Green Economy Journal Issue 59

NEWS & SNIPPETS
ENERGY ACTION PROGRESS
President Ramaphosa recently announced that government
has made significant progress in several areas of generating
new energy, such as building new generation capacity and
transforming the industry through regulatory reforms.
The president said that by stabilising Eskom’s power stations’
performance and reducing demand during the winter, a worstcase
scenario was averted, despite ongoing loadshedding.
According to the president, Eskom has unlocked almost 400MW
from companies with spare capacity of power added to the grid
and the government is in the process of adding another 600MW.
“We are fast-tracking the procurement of new generation
capacity from renewables, gas and battery storage. Later this year
the first three projects from the emergency power programme
are expected to connect to the grid,” he stated.
The president said it is encouraging to see more municipalities
allowing their customers to feed surplus electricity into the grid
when they have excess power, which will encourage businesses
to invest in alternative energy.
CROSS-BORDER PROCUREMENT
NERSA says it agrees with the draft ministerial determination to
procure 1 000MW of new generation capacity from the cross-border
procurement agreement.
“New generation capacity must be procured or purchased to contribute
towards energy security and accordingly, up to 1 000MW should be procured
from the SADC region from a range of technologies/sources,” NERSA said.
“The range of energy producers from the region will either be utilities from
the host countries or independent power producers that are legally operating
within the host countries.”
The energy capacity shall be procured by Eskom Holdings SOC Ltd and shall
entail the procurement of electricity through one or more processes that are
fair, equitable, transparent and cost-effective, and the form of which shall be
determined by Eskom; and the conclusion of Power Purchase Agreements in
respect of the electricity, for which the duration will be agreed upon between
Eskom and the energy producers from the region.
SAnews.gov.za
EASING THE IMPACT OF LOADSHEDDING
Trade, Industry and Competition Minister Ebrahim Patel has
launched the Energy One Stop Shop and Energy Resilience
Fund. This is part of the Energy Mitigation Strategy through
the National Energy Crisis Committee.
The Energy One Stop Shop was developed to address a key
constraint that energy developers face, namely that the many
regulatory and other measures that need to be complied with, can
and do slow down approval of energy supply projects.
“While the presidency is exploring ways to simplify these
processes, we have seen that having a dedicated resource available
to the private sector, to address blockages, has worked in other
parts of the economy.”
Patel said government is committed to fostering a resilient
business environment and accelerating private-sector investment
in electricity generation to secure a stable energy future.
To contribute towards easing the impacts of loadshedding, the
dtic, Industrial Development Corporation (IDC) and the National
Empowerment Fund (NEF) have established a blended funding
facility, the Energy Resilience Funds. These will support any
business adversely affected by the energy crisis across all sectors
of the economy.
SA’s DEDICATED GREEN HYDROGEN FUND
A Heads of Agreement has been concluded with
the intention to launch a “SA-H2 Fund” (SA-H2).
SA-H2 is an innovative blended finance fund,
that will facilitate the development of a green
hydrogen sector and circular economy in South
Africa. The Fund is supported by Climate Fund
Managers and Invest International B.V. (II) of the
Netherlands, Sanlam Limited, the Development Bank
of Southern Africa and the Industrial Development Corporation of
South Africa (IDC), in collaboration with other strategic partners.
The SA-H2 Fund initiative will aim to secure US$1-billion in funding,
to be raised directly in South Africa or indirectly via other channels.
Its focus will be to fast-track the mobilisation of funding towards
the development and construction of large-scale green hydrogen
infrastructure assets across South Africa.
How SA-H2 will work
“Succeeding in a just transition to cleaner energy rests on our ability
to create a viable marketplace that attracts and mobilises public and
private capital, and this fund will do just that. We will create and use
innovative blended finance architecture and structuring to build a
substantial pipeline of green hydrogen projects in South Africa. This
will give private sector developers access to risk capital from an early
stage of development, throughout construction and into operations,”
says Catherine Koffman, group executive: project preparation, DBSA.
UNLOCKING SA’s PROSPERITY
The African Continental Free Trade Area (AfCFTA) holds the power
to unleash an economic revolution – ushering in unparalleled
progress and prosperity like never before. For South Africa
and for most of the continent, a key aspect for reaping the full
benefits of AfCFTA and securing a brighter future lies in moving
quickly to ensure a stable energy supply.
AfCFTA, phase 1, is seeing incremental implementation despite
some key unresolved negotiations on rules of origin and tariff
schedules, has the potential to become an unparalleled titan of
free trade agreements. It seeks to gradually eliminate tariffs on
90% of goods and reduce trade barriers. The UN Conference of
Trade and Development estimates that the agreement could
boost intra-African trade by about 33% and cut the continent’s
trade deficit by 51%.
To truly unlock the benefits of AfCFTA, the whole continent
must make a comprehensive energy strategy top priority. Solving
the energy crisis cannot be achieved in isolation; it requires
collaboration between governments, private sector entities and
international partners.
It is heartening to note that the Presidential Climate Commission
has unequivocally underscored the urgency of securing a sustainable
NEWS & SNIPPETS
“Further, this fund is a significant addition to national efforts to
leverage our existing renewable energy infrastructure. With a national
target of US$250-billion investment in green hydrogen by 2050,
this sector is projected to amplify the development impact of the
renewable energy industry.”
Key role for the Fund
Joost Oorthuizen, CEO of Invest International: “SA-H2 is a showcase
of how public, private, international and local parties can join forces
to create a catalytic effect on the development of an exciting new
sector. Green hydrogen projects in South Africa can contribute to
local sustainable development and support the energy transition
locally as well as in export markets. While deploying its funds, Invest
International makes efforts to demonstrate strong environmental and
social commitment, strive for local impact and inclusive growth, and
combine the expertise of Dutch and South African businesses.”
Re-industrialisation in South Africa
Joanne Bate, COO, IDC says: “The development of this new industry
will support the longer-term energy security priority and the just
energy transition contribution will proactively address socioeconomic
development. South Africa will position itself as a
globally competitive player in this industry. More importantly, green
hydrogen will enable the local decarbonisation of hard-to-abate
industrial sectors.”
energy supply. It has stated that energy planning should consider
climate change mitigation due to the magnitude of climate risk.
The commission also emphasised that electricity planning should
be based on least-cost pathways. All reviewed models demonstrated
that the least cost energy model would involve investments in variable
renewable energy (wind and solar), storage (batteries and pumped
hydro) and peaking support.
Government must urgently expand renewable energy production
and upgrade the grid infrastructure. To attract private investment,
policy frameworks must be streamlined.
We must prioritise developing the capacity of the energy
sector. By nurturing a skilled workforce, we can accelerate project
implementation. Effective partnerships with educational institutions
and industry stakeholders are crucial to address the skills gap.
The effective implementation of AfCFTA will streamline trade
regulations, customs procedures and remove barriers. Through
regional cooperation and market integration, it can enable economies
of scale, attracting investors to tap into Africa’s expanding energy
demand. This could fuel more energy sector investments, establishing
Africa as an energy secure region and an industrial powerhouse.
By Wrenelle Stander, CEO of Wesgro
GRID CAPACITY ALLOCATION RULES
SAWEA has noted the court’s ruling to dismiss the urgent interdict in relation to the interim grid capacity allocation rules (IGCAR).
The ruling will enable the industry to deliver much needed new generation capacity, as the state utility is able to grant the required
budget quotes in line with the IGCAR.
The process to allocate grid access impacts projects differently, however, as it currently stand the IGCAR will allow the urgent deployment
of new generation. As such, and in line with the ruling, SAWEA has reaffirmed its commitment to working with all key stakeholders to
accelerate the connection of shovel-ready projects with a view to alleviating the energy crisis.
SAWEA encourages progressive industry discussions with the System Operator regarding the optimisation of the grid including
the allocation of grid capacity, in line with the industry’s objective to develop a favourable regulatory environment for the rollout
of renewable energy. As an association advocating for the advancement of the wind energy sector, SAWEA continues constructive
engagement with all key stakeholders, including the presidency, NECOM, and Eskom to find solutions that support the construction or
expansion of utility scale wind projects to help solve the country’s energy crisis.
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