ANIE, FIRE, ANFIA, ISPRA, Water Europe, ISWA and WBA.<br />
PUSH TOWARDS INTERNATIONALITY<br />
With a 58% increase in foreign visitation compared to 2021, the<br />
involvement of profiled operators from the Balkan area, non-EU Europe,<br />
North Africa (Egypt, Morocco, Tunisia), Senegal, Ivory Coast, Angola,<br />
Ghana, Rwanda, the Middle East, as well as Canada, Latin America,<br />
the US and China will continue for the next edition. The second<br />
edition of the Africa <strong>Green</strong> Growth Forum will be staged thanks to<br />
the contribution of prestigious international agencies, such as the<br />
Union for the Mediterranean and UNIDO, non-profit organisations,<br />
including Res4Africa, Business Council for Africa.<br />
https://en.ecomondo.com/<br />
THE WATER SUPPLY CHAIN AND SAL.VE<br />
Waste as Resource, Sites & Soil Restoration, Circular & Regenerative Bio-economy, Bio-Energy & Agroecology, Water Cycle & Blue <strong>Economy</strong>,<br />
Environmental Monitoring & Control will be the themed exhibition areas at Ecomondo 2023.<br />
36
ENERGY<br />
GRID CAPACITY CONSTRAINTS<br />
jeopardise renewable energy projects<br />
As South Africa ramps up its roll-out of renewable energy, it is now confronting the same<br />
challenge faced by countries across the globe. Depleted grid capacity in resource-rich areas<br />
is making it increasingly difficult to connect new renewable energy projects to the grid,<br />
particularly in the Northern, Eastern and Western Cape.<br />
BY KRISTIN ENGEL*<br />
simple truth stands that if there is no grid capacity<br />
in the country, there is no more renewable energy and<br />
“The<br />
there is no future for renewable energy. This will continue<br />
to cripple the energy system and our economy.” These were the<br />
words of Niveshen Govender, CEO of the South African Wind Energy<br />
Association (SAWEA), after commemorating Global Wind Day during<br />
a panel discussion hosted in Cape Town in June by renewable energy<br />
company Red Rocket.<br />
Govender referred to the recent Renewable Energy Grid Survey<br />
released by Eskom, SAWEA and the South African Photovoltaic<br />
Industry Association (SAPVIA) earlier in June 2023, indicating there<br />
would be around 30GW of wind energy projects in various stages of<br />
development across the country over the next 10 years – increasing<br />
tenfold South Africa’s current installed wind energy capacity of 3.4GW.<br />
This 30GW of wind energy is part of a total of 66GW of renewable<br />
energy projects in the pipeline.<br />
SAWEA believes there is massive potential for wind energy, with<br />
South Africa now considering the feasibility of offshore wind and<br />
wind-powered green hydrogen production.<br />
Govender said: “This increases the South African potential for new<br />
wind generation to more than 100 [GW] in the next 10 years. On Global<br />
Wind Day, it is important that we encourage governments, businesses<br />
and individuals to invest in wind, support research and development,<br />
and embrace policies to accelerate the deployment not just in South<br />
Africa, but globally.”<br />
However, the biggest stumbling block remains the depleted grid<br />
capacity to connect new renewable energy plants in resource-rich<br />
areas around the country.<br />
DEPLETED GRID CAPACITY<br />
According to Eskom’s current Generation Connection Capacity<br />
Assessment (GCCA), grid capacity in the Northern and Western<br />
Cape is fully depleted, while the Eastern Cape has worryingly low<br />
grid capacity.<br />
There are variations of capacity in each of the other provinces,<br />
with a total remaining grid capacity of about 22.754MW. Grid<br />
access requires independent power producers (IPPs) to apply for<br />
a cost estimate letter – this provides a good indication of the<br />
interest in grid access in each province. Eskom said the interest in<br />
each province currently exceeds grid capacity, except for Gauteng,<br />
Mpumalanga and KwaZulu-Natal.<br />
Eskom’s Transmission Development Plan 2023-2032 is aimed<br />
at supporting grid expansion for both public and private IPP<br />
projects, which is aligned with the amount of renewable energy<br />
that needs to be connected. However, Govender said the timelines<br />
didn’t seem to align. He said although there was a strong policy<br />
framework to support the rollout of renewable energy, and wind<br />
energy specifically, they continued to choke on implementation.<br />
Article courtesy Daily Maverick<br />
Grid congestion is not unique to South Africa – several countries<br />
are facing the same problems – but perhaps the pressure to address<br />
this is felt more urgently in South Africa as daily rolling blackouts<br />
continue to damage all sectors of the economy.<br />
Brian Cunningham, commercial and industrial (C&I) development<br />
manager at Cape Town-based Red Rocket, said: “The grid constraints<br />
currently are in the Northern, Eastern and Western Cape and a huge<br />
amount of renewable projects now are effectively on ice until the<br />
grid can be resolved. Unfortunately for Eskom, they do not know<br />
which projects are going to be successful, and it’s challenging to<br />
try to resolve the whole grid (in all the regions at the same time).<br />
“It’s my opinion that more than likely, things will move to a<br />
stage where IPPs are going to resolve the grid constraints through<br />
co-creation with Eskom and potentially with large C&I clients.”<br />
Even though there are severe grid constraints, the interest in<br />
developing wind energy projects is higher than ever. Cunningham<br />
said many new wind projects were being developed in areas where<br />
the grid wasn’t constrained.<br />
IPPs are moving out to the less windy areas.<br />
“If there’s no grid capacity in the country, then we’re all in a difficult<br />
position, but the IPPs are very good at finding solutions and we can<br />
do that in partnership with Eskom.<br />
“As Red Rocket, we’re always in discussions and looking for solutions<br />
with the IPP office within the Department of Mineral Resources and<br />
Energy to find novel ways to unlock the grid, in partnership and as<br />
a team effort,” he said.<br />
Eskom spokesperson Daphne Mokwena confirmed that the power<br />
utility is preparing to issue updated grid queuing rules to better<br />
manage limited grid connection capacity in Eskom’s Interim Grid<br />
Capacity Allocation Rules document.<br />
“The rules are developed to allocate grid capacity to projects that<br />
are shovel-ready, thereby avoiding the hogging of capacity. Eskom<br />
has plans, such as the Transmission Development Plan 2023-2032,<br />
to support the grid expansion for public and private IPP projects.<br />
“The Generation Connection Capacity Assessment 2025 will be<br />
used to support the confirmation of available grid capacity (including<br />
onshore wind projects),” Mokwena said.<br />
In the sixth bid window of the Renewable Energy Independent<br />
Power Producer Procurement Programme, no new wind generation<br />
was procured, and, according to experts and stakeholders in the<br />
Grid capacity in the Northern<br />
and Western Cape is fully depleted.<br />
ENERGY<br />
industry, this was directly due to the fact that grid capacity had been<br />
taken up in the Eastern, Northern and Western Cape and no new<br />
projects could be allowed in these areas without further studies.<br />
Eskom said: “The large volumes of capacity for renewables exceed<br />
the local network capacity and many new long-distance lines are<br />
required. This is detailed in the Transmission Development Plan<br />
2023-2032, which expands the grid capacity connection to 44.6GW<br />
by 2032.”<br />
CSIR senior energy researcher, Monique le Roux, said these areas<br />
are the best wind resource locations in the country and are where<br />
most wind development has taken place.<br />
“More development of wind power projects has taken place in other<br />
provinces recently as there is more grid capacity available, but there<br />
are definitely questions around the viability of these projects and the<br />
cost of wind power produced by these projects due to the low wind<br />
resource in these areas,” she said.<br />
According to Le Roux, generation from renewable energy can be<br />
constructed quickly and it will therefore remain one of the best new<br />
generation sources to resolve capacity constraints and help to alleviate<br />
the electricity crisis.<br />
SHORT-TERM SOLUTIONS<br />
There is growing pressure on government for more short-term grid<br />
optimisation solutions to be considered to open grid capacity soon<br />
and address the immediate problem. Le Roux said: “The most probable<br />
short-term solution would be to have agreements with renewable<br />
generators to curtail some of their power during peak generation<br />
periods so that transmission lines are not overloaded.”<br />
Eskom could also look at the rollout of battery energy storage<br />
systems or fast-track transmission grid upgrades. But an updated<br />
Integrated Resource Plan (IRP) is crucial in identifying the leastcost<br />
generation options so that planning can happen accordingly,<br />
rather than taking a shotgun approach and just hoping that the<br />
least-cost option is being implemented, potentially wasting billions<br />
of rands.<br />
38 39
ENERGY<br />
ENERGY<br />
Make sure your solar installation<br />
has municipal approval to<br />
AVOID<br />
GETTING BURNT by insurers<br />
As thousands of South Africans switch to alternative power supply systems, municipalities<br />
have warned of the potential fire risks. And insurers are unlikely to pay out claims if your<br />
installation was not approved by your municipality.<br />
Le Roux delved into the root causes of the grid constraints<br />
and explained that the South African grid was originally designed<br />
around large coal-fired power stations that generated power centrally<br />
in the north of the country. This power was then transmitted via<br />
high-voltage lines to customers in the southern parts. However, there<br />
is now a reverse in power flow, where power is generated in the<br />
south of the country where renewable energy resources are<br />
more abundant, and then transported to the north where most of the<br />
electricity users live.<br />
“These transmission lines have a limited capacity and at present,<br />
when all the approved wind and solar generators in the Northern,<br />
Western and Eastern Cape are generating at maximum capacity, the<br />
lines can become overloaded trying to export the power in these areas.<br />
*Written by Kristin Engel, Daily Maverick<br />
“The lines have thus reached their thermal limit and any additional<br />
generation that is added can cause them to overheat, thereby<br />
damaging the power lines,” she said.<br />
To aid the rollout of large-scale renewable power generation,<br />
investment and upgrades of the transmission network will be<br />
necessary. This issue is being encountered globally where<br />
countries have invested in renewable energy and have had to scale<br />
back on those plans due to transmission grid constraints.<br />
“This is one of the hidden costs of renewable energy generation<br />
that is not properly accounted for and planned for and was not<br />
included in the IRP 2019 – it is going to increase the cost of renewable<br />
energy considerably in future,” said Le Roux.<br />
An updated Integrated Resource Plan<br />
is crucial in identifying the least-cost<br />
generation options.<br />
BY NEESA MOODLEY<br />
The Cape Town municipality’s Fire and Rescue Service says the<br />
increased use of items such as solar installations, generators<br />
and inverters powered by rechargeable batteries has caused<br />
the department to revisit its incident management playbook.<br />
“While these devices are fulfilling a crucial role in keeping users’<br />
lights on, and keeping their businesses going during loadshedding,<br />
users are also reminded that they can pose a risk if not installed, stored<br />
or utilised properly. In fact, systems that are not installed properly,<br />
safely and legally are one of the largest contributors to extended<br />
power outages,” says the City of Cape Town.<br />
To minimise the potential damage, municipalities require all solar<br />
PV and/or battery systems to be installed by a competent installer<br />
who must provide a Certificate of Compliance. All systems that are<br />
connected to the wiring of the building must be registered with<br />
the City of Cape Town before installation and, from October, only<br />
city-approved inverters will be accepted for these systems. This is to<br />
reduce the risk of electrocution of those working on electrical grids<br />
and to speed up the solar system authorisation turnaround time.<br />
Christelle Colman, the co-founder of Ami Underwriting Managers,<br />
says more fire-related claims are coming through now as solar<br />
installations increase. “The last thing you need in that scenario is to<br />
have your house burn down and realise that it was the result of a<br />
faulty solar installation,” she warns.<br />
RECENT INCIDENTS IN WESTERN CAPE<br />
• Four people overcome by fumes from a generator in Parow,<br />
with one death.<br />
• A gas explosion at a home in Hout Bay that was caused by the<br />
gas source not being switched off and resulted in one person<br />
sustaining burn wounds.<br />
• A fire on a truck transporting lithium-ion batteries. Firefighters<br />
managed to prevent the fire from spreading to the trailer,<br />
avoiding a major hazard.<br />
• The batteries on an inverter in a store within a mall ignited,<br />
resulting in the mall having to close its doors while the incident<br />
was attended to.<br />
• Solar panels on a factory roof caused the wires to arch, resulting<br />
in a fire. Firefighters had to wait for technicians to isolate the<br />
panels before they could extinguish the fire.<br />
• A fire was caused at a neighbouring property after a battery<br />
bank overheated because of insufficient ventilation.<br />
Municipalities require all solar PV<br />
and/or battery systems to be installed<br />
by a competent installer.<br />
SAFE ROOFTOP PV INSTALLATIONS<br />
• Ask if the solar PV service provider has substantial experience,<br />
with references.<br />
• Ask whether the solar PV service provider designed, supplied<br />
and installed the system or only carried out one or two of<br />
these steps.<br />
• The PV service provider should be accredited with a third-party<br />
quality assurance programme such as a SAPVIA’s PV <strong>Green</strong> Card.<br />
• The installer must apply to the City to authorise the system for<br />
grid connection to ensure the safety of the electrical network,<br />
your home and all who work on the electrical grids.<br />
• If City staff and contractors do not know about systems connected<br />
to the grid, they run the risk of electrocution.<br />
• Authorisation must be obtained from the City before installation.<br />
• Get a structural engineering assessment – make sure your roof<br />
can withstand the weight and wind load of solar PV panels.<br />
• You will need building plans approved if the panels protrude<br />
more than 600mm above the highest point of the roof or<br />
are raised more than 1.5m above any point on the roof, or if<br />
ground-mounted, the panels in their installed position project<br />
more than 2.1m above the natural/finished ground level.<br />
The Mayoral Committee member for safety and security, JP Smith,<br />
says while the city appreciates that residents want to protect<br />
themselves from the impacts of loadshedding, the incidents<br />
highlight the need to be cautious and vigilant about how energy<br />
solutions are used and stored.<br />
“Ventilation is a key consideration, due to the risk of noxious gases<br />
from the use of petrol or diesel, but there is also the very real risk of<br />
devices overheating and catching fire. In the event of a fire, these<br />
new-age batteries also require very specific firefighting methods,<br />
so households and businesses need to ensure that they have the<br />
correct fire extinguishers on hand for their specific needs,” he says.<br />
Electrical equipment not switched off before the power comes<br />
back on after loadshedding, and incorrectly installed or unapproved<br />
solar PV and/or battery systems increase the risk of circuits tripping<br />
and fire hazards.<br />
Article courtesy Daily Maverick<br />
40<br />
41
ENERGY<br />
ENERGY<br />
SOLID FOUNDATIONS<br />
for SA’s growth in<br />
RENEWABLE ENERGY<br />
When ensuring that South Africa’s fast-growing renewable energy sector<br />
projects have strong foundations – literally – it is vital that ground conditions<br />
are understood as early as possible in the project life cycle.<br />
BY SRK CONSULTING*<br />
As part of the SRK Consulting global network of engineers<br />
and scientists, SRK Consulting (South Africa) has been<br />
extensively involved in geotechnical work on the country’s<br />
renewable energy projects. This includes wind farms and solar<br />
projects from the Western Cape to Limpopo, according to Daniell<br />
du Preez, engineering geologist at SRK Consulting. Du Preez is<br />
often one of the first people on site – and in the case of the oftenremote<br />
location of these projects, this presents various challenges.<br />
“The country’s wind farms, for instance, are often in remote,<br />
inhospitable and mountainous areas,” he explains. “Heavy machinery<br />
like drill rigs or excavators are usually necessary when investigating<br />
ground conditions, so we first need to create the roads so that this<br />
equipment can get to site – a process that can take weeks.”<br />
Daniell du Preez, engineering<br />
geologist at SRK Consulting.<br />
WIND FARMS<br />
On a wind farm, the turbines are usually some distance apart, so<br />
the travel distances even on a single site can be significant. Ground<br />
conditions on these projects are vital to fully understand and address,<br />
as wind turbines exert huge forces on their base and appropriately<br />
designed foundations must be expertly engineered. Wind turbine<br />
manufacturers have specific site investigation requirements which<br />
need to be followed in collaboration with the project developer,<br />
design engineer and EPC contractor. SRK designs a geotechnical<br />
investigation programme according to these specifications.<br />
“The geotechnical work will generally be approached in various<br />
phases – with the first phase being a preliminary investigation<br />
which includes a desktop overview and site investigation which<br />
Wind turbine foundation excavation being undertaken.<br />
involves drilling, test pitting, geophysical surveys, laboratory testing<br />
and reporting, while the second is a detailed or design investigation<br />
phase which involves infill testing and/or testing at each wind<br />
turbine including a continuous surface wave (CSW) test where<br />
applicable,” he says. “The next phase is when construction takes<br />
place, and where we assist with foundation inspections.”<br />
Drilling provides engineers with a geological profile to identify<br />
a competent founding horizon which is based on various geotechnical<br />
parameters such as load bearing, and settlement. If the foundation<br />
is in rock, the rock-quality designation, fracture frequency, joint<br />
spacings and other factors are also considered.<br />
So undeveloped are many of these sites that there is seldom<br />
easy access to water – which is necessary for various operational<br />
purposes including the drilling operations. Du Preez points out that<br />
collaboration with local farmers is often necessary to overcome the<br />
myriad practical challenges.<br />
Once the ground conditions are analysed and SRK Consulting gives<br />
its recommendations, final foundation designs can be confirmed.<br />
HIGHEST STANDARDS<br />
“As with all our work, SRK Consulting adheres to quality guidelines and<br />
practices of local and international relevance (Eurocode 7 – EN 1997),”<br />
he explains. “An important reference here is the Site Investigation<br />
Code of Practice South African Institution of Civil Engineering’s<br />
Geotechnical Division.”<br />
This code requires that, at development or feasibility phase, a<br />
geotechnical data test point must be gathered from the site of each<br />
wind turbine structure. As the project develops through to detailed<br />
design phase further test points might be required. The contractor<br />
can also use SRK Consulting professionals for turbine base inspections<br />
before the casting of concrete – to ensure that the correct levels,<br />
depths and other criteria have been achieved before formwork and<br />
concrete work begins.<br />
SOLAR PLANTS<br />
With South Africa’s high solar radiation index – a daily average of 220<br />
watts per square metre compared with 150 for parts of the USA and<br />
about 100 for Europe – photovoltaic (PV) installations are proving<br />
to be valuable contributors to the energy mix. The key geotechnical<br />
SRK Consulting has been extensively involved in geotechnical work on the<br />
country’s renewable energy projects.<br />
Typical foundation form work of a wind turbine base.<br />
elements of planning most of these PV projects relate to the stability<br />
of the posts holding the solar panels. Acknowledging that various<br />
installation methods exist; the most feasible method is generally<br />
the pile post method. This usually involves pre-drilling and piling<br />
to secure the posts, but it is not always that simple, Du Preez says.<br />
“Where possible, we advise clients to take a phased approach, as<br />
it is not always exactly clear in advance what the ground conditions<br />
will be,” he adds. “Rather than mobilise a full fleet of drilling equipment<br />
from the start, it is usually more cost effective to begin with a test<br />
pitting phase – as you might discover that there is bedrock or<br />
competent founding conditions at a shallow depth.”<br />
Ground conditions on these<br />
projects are vital to understanding<br />
the founding method.<br />
PHASES<br />
Du Preez therefore prefers going to site initially with an excavator<br />
(or backhoe) and Dynamic Probe Light (DPL) equipment to conduct<br />
test pits and DPLs across the site – down to three metres or earlier<br />
refusal – to find the suitable founding horizon. If a competent<br />
founding horizon is not encountered by these means, then a second<br />
phase can be initiated, using a Dynamic Probing Super Heavy<br />
(DPSH) rig and even a drill rig to conduct core drilling and standard<br />
penetration test (SPT). The DPSH rig and SPT testing is specially<br />
designed for testing the in-situ consistency of soil, to provide a<br />
measure or indication of the ground conditions ie establishing<br />
stiff or softer soil layers at depth.<br />
“Even if bedrock is not encountered, there may be a competent<br />
horizon at shallower depth – which may allow piling without any<br />
pre-drilling,” he says. “While it may still be worth applying DPSH<br />
technology to these conditions to determine skin friction and to<br />
complement the DPL results, this approach could save considerable<br />
unnecessary cost.”<br />
A pull-out test is generally considered as the last phase which is<br />
a valuable intervention to prove the skin friction and stiffness of<br />
the post. This data will assist the design engineer to ensure that<br />
the posts are well mounted and stable.<br />
BROADER RENEWABLE ENERGY SERVICES<br />
With its multi-disciplinary approach and range of inhouse skills,<br />
SRK Consulting’s work on renewable energy projects extends well<br />
beyond geotechnical work and includes environmental impact<br />
assessments (EIAs) and associated specialist studies, such as in-house<br />
groundwater, surface water, air quality and visual impact studies,<br />
as well as ecological, avifauna, aquatic ecology, noise, heritage and<br />
socio-economic studies.<br />
The latter assesses how a project affects local communities, aiming<br />
to minimise negative impacts and leverage the positive spin-off in<br />
terms of local job creation and skills development.<br />
*Article written by Daniell du Preez, Engineering Geologist, SRK Consulting.<br />
42 43
CIRCULARITY<br />
WASTE MANAGEMENT<br />
an economic-critical pillar to a greening economy<br />
SA’s economy is facing a magnitude of issues that are hampering both the prosperity of its people<br />
and the businesses that operate within it – and to say we are almost at the end of it, is truly<br />
an understatement – but is there light at the end of the tunnel?<br />
BY KATE STUBBS, INTERWASTE<br />
Waste can tackle energy crises but needs<br />
solid business, government and industry<br />
collaboration to see it to fruition.<br />
Not only are we in the throes of one of the worst power crises<br />
the country has seen but so too are we faced with a water<br />
crisis, a growing population putting pressure on already<br />
strained resources and climate concerns. However, not all is lost, and<br />
this should be a clear message to business and government.<br />
There are solutions that can drive sustainability within key sectors<br />
that serve South African consumers and the economy. It merely<br />
means looking deeper than the obvious solutions and finding ways to<br />
unilaterally work together to ensure such resolutions become viable<br />
and cost effective, and to ensure that we drive an understanding<br />
in communities as to the vital importance of such innovations in<br />
meeting South Africa’s challenges and being part of the change.<br />
For us, effective waste management and the ability to use waste in<br />
creating a circular economy provides a critical pillar to such innovation.<br />
Not only does proper waste management ensure that we can reuse<br />
and repurpose the growing mound of waste being generated but<br />
it ensures that, where waste cannot be repurposed/recycled, it can<br />
be, as a last resort, sent to compliant landfills for safe disposal.<br />
Without a doubt the waste sector plays a fundamental role in<br />
meeting the country’s Sustainable Development Goals (SDGs),<br />
tackling not one, but at least six of the 15 goals in total. Goals 6<br />
(safe water), 7 (clean energy), 13 (climate action) and 11 (sustainable<br />
cities) being the most prominent in this regard. In fact, it is an integral<br />
part of these goals – where, taking the circular-economy thinking<br />
into account, where waste reuse and repurposing is fundamental<br />
to meeting these objectives and addressing environmental impact<br />
and growing ESG targets globally.<br />
However, we have a conundrum where many people, businesses<br />
and some levels of government are under-informed about the<br />
potential of well-managed, compliant and innovative waste<br />
management solutions. The reality though, is that with a population<br />
of 61-million people growing by around 1% a year, and with each<br />
person generating around two kilograms of waste per day, we are<br />
heading towards a waste disaster if we do not start creating solutions<br />
and ensuring that all parties are educated as to why effective waste<br />
management is so important.<br />
With seven of the 13 major water systems in South Africa predicted<br />
to be in deficit by 2040 and the demand for water expected to exceed<br />
available supply by 2030, we need to find solutions. In our experience<br />
wastewater management can result in the redistribution of water<br />
into the environment for irrigation and dust suppression, as well as to<br />
replenish rivers and catchments in our water infrastructure networks.<br />
Furthermore, treated to the required standards, we have found<br />
that nearly all effluent can be recycled, if done properly, creating a<br />
strong solution for water sustainability and access – water that was<br />
previously not deemed safe for consumption. We need to create a<br />
much more diverse water mix, including groundwater and wastewater<br />
reuse, if we hope to protect this scarce resource and create a water<br />
supply that is safe and of consistent quality.<br />
Waste can tackle energy crises but needs solid business, government<br />
and industry collaboration to see it to fruition. If we consider the<br />
Just Energy Transition’s provision focus on achieving net-zero<br />
carbon emissions by 2050, exploring alternative sustainable options<br />
is key and if we consider that the global waste-to-energy market<br />
is expected to grow from USD28.4-billion in 2017, to almost<br />
USD43-billion in 2024, waste presents a large economic opportunity<br />
to establish new industries and/or revenue streams and meet<br />
SDG Goals.<br />
Converting waste to energy production occurs through three key<br />
processes: thermal, biological and physical. For each process, there<br />
are a variety of technologies available to convert different types<br />
of waste to energy such as electricity, steam or gas and so, there<br />
are multiple layers to meeting South Africa’s energy crisis – critical<br />
to government agendas currently.<br />
This reiterates the importance of not only alternative solutions<br />
to meeting South Africa’s challenges but indicates the fundamental<br />
role of effective, ethical and compliant waste management practices<br />
in driving South Africa’s climate agenda. The<br />
challenge is large but so are the solutions –<br />
we must create strong industry collaboration<br />
and investment projects that are supported by<br />
communities to truly change the status quo.<br />
Kate Stubbs, Director Business Development<br />
and Marketing, Interwaste.<br />
44
CIRCULARITY<br />
CIRCULARITY<br />
CIRCULAR ECONOMY<br />
The systemic glue to the Nexus<br />
Circular economy has become quite the buzzword globally as nations start<br />
adopting the primary principles, sometimes inadvertently, to achieve<br />
sustainability goals, climate adaptation/mitigation goals, the SDGs and<br />
ESG reporting.<br />
What’s a nexus? Essentially a nexus is the inextricable link between<br />
sectors that warrants their co-management to ensure the goals of<br />
each are achieved equally. Humans like to put things in boxes. Even<br />
more so in government, where boxes are upgraded to impenetrable<br />
armoured silos. When one thing does not work without the other,<br />
this tends to be a management disaster, but forbid the thought we<br />
should change the way we do things, else we might fix this country…<br />
The most common nexus discussions globally are those of the<br />
Water/Energy/Food or WEF nexus. Quite simply, we can’t grow food<br />
without water, and we need energy to move water to where it is<br />
supposed to be and to process food and get it to market. In their<br />
natural states, water (rain), energy (sunlight) and food (plants) all<br />
work in harmony, but mankind has somewhat disrupted this harmonic<br />
continuum. We cannot manage our way out of this disruption if we<br />
consider these sectors separately and thus the nexus.<br />
However, the deeper you go into this the more you realise that<br />
everything is connected. Like the topics in this <strong>Journal</strong> issue. As an<br />
example, one should not consider manufacturing without considering<br />
water, energy, transport, infrastructure, materials, etc. One can make<br />
the same assumptions with each of the topics in this issue, with some<br />
less obvious than the others.<br />
Construction is a vital component of a sustainable transition with<br />
the built environment collectively contributing some 39% of all<br />
carbon emissions driving global warming. Again, this is not just about<br />
the waste (eg builders’ rubble gaining a second life), but making a<br />
paradigm shift to new low-carbon materials, design and innovation.<br />
We need to embrace new materials and change our preference<br />
from energy-hungry conventional options like cement (solely<br />
responsible for 8% of global emissions!). “How?” you may ask, but<br />
fear not – most of the solutions are available already. We just need<br />
to change. Talking about the nexus, even construction has a nexus<br />
involving materials, waste, energy, water and logistics.<br />
New innovative materials can be lighter, cheaper, more thermally<br />
efficient, low-carbon, stronger and better in so many ways. We<br />
BY CHRIS WHYTE, ACEN*<br />
Unfortunately, Africa has been a bit slow on adopting the<br />
jargon, with many still believing this is just another fancy<br />
word for recycling and everyone in the waste management<br />
and recycling sectors proudly claiming their circular credentials.<br />
The reality is that the circular economy is far more than just a<br />
waste-focus. When asked to write a circular economy article for<br />
this issue of the <strong>Journal</strong> based on one of the six sectors to be<br />
highlighted, I didn’t know where to start.<br />
Chris Whyte.<br />
I could write reams on each sector, but my dilemma was that<br />
selecting one would be as disingenuous as lumping circular economy<br />
with waste management. “What about the Nexus?” I cried. “I want<br />
to do all of them!” To which the response from the editor was, “Pick<br />
one – and what’s a Nexus?”<br />
So, in my obstinate grumpiness I have decided to expand on the<br />
nexus and take my chances that the editor will indulge my will and<br />
let this one slip though, else se la vie…<br />
Everything is connected<br />
as nature intended, and<br />
nature is good.<br />
46<br />
47
CIRCULARITY<br />
need to disrupt the vested interests in the conventional materials<br />
sector, else drag them kicking and screaming into the 21st century.<br />
Sometimes it is not just the obvious. Science, technology and<br />
innovation are leading the way. One of the projects I am working<br />
on now is using innovation to take one country’s waste from the<br />
construction sector to manufacture mineral-based replacements to<br />
steel. This offsets imports of a material that has one of the highest<br />
carbon footprints; using local waste that currently costs a fortune to<br />
dump; at less than half the price and a fifth of the weight; that does<br />
not have the same corrosive relationship to concrete that limits the<br />
lifespan of buildings.<br />
Renewable energy is another topic of this issue and mooted as<br />
the saviour of the planet. Before we all jump on this bandwagon,<br />
we also need to understand the nexus and Life Cycle Analysis.<br />
Renewable energy has its own embodied energy (the materials and<br />
energy needed to create the infrastructure) and has its own nexus<br />
with energy, water, materials and land. Still way better than fossil<br />
fuels from an impact perspective post-construction, but to make<br />
it truly circular we are also going to have to embrace end-of-life<br />
options for all those old solar panels, batteries and wind turbines<br />
to bring these materials back into circulation.<br />
Without this strategy, all we are going to do is fuel the mining<br />
sector to extract more virgin materials from the earth. Already we<br />
are seeing policy directives from the global North around “critical<br />
raw materials” that we are running out of rapidly and fuelling<br />
international tensions. Circularity poses a solution to this under<br />
the option of Materials as a Service, dubbed MaaS. Effectively, this<br />
is a strategy that offers a future safety net for manufacturers in<br />
dealing with materials sourcing issues, where material suppliers<br />
offer manufacturers the use of materials through services while<br />
retaining ownership. This makes sense in that if the supplier owns<br />
the material, the manufacturer will ensure design that promotes<br />
longevity and ultimate return of the facility to ensure the materials<br />
can be recycled and used again. It gets complicated but makes so<br />
much sense in ensuring that no materials are lost as we see in our<br />
current throw-away mindset.<br />
You don’t own your cell phone – you rent the use of it from the<br />
manufacturer who in turn is borrowing the materials from the supplier<br />
who retains ownership of that. This could change the world in so<br />
many positive ways and take the burden off the consumer who pays<br />
a fortune for the latest cell phone only to throw it away in two years<br />
when the next best comes out…<br />
It’s a fresh new world full of exciting opportunities – we just need<br />
to embrace it and understand the nexus. Everything is connected<br />
as nature intended, and nature is good.<br />
*African Circular <strong>Economy</strong> Network<br />
Water (rain), energy (sunlight) and<br />
food (plants) all work in harmony,<br />
but mankind has somewhat disrupted<br />
this harmonic continuum.<br />
48
WASTE<br />
PLASTICS SA<br />
CELEBRATES 27 TH YEAR OF INTERNATIONAL<br />
COASTAL CLEAN-UP DAY<br />
South Africa is not only known for its stunning coastlines but also for its commitment to<br />
preserving them. Plastics SA’s annual Clean-Up & Recycle SA Week, which will take place<br />
this year from 11-16 September 2023, plays a pivotal role in promoting environmental<br />
sustainability and combating the waste crisis plaguing our beautiful country.<br />
SA is proud to announce its 27th year of coordinating<br />
South Africa’s active participation in the International<br />
“Plastics<br />
Coastal Clean-up Day (ICC), taking place at beaches across<br />
the country and around the world on Saturday, 16 September 2023,<br />
which will also be World Clean-Up Day. This year the Clean-Up &<br />
Recycle SA Week will again feature numerous clean-ups on beaches,<br />
at rivers, water sources and in communities and neighbourhoods<br />
around the country.<br />
Highlights of the week include National River Clean-up Day on<br />
Wednesday, 13 September and National Recycling Day SA on Friday, 15<br />
September. The culmination of the week’s activities will be on Saturday,<br />
16 September, when South Africans from all walks of life come together<br />
for International Coastal Clean-up Day and World Clean-up Day,” says<br />
Douw Steyn, sustainability director at Plastics SA.<br />
To further emphasise their dedication and aid in clean-up activities,<br />
Plastics SA has increased the number of yellow refuse bags to an<br />
impressive 700 000, ensuring that the industry and coordinators of<br />
clean-ups can make a substantial impact on cleaning up our beaches<br />
and rivers. Cleanup champions in Gauteng and Mpumalanga will also<br />
be recognised and rewarded with essential clean-up tools ie of bags,<br />
gumboots, gloves, rakes and other equipment needed to clean the<br />
roadsides and rivers on River Clean-up Day.<br />
“South Africa is facing a waste crisis, and every citizen can make a<br />
difference to reduce the amount of litter that pollutes our environment<br />
or ends up in landfill. As far as possible, we try to ensure that all the<br />
clean-ups that we support are audited and that volunteers register<br />
online on our www.cleanupandrecycle.co.za website. This allows us<br />
to build a detailed snapshot of the waste landscape in the country, the<br />
number of people who participated and how we as an industry can<br />
respond and provide support to community initiatives,” Douw says.<br />
“During the entire month of September, Plastics SA with the support<br />
of all packaging streams, Producer Responsibility Organisations (PROs),<br />
various sponsors, businesses and industries, as well as national and<br />
local government entities, community organisations and municipalities<br />
will be conducting clean-ups in an effort to raise awareness about<br />
the importance of effective waste management and recycling. This<br />
collective effort underscores the importance of collaborative action in<br />
addressing environmental challenges. We encourage South Africans<br />
from all walks of life to make a difference where they work, live, learn<br />
or play this September by participating or coordinating a clean-up to<br />
create a cleaner, greener South Africa. Together, we can make a lasting<br />
difference!” Douw concludes.<br />
For more information about Plastics SA and the Clean-Up &<br />
Recycle SA Week, please visit www.plasticsinfo.co.za or<br />
www.cleanupandrecycle.co.za.<br />
We encourage South<br />
Africans from all walks of<br />
life to make a difference.<br />
C<br />
M<br />
Y<br />
CM<br />
MY<br />
CY<br />
CMY<br />
K<br />
50
WATER<br />
WATER<br />
South Africa’s<br />
WATER UPDATE<br />
In this edition, we delve into some of the specifics arising out of South Africa’s dire water situation.<br />
While there is a myriad of negatives, there is also an upside with many multinationals considering<br />
regional offices in anticipation of the Water and Sanitation Masterplan implementation.<br />
OPINION PIECE BY BENOÎT LE ROY, SA WATER CHAMBER<br />
Let’s first look at municipal capex budgets for the next three<br />
years. The metropolitan municipalities are a good starting<br />
point as there are seven of the eight included in this narrative,<br />
representing some 24-million citizens, around 40% of South<br />
Africa’s population.<br />
Metropolitan<br />
municipality<br />
Population Capex Budget Rand per<br />
capita<br />
per annum<br />
Johannesburg 6.2-million R22-billion R1.2K<br />
City of Cape Town 4.9-million R43-billion R2.9K<br />
Nelson Mandela Bay 1.3-million R1.3-billion R0.3K<br />
Buffalo City 0.7-million R3-billion R1.4K<br />
Ethekwini 3.2-million R19-billion R1.9K<br />
Ekurhuleni 4.1-million R8-billion R0.7K<br />
Tshwane 2.9-million R7-billion R0.8K<br />
Total 23.3-million R103.3-billion R1.5K/capita<br />
In South Africa’s metropolitans, there is a wide range per capita<br />
capex spend annually (from R800 to R2 900) with the largest metro,<br />
City of Johannesburg, spending below the metropolitan average by<br />
20%, which we can see is affecting service delivery negatively with<br />
ongoing reports of major water outages. This picture does not bode<br />
well for our metropolitans and it’s clear we need to up the spend<br />
and its efficacy in implementation considerably more in most of<br />
the metropolitan municipalities to achieve water security for all.<br />
The second topic gaining major attention in South Africa is the<br />
subject of decentralised and package plants. South Africa started<br />
on this journey over two decades ago when the new municipal<br />
demarcations resulted in major underserviced regions being<br />
included in the new cities and towns proclaimed where these<br />
municipalities simply could not provide the traditional centralised<br />
water and sanitation services.<br />
A range of locally and internationally developed package plants<br />
for water and sewage treatment was rapidly rolled out by mostly<br />
local EPCs and government issued guidelines to try and assist<br />
municipalities in managing this process. The success rates were<br />
not impressive as municipalities failed to govern the rollout and<br />
enforce operational compliance resulting in many still resisting<br />
this approach.<br />
Decentralised approaches in many sectors have been made very<br />
competitive with the miniaturisation and scale of deployment. In the<br />
water sector, this is not as developed and can often result in higher<br />
costs of ownership when comparing apples with apples.<br />
However, one major driver recently is to lower the energy needed<br />
to convey sewage for example due to high energy prices and to<br />
enable the development of housing and commercial-industrial<br />
estates where the current municipalities have inadequate capacity<br />
to take on these additional loads. This is generally the case in all<br />
South African metropolitans. So, the technology exists, the need is<br />
dire and with heightened governance we should be able to better<br />
meet our development needs with decentralised solutions. There<br />
is no choice in the real world.<br />
We are witnessing the rapid deregulation of electricity generation<br />
in South Africa purely due to Eskom’s inability to keep pace. It is my<br />
contention that we will see a similar situation unfold in the water<br />
and sanitation services sector where this needs to be managed<br />
aptly as we are dealing with society’s health and wellbeing. Local<br />
government generally lacks the bylaws to enable this process and<br />
will have to step up to the plate now to ensure a well-managed<br />
rollout process.<br />
The digitisation (so the adaptation of a system, process, etc<br />
to be operated with the use of computers and the Internet) is a<br />
well-established means of operating and managing our water and<br />
sanitation infrastructure in South Africa. Digitalisation, however, is<br />
the advance use of digital data to manage processes and decisionmaking<br />
using smart analytics. Smart analytics are derived from the<br />
digital operations of assets and systems by extracting, normalising,<br />
cleansing and modelling data that can inform business intelligence<br />
via reports, real-time dashboards and alerts with predictive,<br />
optimisation and anomaly detection capabilities usually using<br />
machine learning and Artificial Intelligence platforms. These are<br />
powerful tools to enable the real-time management of water assets<br />
and the optimisation of the assets before maintaining, rejuvenating<br />
and replacing them prematurely but timeously.<br />
Like all new developments, change management is key in rolling<br />
out these digital solutions. Our water sector lags global momentum,<br />
that is itself lagging other sectors, and must find ways of expediting<br />
the adoption of new management practices given the lack of water<br />
security and technical skills available.<br />
An example of where digitalisation is exceptional in inculcating<br />
water security is the live management of water distribution networks<br />
where non-revenue water is rampant, with South Africa close to<br />
It’s clear we need to up the spend<br />
and its efficacy in implementation.<br />
50% and the global average below 25%. Using digital tools to<br />
link physical assets with actual demand and managing district<br />
metering areas with pressure demand management, one can<br />
optimise the required system pressures live and reduce leaks that<br />
are prevalent in the older bulk mains. Sophisticated algorithms can<br />
assist in locating imminent pipe bursts and hence limit losses and<br />
improve preventative asset management.<br />
Desalination receives mixed reviews mostly because of not being<br />
well understood as most do not appreciate the infrastructure<br />
complexities in producing water until their taps run dry. There are<br />
three main myths about desalination:<br />
1. It’s expensive. It is certainly true that five decades ago desalination<br />
was in its infancy with mostly thermal desalination plants used<br />
in arid areas with no other source of water except for seawater.<br />
The prices ranged around USD10/m³ and coming down to less<br />
than USD1/m³ in 2010. The advent of reverse osmosis membranes<br />
has resulted in the latest contracted facilities in the MENA region<br />
being contracted at some USD0.30/m³ with their target for 2025<br />
at USD0.20/m³.<br />
2. It’s energy intensive. Thermal desalination used around<br />
15kWh/m³ decades ago with seawater reverse osmosis now<br />
using 2.5kWh/m³ and getting close to the theoretical amount of<br />
energy required. Renewable energy to drive these desalination<br />
facilities is now the new norm in recent projects and gaining<br />
traction resulting in lowering the carbon footprint and costs of<br />
the process.<br />
3. It’s environmentally destructive. Environmental impacts are<br />
very localised mostly in the stagnant Gulf region and not a factor in<br />
the open oceans where dispersion technologies are very effective<br />
coupled with ocean currents. The mining of brine streams is also<br />
gaining momentum as are advanced processes such as forward<br />
osmosis and membrane distillation that improve water yields<br />
in parallel.<br />
Desalination is a climate change and rainfall independent way of<br />
providing affordable high-quality water from an infinite resource<br />
265 days a year and cannot be ignored any further for South Africa’s<br />
coastal economies. The Water and Sanitation Masterplan of 2018<br />
refers to the deployment of at least 1 600MGLD desalination this<br />
decade. We need to get past the talk shops!<br />
52 53
ENERGY<br />
THE PUSH<br />
for renewable energy<br />
INDUSTRIALISATION<br />
Kangnas Wind Farm.<br />
Wind association gets behind the SAREM<br />
SAWEA has put its voice of support behind the release of the draft SAREM, led by the Department<br />
of Mineral Resources and Energy and the Department of Trade, Industry and Competition.<br />
BY SAWEA*<br />
The product of a rigorous process, including input from SAWEA’s<br />
Manufacturing and Local Content Working Groups, stakeholders<br />
have been invited to comment on the draft South African<br />
Renewable Energy Masterplan (SAREM) document.<br />
“Together with the broader renewable energy industry, we welcome<br />
this framework, as it supports our advocacy for sector industrialisation,<br />
through increased local manufacturing. As such, we view the key pillars<br />
outlined by the document as effective interventions to create a better<br />
environment for local manufacturing, which will no doubt result in<br />
increased employment opportunities, investment, social inclusion<br />
and acceleration of our industry’s participation in a global wind supply<br />
chain,” says Niveshen Govender, CEO of SAWEA.<br />
Designed to stimulate the industrial development of renewable<br />
energy and battery storage value chains and contribute to the broader<br />
development needs of the country, the SAREM clearly lays out a<br />
framework in which opportunities linked to the booming market for<br />
renewable energy can be accessed, both domestically and globally.<br />
The four key pillars of SAREM focus on supporting market demand;<br />
driving industrial development; fostering inclusive development<br />
and building local capabilities.<br />
“Along with setting clear local content targets for future private and<br />
public procurement following a consultation process, the SAREM’s<br />
focus on driving industrial development, outlines existing public<br />
sector programmes and policy support with localisation objectives.<br />
Furthermore, the plan outlines interventions to attract investment and<br />
aligns to the different national and international policies of the various<br />
government department stakeholders as well as international funding<br />
and trade institutions,” explains Govender.<br />
As noted by SAWEA, despite initial localisation targets reflected in<br />
the 2022 draft, the SAREM has been revised to exclude specific targets<br />
at this time, which will be obtained through an inclusive negotiation<br />
process between the social partners.<br />
“Fostering inclusive development” refers to the sectors transformation<br />
objectives, and relates to both public and private procurement. Clear<br />
transformation objectives are to be established by developing and<br />
implementing a sector-specific BBBEE scorecard with targets to be<br />
achieved upon the conclusion of the negotiation process. Local and<br />
READ REPORT<br />
emerging suppliers will be supported through the development of<br />
a transformation fund.<br />
“While the SAREM draft provides a conducive environment<br />
for localisation, responsibility remains with manufacturers to<br />
negotiate the investment and associated targets. Communities are<br />
to be involved through directing renewable energy and storage<br />
activities, linked to Just Transition hotspots, indicating that public<br />
procurement rounds could be launched in these areas. In support of this,<br />
industrial parks or Special Economic Zones, such as the Atlantis green<br />
economy hub, may further be established in these areas to support<br />
employment and skills development,” adds Govender.<br />
Govender concludes, “An industrialisation agenda, which is rooted<br />
in robust local manufacturing capabilities, will allow the wind power<br />
sector to deliver the necessary new generation power needed for the<br />
country to thrive. To this end, the masterplan provides a clear framework,<br />
which is necessary for both local and global investors, seeking an<br />
investment destination to manufacture renewable and new generation<br />
technology components, as part of the global supply chain. It is also<br />
worth reiterating that in relation to the REIPPPP, a stable pipeline<br />
with foreseeable and predictable timelines between procurement<br />
rounds, remains necessary to attract significant investments in order<br />
to rebuild the manufacturing sector and create a local market based<br />
on its competitiveness and value-add.”<br />
*South African Wind Energy Association<br />
Niveshen Govender,<br />
CEO of SAWEA.<br />
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54
ENQUIRIES<br />
Contact Alexis Knipe: alexis@greeneconomy.media<br />
www.greeneconomy.media