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Projects and Energy Weekly Snippets

22 May 2017

South Africa

Weekly projects and energy updates in South Africa

Synposis of energy minister, Mmamoloko Kubayi budget speech

The energy minister reconfirmed that government will proceed with the signing of new nuclear power agreements and submit them to parliament within reasonable time.

Following the report on Strategic Fuel Fund (SFF) and challenges at PetroSA, the Department of Energy, in the coming months will be embarking on restructuring of the CEF Group and creating a model that makes it easy for accountability and ensures the entity operates efficiently and in a professional manner.

The IPP programme’s future being critical to developmental goals, the IPP office we will be moved to operate under the CEF Group as part of the restructuring process announced earlier.

The Department will be concluding its work within this financial year on IEP and IRP to ensure that there is policy certainty. These energy plans will outline how it intends to meet its energy policy objectives, including increasing energy access, energy efficiency.

The solar water heater rollout programme in various municipalities will be continued.

Gas is an integral part the country's energy mix, notwithstanding that in the short to medium term it does not have access to the indigenous gas promised by the shale gas exploitation programme.

In order to kick-start the gas programme, power generation has been identified as the single biggest demand sector that would also meet the energy diversification objectives of the Integrated Resource Plan. Other demand sectors targeted under the gas programme include industrial, residential, transportation and chemicals.

Numerous municipalities are already approving the installation of rooftop photovoltaic systems that generate power into their local distribution systems. In order to provide for orderly development, the embedded generation licensing framework will be promulgated this year. While this will address the proliferation of rooftop solar technology installations, the regulations will also cover other distributed generation technologies with a proposed cap of 10 MW per site.

Extract from Sabinet, 19 May 2017

Ghana signed for more than needed power

The government of Ghana is caught in a situation whereby it will have excess capacity of energy; however it cannot distribute that power due to low demand.

Local radio station Peace FM reported that the government is unable to cancel eight Power Purchase Agreements deemed excess capacity, because the financial implications range between US$400 million and US$500 million. 

Deputy Minister for Energy, Dr Mohammed Amin Adam, explained that if all agreements signed by the previous government are executed, the country would be saddled with 5800 MW of excess capacity, which “we will not be using over the next five years but which we have to pay for”.

ESI Africa, 18 May 2017

SAREC again defends renewable energy programme in light of proposed coal station closures

The South African Renewable Energy Council (SAREC) on Thursday said that Eskom’s justifying the proposed closure of some its coal-fired power plants in Mpumalanga, as being the result of signing power purchase agreements for new renewable energy projects, is misleading.

“Coal plants have a limited life, as do the mines that feed them. Eskom’s generation licence requires these plants to be decommissioned as they reach the end of their design life and become too expensive to operate and maintain, so it is completely misleading to blame renewables for this natural process,” SAREC chairperson Brenda Martin stated.

Further, the council argued that while the job losses related to coal-fired power station closures were not insignificant, Eskom had a long-standing duty to address such losses through its planning, adding that the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) had created over 26 000 jobs in the last four years.

Engineering News, 18 May 2017

Certainty needed to drive energy projects in Africa

Private sector players have called on African governments to be reliable and predictable in their energy policies and programmes.

"Investors want to know that the rules won’t change in the middle of a project,” Power Africa coordinator Andrew Herscowitz told delegates at Africa Utility Week on Tuesday.

He said the main objective was to take an energy deal to its conclusion. Many projects are abandoned before they reach the end point.

Engineering News, 16 May 2017

Now Eskom says Molefe was retrenched

Eskom Pension and Provident Fund (EPPF) CE Sibusiso Luthuli has justified the fund’s decision to grant Eskom CE Brian Molefe a ZAR30 million pension payout on grounds of early retirement on the basis of a rule pertaining to retrenchment.

The decision, which has since been revoked, would have equated to paying out Molefe for the remainder of his five-year contract, of which only 18 months had been worked when he announced his voluntary resignation.

Public Enterprises Minister Lynne Brown said last week she disapproved of the payment and decided that returning Molefe to his post at Eskom would be cheaper for the fiscus than the pension payment.

Business Day, 17 May 2017

Absence of Eskom CEO rattles opening of African Utility Week

Despite great anticipation ahead of his address, reinstated Eskom CEO Brian Molefe did not open the annual African Utility Week, in Cape Town, as planned.

The CEO was scheduled to be the keynote speaker at the opening plenary, attended by several thousand energy and water experts, but pulled out just before the gathering.

Engineering News, 16 May 2017

South Africa: Kubayi decision on nuclear court ruling

The South African Minister of Energy, Mmamoloko Kubayi, has decided not to appeal the decision of the Western Cape High Court on the nuclear procurement matter.

Kubayi stressed this announcement in a formal media release over the weekend.

ESI Africa, 15 May 2017

The above reflects a summary of certain news articles published during the preceding week. It is not an expression of opinion in respect of each matter, nor may it be considered as a disclosure of advice by any employee of Hogan Lovells.

For more information contact Charles Marais or Mahashini Govender.

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