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This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation A new International Energy Agency (IEA) report describes the sharp decline in critical mineral prices over the past year as a double-edged sword, cautioning that, while it has been a boon for clean energy deployment and affordability, it is a bane for critical mineral investment and diversification. The 'Global Critical Minerals Outlook 2024' highlights that, following two years of dramatic increases, the prices of critical minerals fell steeply in 2023, returning to levels last seen before the pandemic. "Materials used to make batteries saw particularly significant decreases, with the price of lithium dropping by 75% and the prices of cobalt, nickel and graphite falling by between 30% and 45% - helping drive battery prices 14% lower." As a result of falling prices, the market size for key energy transition minerals contracted by 10% to $325-billion in 2023, despite demand growth. The report shows that investment in critical minerals mining grew by 10% and exploration spending rose by 15%, but was slower than in 2022. In addition, investment in certain minerals, notably copper and lithium, was falling short of what was required for a transition to a net-zero energy system. Detailed project-by-project analysis in the report suggests that announced projects are sufficient to meet only 70% of copper and 50% of lithium requirements in 2035 in a scenario in which countries worldwide meet their national climate goals. Markets for other minerals look more balanced, the reports states, if projects come through as scheduled. "Today's well-supplied market may not be a good guide for the future," the IEA cautions, with demand for critical minerals set to grow strongly in all IEA scenarios, driven by electric vehicles, wind turbines, solar panels and other clean energy technologies. "Today's combined market size of key energy transition minerals is set to more than double to $770-billion by 2040 in a pathway to net zero emissions by mid-century." The IEA also notes that announced projects do not change the high geographical concentration of supply, with China projected to retain a very strong position in the refining and processing sector. The report follows an announcement by US President Joe Biden of a ramp-up in tariffs on Chinese-made electric cars, solar panels, batteries, battery components and parts, and some critical minerals, justified on the basis that American workers were being penalised by anticompetitive and unfair practices from China. However, several critical minerals where China dominates supply were excluded. The IEA report suggests that lithium and copper are more exposed to supply and volume risks, whereas graphite, cobalt, rare earths and nickel face more substantial geopolitical risks. The report also urges a stepping up in recycling efforts to ease potential strains on supply. "Some $800-billion of investment in mining is required between now and 2040 to get on track for a 1.5 °C scenario. "Without the strong uptake of recycling and reuse, mining capital requirements would need to be one-third higher."

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Council of Provinces (NCOP) has approved the Electricity Regulation Amendment (ERA) Bill, which has far-reaching implications for the future structure and operation of an electricity supply industry that has hitherto been dominated by Eskom. The Bill received support from all provinces besides the Free State, which lacked a mandate to vote, and the Western Cape, which argued that there had been insufficient time for provinces to consult their residents on the contents of the Bill. The ERA Bill was approved by the National Assembly on March 14 and, following the approval of the NCOP, will be sent to the President for signing. In a media release issued by Parliament following the NCOP vote it was stated that the legislation aimed to provide for additional electricity generation capacity and infrastructure, establish the duties, powers and functions of the Transmission System Operator (TSO), and provide for an open-market platform that allowed for competitive electricity trading. "It further aims to amend the regulatory framework for the electricity industry in response to prevailing conditions in the South African electricity power system and the Department of Public Enterprises' Roadmap for Eskom in a Reformed Electricity Supply Industry of 2019," the statement added. Parliament added that the Bill would now be sent to the President for assent and it had been widely suggested, but not yet confirmed, that President Cyril Ramaphosa would sign the legislation ahead of the May 29 elections. Unlike the controversial National Health Insurance Bill, which Ramaphosa signed at a Union Buildings ceremony on May 15, the ERA has the backing of business, which has called for its urgent passage as part of initiatives and reforms that it views to be necessary to end loadshedding and place the electricity sector on a more sustainable footing. The creation of the TSO - which will be located within the National Transmission Company South Africa (NTCSA), currently being separated as an independent Eskom division and which already has its own board - is regarded as a key feature of the amendment. While the NTCSA is expected to begin trade by July, the ERA provides a five-year period for the integration of the roles and functions of the TSO, which will oversee the market code required to replace the vertically integrated industry structure with a multimarket framework. A draft market code is currently circulating for public comment before September 30. The consulted version of the code is expected to be submitted to the National Energy Regulator in November for further deliberation and consultation ahead approval, with the actual code expected to come into force only from April 2026. The other Bills passed by the NCOP on May 16 were the National Water Resources Infrastructure Agency Bill, the Marine Pollution (Prevention of Pollution from Ships) Amendment Bill, the Transport Appeal Tribunal Amendment Bill, and the Plant Health (Phytosanitary) Bill.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. President Cyril Ramaphosa acknowledged the fear that his signing of the National Health Insurance (NHI) Bill into law had generated during a signing ceremony held at the Union Buildings on Wednesday. However, he described the NHI as an opportunity to break with the prevailing inequality in the health system and called on stakeholders to work with government to make it work. "We are a country that has been built on dialogue and partnership, on working together to overcome differences in pursuit of a better life for all its people. Let us work together, in a spirit of cooperation and solidarity, to make the NHI work," Ramaphosa appealed. He was speaking, however, against the backdrop of strenuous opposition to the legislation by healthcare practitioners, funders, business, civil society groupings, some trade unions, as well as opposition political parties and an expectation that the Act would be challenged legally. Nevertheless, Ramaphosa described the signing - which he had signalled his intention to carry out on several occasions, including while on the campaign trail ahead of what is set to be a highly competitive election on May 29 - as a "pivotal moment in the transformation of our country". He likened the current anxiety to fears expressed ahead of the transition to democracy and the introduction of the right to strike and argued that those fears had proved to be unfounded. "By putting in place a system that ensures equal access to health care regardless of a person's social and economic circumstances, the NHI takes a bold stride towards a society where no individual must bear an untenable financial burden while seeking medical attention." Despite grave concerns about the implications of the NHI for taxpayers, as well as the potential for corruption, the President did not provide details on how the scheme would be funded. He said only that the NHI would be funded through a comprehensive strategy that would combine various financial resources, including additional funding and reallocating funds already in the health system. It has been estimated that the NHI would require yearly funding of at least R400-billion. "The financial hurdles facing the NHI can be navigated with careful planning, strategic resource allocation and a steadfast commitment to achieving equity," the President added. Speaking from the same podium, Health Minister Dr Joe Phaahla emphasised that the yet-to-be-established NHI Fund, which would procure services from public and private service providers, would be governed by a board made up of "people of good standing". Both Phaahla and Ramaphosa also underlined that implementation would be pursued on a phased basis and would not be implemented as a single event. "Following the signing of this Bill, we will be establishing the systems and putting in place the necessary governance structures to implement the NHI based on the primary health care approach," Ramaphosa said. They also denied that the legislation has been rushed and that its passage had failed to follow the correct procedure, arguing that it had undergone thorough consultations ahead of the parliamentary process, which had itself endured for five years. "What we need to remember is that South Africa is a constitutional democracy. "The Parliament that adopted this legislation was democratically elected and its members carried an electoral mandate to establish a National Health Insurance. "South Africa is also a country governed by the rule of law in which no person may be unduly deprived of their rights," the President said. Ahead of the signing, the South African Health Professionals Collaboration (SAHPC), which represents more than 25 000 private and public sector healthcare workers, expressed profound disappointment at the President's decision to sign the Bill into law. "Where we are now ...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The head of energy at the South African Local Government Association (Salga) has called for a review of both the size of the free basic electricity (FBE) allocation as well as the way the grant is assigned, arguing that many indigent households are currently not benefiting from the scheme as intended. Speaking during a roundtable discussion on South Africa's electrification programme as part of government's ongoing activities to mark 30 years of democracy, Nhlanhla Ngidi described the current monthly allocation of 50 kWh as "minute" and well below the 300 kWh to 400 kWh that poor households were typically consuming. He also argued that the registers of indigent households, which are used by municipalities to distribute the benefit, were out of date, resulting in intended beneficiaries being bypassed while those with means to pay were continuing to enjoy the benefit. In addition, the widespread practice of bypassing electricity meters, which was further undermining the relevance and effectiveness of FBE, while robbing both municipal distributors and Eskom of revenue. "The policy has good intentions, but we need to review it," Ngidi said, adding that after the elections government should also prioritise a recrafting of the way indigent households are identified and supported with electricity. Research published by the Public Affairs Research Institute in 2023 concluded that fewer than a quarter of qualifying indigent households were benefiting from the 50-kWh-a-month scheme, and that the scale of the grant was also insufficient to reduce poverty and inequality. The authors urged government to consider increasing the monthly FBE allocation to 350 kWh, which it described as the minimum threshold at which electricity would begin yielding meaningful socioeconomic benefits. Speaking during the roundtable, EE Business Intelligence MD Chris Yelland added that there was also a need to improve data collection and research around the electrification programme. Describing the connection of some 8.3-million households as a success, he said the goal of universal access beyond the current 94.7% remained elusive, owing to ongoing changes in circumstances driven by factors such as migration and urbanisation. Better data was required, he argued, to help identify the gaps, while research was needed to find better ways to close them. Yelland also argued that while the provision of access to electricity was crucial, it was equally important to address affordability to make that access truly meaningful and to mitigate the threat of electricity theft. The Department of Mineral Resources and Energy's Lufuno Madzhie reported that the backlog was currently estimated to be over 3-milion households, 1.2-million of which were in informal settlements mostly in and around South Africa's large urban centres. Besides internal capacity and financial constraints, municipalities also faced legal hurdles to electrifying informal settlements, which had not yet been resolved. Nevertheless, there was consensus that there should be ongoing efforts to meet the universal access goal, which has both social and economic benefits, ranging from convenience and safety, through to enabling night-time study and the launching of small businesses. Eskom Distribution senior manager Portia Papu indicated that Eskom remained committed to implementing the electrification programme, having been responsible for some six-million of the new connections deployed to date; initially off its own balance sheet and currently drawing on a yearly allocation in the national Budget. Papu indicated that the utility was also increasingly turning to new technologies, including microgrids, to implement electrification in those far-flung areas where the cost of connecting communities to the national grid was considered prohibitive.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. After a notable decline in the first two months of the year, the Ctrack Transport and Freight Index (Ctrack TFI) in March increased to an index level of 119.7. This is an increase of 1.1% compared with February, and just marginally up on a year ago. Except for two smaller sub-sectors (pipeline transport and storage, as well as warehousing) that declined, the other four sub-sectors in the index increased on a monthly basis, led by a strong increase in air freight. Similarly, compared with a year earlier, four sub-sectors increased during March, one remained unchanged (pipeline transport) and only the road freight sub-sector declined. The air freight sub-sector increased by 4.4% in March, following an increase of 1.2% in February, reaching the highest index level since June last year. All the underlying data for this sector indicated strong growth in March, shows the newest TFI report. Cargo loads on planes spiked by 50.4% compared with February, while the International Air Transport Association (IATA) also reported strong industry-wide air cargo demand, with double-digit yearly growth in cargo tonne-kilometres (CTK) for the third consecutive month. The strong demand was championed by carriers from Africa and the Middle East. According to IATA's latest report, growing air cargo demand is a reflection of buoyant international traffic that benefits from booming e-commerce and, possibly, but perhaps to a lesser extent, recent increased interest owing to ongoing capacity constraints in maritime shipping, among other factors. Overall, air cargo demand appears set to continue the upward trend in CTKs that started early last year. Furthermore, the number of unscheduled flights (flights that are typically chartered for cargo purposes) and consolidated airport flight movements also increased by 8% and 12.1%, respectively. Sea freight remains one of the main focus areas of South Africa's structural reform efforts and some of the shorter-term interventions at ports are starting to bear fruit, notes the TFI report. After tumbling in October and November, reflecting the inability of ports to handle cargo owing to a number of factors, the sea freight sub-component of the index started to recover in December, continuing its recovery in the early months of this year. March was the fourth consecutive month in which sea freight recorded positive growth. Container handling (both landed and shipped) increased by 14% in the first quarter of this year compared with the last quarter of last year, although off a low base, while other cargo, excluding cars, moved mostly sideways. The road freight sub-sector of the index, which has grown notably in recent years and now accounts for 84.5% of all freight payload in South Africa, recorded muted growth in March, signalling that many challenges remain in the early months of 2024. Road freight increased by 1.2% on a monthly basis in March, following four consecutive monthly declines. This sub-sector remains the backbone of logistics in South Africa, however, it comes at a cost to the economy, as transport via road remains notably more expensive than transport by rail, states the TFI report. "South Africa's road infrastructure is also buckling under increased heavy vehicle traffic. "A case in point: trucks were recently forbidden to travel on the R36 Bambi-Mashishing route due to the poor condition of the road. "Heavy vehicle traffic has since diverted to the N4 route via Machadodorp, resulting in a 47.4% increase in heavy vehicle traffic using that toll route." The rail freight sub-sector of the TFI increased 1.2% month-on-month in March, recovering partially from a weak January and February. Following five years of yearly declines (2018-2022), rail freight payload increased by 2.5% last year, even if off an extremely low base, notes the TFI report. Th...

Engineering News editor Terence Creamer discusses South Africa's approach to procuring battery storage, the delays that some of the battery storage bid windows face and the likely market reaction to these delays.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The deadline for South Africa's recently launched third battery energy storage bidding round, or bid window three (BW3), has been extended by three months to October 31, following a recent deadline extension for the concurrent second battery bidding round from April 30 to June 6. Independent Power Producer (IPP) Office head Bernard Magoro indicated during a Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) briefing that the BW3 extension had been granted on May 8, following requests from prospective bidders and amid ongoing congestion in securing grid-access cost estimate letters (CELs) from Eskom. An IPP requires a grid CEL to submit a compliant bid and is able to apply for a budget quote only once selected as a preferred bidder. Magoro also announced a two-month extension, from six to eight months, for IPPs to achieve commercial close after the BW3 preferred bidders were selected; a milestone currently scheduled to take place two months after the October 31 submission date. Commercial operation is then expected within 24 months from commercial close. The revision to the schedule has been made to provide IPPs with sufficient time to fulfil the conditions for commercial close in light of the fact that under the prevailing Interim Grid Capacity Allocation Rules, or IGCAR, it is taking Eskom six months to complete the processes required for advancing the CELs to grid connection budget quotes. Despite the extensions, the IPP Office urged prospective BESIPPPP BW3 bidders, as well as those participating in other concurrent public procurement processes, not to delay too long in approaching Eskom with CEL applications, as the Eskom Grid Access Unit was currently inundated with applications for both public and private projects. The realignment of the timeframes for BESIPPPP BW2 and BW3 follows a series of other delays to South Africa's procurement for renewable energy, gas-to-power (GtP) and storage since the resumption of public procurement in 2020, including the seventh renewables bid window, the deadline for which was recently extended from April 30 to May 30. The resumption of public procurement followed a protracted period of disruption, precipitated when the-then Eskom leadership declared in 2015 that the utility, which is the single buyer of electricity procured through the public framework, would no longer conclude contracts with renewables generators on the basis that it had sufficient generation capacity. South Africa subsequently experienced extreme levels of electricity disruption on the back of supply shortfalls, with rotational power cuts peaking in 2023, when Eskom implemented over 16 500 GWh of loadshedding across more than 330 days. Besides BESIPPPP BW2 and BW3, the seventh renewables bidding round is currently under way as well as South Africa's inaugural GtP public procurement bid window. Magoro reported that procurement programmes involving 8 231 MW of new generation and storage capacity were currently under way, against 7 335 MW of IPP capacity in operation. A further 1 897 MW of wind, solar PV and hybrid capacity was under construction and 1 153 MW of solar PV and battery storage was expected to advance to commercial close before the end of 2024. FIVE FREE STATE SITES SELECTED The BESIPPPP BW3 request for proposals (RFP) is seeking bidders for 616 MW/2 464 MWh of battery projects to be equally spread, at 123 MW apiece, across five pre-selected substation sites in the Free State, including Harvard, Leander, Theseus, Everest and Merapi. Eskom, which has selected the sites using various criteria, remains the single buyer under what will be 15-year power purchase agreements. The battery facilities will also be dispatched by Eskom as the system operator and are expected to provide not only capacity and energy but also ancillary...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. South Africa's Transnet Port Terminals (TPT) says it will continue to invest in Durban Container Terminal (DCT) Pier 2 while legal proceedings play out around its selection of International Container Terminal Services (ICTSI), of the Philippines, for a 25-year partnership at what is South Africa's largest container terminal. Rival bidder AP Moller-Maersk, of Denmark, is contesting Transnet's selection of ICTSI, which was made in July last year, calling the award unlawful and invalid. At a presentation to industry stakeholders in Umhlanga, KwaZulu-Natal, Transnet CEO Michelle Phillips confirmed that no date had yet been set for the hearing and described as a "worst-case scenario" one whereby the court set aside the award and ordered the State-owned entity to resume the bidding process afresh. She indicated that such an outcome could potentially delay what is currently regarded as Transnet's flagship private sector participation (PSP) project by up to two years. Phillips defended both the process run by Transnet as well as the award to ICTSI, saying that "as far as we are concerned the process was run in accordance with our rules" and the qualifying criteria were met. It has been reported, however, that AP Moller-Maersk will argue that, unlike its APM Terminals, which also bid, ICTSI fell short of a solvency requirement in the tender. For its part, ICTSI, which operates container terminals in 19 countries, insists it is fully able to fund the deal off its own balance sheet. Speaking during the same Transport Forum event, TPT CEO Jabu Mdaki acknowledged concerns that Transnet would hold back on crucial investments at DCT Pier 2 until a partner was in place. The terminal has the installed capacity to handle two-million twenty-foot equivalent units (TEUs) yearly, but has been underperforming against that nameplate. TPT, Mdaki insisted, was fully aware that the terminal faced equipment challenges and he reported that orders were still being placed for major equipment at the terminal and that it would continue to do so until there was legal certainty. "We've just issued a letter of award for four ship-to-shore cranes that we require at the terminal," he reported, noting that it would take 18 to 24 months before the new cranes would be delivered. "The reason for that is simple: we don't know what the outcome of the court challenge will be," Mdaki explained, adding that TPT had to act given that many of its cranes were operating beyond their useful lifespans and given the potential for the court action to lead to a protracted delay in completing the transaction. TPT had secured the cranes under its recently introduced partnering strategy with original equipment manufacturers (OEMs) for various pieces of equipment, in this case with Liebherr. Mdaki said that absent the OEM framework, the delay in securing a manufacturing slot at Liebherr could have been up to 48 months in light of current market demand. The decision to proceed was also premised on the fact that the cranes could potentially be used at other TPT terminals should the eventual DCT Pier 2 partner have an alternative approach to equipment. "Should the successful bidder say they do not require these cranes and they are going to bring in their own equipment, we are able to redirect that equipment to our other terminals. "If they do take them and they become part of the transaction, there is a mechanism, over-and-above the offer they have made as part of the transaction, for us to recover the funds." Likewise, TPT was preparing to procure straddle carriers for landside operations also using its OEM strategy. "So we are not sitting back and saying everything will only happen once the PSP partner comes in," Mdaki stressed. Despite the PSP setback, TPT has set a target to handle 4.4-million TEUs in 2024/25 (including over 2...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Despite a tough domestic economy undermining a recovery in new-vehicle sales to pre-pandemic levels, record vehicle exports in 2023 ensured that the South African automotive sector still managed to outperform the rest of the manufacturing sector, says Naamsa | The Automotive Business Council chief trade and research officer Dr Norman Lamprecht. The value of vehicles and automotive components exported from South Africa last year increased by R43.5-billion, or 19.1%, from the R227.3-billion recorded in 2022, to a record R270.8-billion - taking it to 14.7% of total South African exports. Vehicle exports increased by 47 809 units to a record 399 594 units last year, up from the 351 785 units exported in 2022, while vehicle export value increased by R46.9-billion, from R157-billion in 2022, to a record R203.9-billion in 2023. The automotive industry's 2023 export performance also included record exports to all major regions, including the EU, Africa, Southern African Development Community and North America. This success story flows from the pages of Naamsa's newly launched yearly Automotive Trade Manual (ATM), formerly known as the Automotive Export Manual. The ATM also shows, however, that automotive component exports from South Africa failed to match the performance of vehicle exports last year. According to the manual, compiled by Lamprecht and his team, automotive component exports declined from R70.3-billion in 2022 to R66.9-billion last year, mainly owing to a reduction in catalytic converter exports to the EU. Catalytic converters are used in internal combustion engine- (ICE-) powered vehicles to ensure cleaner vehicle emissions. The EU, and other developed economies around the world, are increasingly moving to electric and hydrogen vehicles, which do not use catalytic converters. Lamprecht notes that catalytic converters remained the top automotive component exported from South Africa last year, despite its decline, reaching R25.9-billion, or 44.1%, of total automotive component exports, followed by engine parts, tyres, and transmission shafts and cranks. Last year, catalytic converter exports totalled R29.5-billion, down from R34-billion in 2022. Lamprecht says the transition to electric vehicles (EVs) is "definitely affecting" the demand for catalytic converters. However, he expects this product to remain South Africa's top component export for the next ten years. Total South African automotive trade amounted to R520.5-billion last year, comprising 16.7% of the country's total trade GDP, up from 16.5% in 2022. As the largest manufacturing sector in the economy, the broader automotive industry contributed 5.3% to GDP in 2023 (3.2% manufacturing and 2.1% retail). In terms of regions, exports to the EU were again at number one, increasing to a record R147.1-billion last year, while exports to Africa, the second-largest export region, increased to a record R42.8-billion. Germany remained South Africa's premier automotive export destination, with a record export value of R83.1-billion in 2023. Three of every four vehicles exported in 2023 were destined for Europe and the UK. The top exporter from South Africa was Volkswagen Group Africa. New-Energy Vehicles New-energy vehicle (NEV) sales in South Africa grew by 65.7% from 2022 to 2023. Sales of battery electric vehicles increased to 929 units, up from 502 units in 2022. The segment remained stymied, however, by the lack of more affordable models. The share of NEV sales - by 21 brands - as a percentage of total new-vehicle sales, finally breached the 1% mark last year, increasing to 1.45%, up from 0.88% in 2022. India and China Rising Imports of light vehicles declined by 27 966 units, or 8.6%, from the 323 783 units in 2022, to 295 817 units in 2023, in line with a weak domestic new-vehicle market. The top country of o...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Electricity Minister Kgosientsho Ramokgopa denies that the prevailing reprieve from loadshedding has been "stage managed" to improve the prospects of the governing African National Congress ahead of the May 29 poll, attributing it instead to "orchestrated" engineering efforts undertaken by Eskom over the past 18 months. Speaking during a briefing that coincided with the fortieth consecutive day of no loadshedding and amid growing societal cynicism about the timing of such supply stability, the Minister also strenuously denied that the improved performance was because Eskom was relying more heavily on the diesel-fuelled open cycle gas (OCGT) turbines that it owned as well as those operated by independent power producers (IPPs). In April, when no loadshedding was implemented, Ramokgopa said that Eskom had spent R1.15-billion on diesel to produce 126 GWh of electricity from the Eskom and IPP OCGT turbines, representing a marked improvement on the R3.14-billion spent in April 2023 to produce 470 GWh. Eskom had set aside R22-billion for diesel in 2024/25, having exceeded its R30-billion budget in 2023/24 by R3-billion. Rather, the Minister attributed the improvement primarily to a recovery in the performance of the six coal stations of Kusile, Matimba, Majuba, Lethabo, Matla and Medupi, whose average energy availability factor (EAF) had recently climbed to above 60%. "The year-to-date performance is currently at 58.99%, which is a notable improvement from the 53% EAF in the same period last year," he said, indicating that on May 1 the EAF recovered to the 65% target set by the board for 2023/24, but which had not been achieved. The financial support provided by the R254-billion debt-relief package, he claimed, had enabled Eskom to improve its maintenance performance, by providing the certainty required for planning outages and for buying the long-lead items needed during those outages. However, Ramokgopa acknowledged that demand was also notably lower period-on-period, supported largely by a surge in rooftop solar installations to an estimated 5 400 MW. This, too, had provided Eskom with additional space to conduct maintenance and to replenish emergency reserves. He dismissed notions of any "correlation" between the improved performance and the upcoming election, highlighting that the Energy Action Plan was announced in July 2022, and that implementation had started in earnest well before the date of the election was promulgated on February 20. Ramokgopa said most of the recent disruptions to electricity supply were related to a collapse in municipal distribution infrastructure, which he said was deteriorating at a rate that was faster than initially anticipated. He said a structural financial solution was required to address the problem, which was leaving residents in certain parts of the country without power for extended periods, in some cases several months.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The initial direct cost of placing South Africa on an energy transition pathway over the coming five years in line with its decarbonisation targets is calculated at a hefty R1.5-trillion in the Just Energy Transition Investment Plan (JET-IP). Less visible, however, are the socioeconomic costs associated with failing to pursue the Nationally Determined Contribution (NDC) goal of reducing carbon dioxide-equivalent (CO2-eq) emissions to the lower end of the NDC range of between 420-million and 350-million CO2-eq tons in 2030. The lower target is said to be compatible with South Africa's fair contribution to helping to cap the global rise in temperatures to 1.5°C above pre-industrial levels. To assess these direct and indirect costs, the Presidential Climate Commission (PCC) and Cambridge Econometrics have applied Cambridge Econometrics' E3ME model in a bid to understand the trade impacts of future policy choices and the economic impacts associated with the environmental damage caused by higher temperatures. The macroeconomic simulation model has been used in this instance to capture the socioeconomic and energy implications for South Africa under conditions where the country and the world adopt decarbonisation paths, premised on: a business-as-usual outcome calibrated to the stated energy policies of governments, as articulated by the International Energy Agency and where no carbon border adjustment measures are implemented and no just transition funding is available for South Africa; and a 1.5°C compatible pathway for South Africa and the rest of the world, that assumes energy system decarbonisation plans for South Africa somewhat more ambitious than the prevailing Integrated Resource Plan, as well as carbon taxation, recycling of carbon tax revenues, just transition funding and global carbon border adjustment measures. These outcomes have been tested against four scenarios, including one where both South Africa and the rest of the world pursue business-as-usual pathways. A second scenario where South Africa pursues a 1.5°C-compatible pathway and the rest of the world remains on a business-as-usual trajectory. Thirdly, where South Africa implements a business-as-usual policy and the rest of the world a 1.5°C-compatible pathway. And fourth, where both South Africa and the rest of the world aim for the 1.5°C-compatible, or net-zero, pathway. PCC head of climate mitigation Steve Nicholls tells Engineering News that, when climate-related loss and damage is excluded, the model shows South Africa fairing best from a growth and employment perspective under a scenario where it implements net-zero policies and the rest of the world remains on a business-as-usual pathway. Growth would be 7.5% better by 2030 and 5.2% higher by 2040, while employment would be 0.8% and 1.5% higher for the same periods respectively. However, the associated 3°C global temperature pathway could offset those gains as the country faced more and increasingly costly extreme weather events, for example from floods and droughts. The most economically and employment damaging scenario for South Africa, however, would be one where it adopted a business-as-usual stance, while the rest of the world implemented 1.5°C-compatible policies. Under such a scenario, the model shows that South Africa's gross domestic product (GDP) would be 4.2% lower in 2030 and 3.9% lower by 2040 than under a scenario where the rest of the world also remained on a business-as-usual pathway. Likewise employment creation would be far weaker. The key reason for the decline, Nicholls explains, would be the loss of exports as the rest of the world imposes carbon border adjustment measures on South Africa's higher-carbon products. The model shows that several domestic sectors, including agriculture, construction, industry, energy, services and...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. It's easy to overlook the sheer magnitude of Robertson and Caine's (R&C's) operations in Cape Town. The company's ten boat-building factories and assembly lines are dotted across the city - from Woodstock to Paarden Island to Montagu Gardens, with the latter also housing a substantial warehouse. Other numbers, however, make it easier to appreciate the scale of the catamaran builder, including the fact that the 33-year-old company employs more than 2 400 people, with one boat rolling off an assembly line somewhere in the city almost every weekday of the year. For this year, that will be more than 200 catamarans. R&C is South Africa's largest boat builder for the export market, the largest builder of ocean cruising catamarans in the southern hemisphere and one of the top three in the world, with the French its biggest competition. A catamaran can either be powered by sail and a small engine, or by more powerful engines alone. MD Theo Loock is perhaps proudest of its most recent accolade - the 2024 European Powerboat of the Year award for the Leopard 40 PC in the powerboat category. New Ownership R&C is Loock's fourth turn at the helm of a company, following 15 years as the boss of JSE-listed energy storage and automotive component manufacturer Metair. He retired at Metair in 2020, joining R&C in 2021, following a request to do so from asset manager CapitalWorks. R&C was founded in 1991 by John Robertson and the late Jerry Caine, reaching a new scale of operations when CapitalWorks joined the business as a strategic equity partner. Loock's brief as the new CEO included overseeing the sale of the business and facilitating Robertson's retirement last year. (John's son, Michael Robertson, remains at the company as design manager.) Today, R&C is owned by Vox Ventures, a subsidiary of PPF Group, an international diversified investment firm in Europe, with its roots in the Czech Republic. The new owners have a singular ambition for R&C - that it continues to expand globally while remaining based in Cape Town. Small Beginnings Before Robertson and Caine started the company, Robertson built monohulls - including one used by South Africa's champion sailor Hanno Teuteberg to win the Cape to Rio race in 1993. This gold medal attracted the attention of charter companies in the US, which asked Robertson if he didn't want to consider building catamarans. Multihulled catamarans offer more stability on the water than monohulls, which means they are better suited to tourist activities. "The charter market is all about comfort," notes Loock, quipping: "You don't want the children sliding off the deck." Robertson accepted an order for ten catamarans, ultimately leading to the birth of R&C. Today, R&C's product line-up includes sailing catamarans (42 ft, 45 ft and 50 ft) and power catamarans (40 ft, 46 ft and 53 ft). "We have a good balance, with around 60% in sailing and 40% in power," says Loock. More than 99% of R&C's boats find their way overseas; more specifically, the US East Coast, the Caribbean, Seychelles, Mediterranean, Asia, South Pacific and South America. Covid-19 provided a noticeable sales boost, as customers with healthier bank balances found that they could isolate from the pandemic on boats in some of the most beautiful parts of the world, says Loock. R&C's boats are handed over to the customer in the Cape Town harbour, where they undergo their final commissioning checks before either being sailed off by the owner or transported by freighter to their final destination. If you ever want to see R&C's boats make their trek to water, get up between 02:00 and 04:00 when they are transported to the Cape Town harbour on specialised trucks and under metro police escort. In essence, every boat sold by R&C is a Leopard-branded catamaran. However, they are only branded as such should ...

Engineering News editor Terence Creamer talks about the highs and lows of South Africa's real economy in the 30 years of democracy, as well as what could be done to reignite the manufacturing sector in particular.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. TransUnion Africa CEO Lee Naik says a tough economic environment characterised by cost-of-living challenges, high fuel costs and currency depreciations have resulted in a notable decline in vehicle sales and financing in South Africa. However, while this contraction is expected to persist, manufacturers and dealerships are stepping up their efforts to help consumers enter, or re-enter the auto market, he notes. TransUnion this week released its Vehicle Pricing Index (VPI) for the fourth quarter of 2023. Actions that vehicle manufacturers and dealerships are taking to egg on sales numbers include discount structures, incentives, trade assistance mechanisms, interest rate reductions on loans, and a focus on monthly payments rather than gross prices. "These efforts show innovation in an otherwise stagnant sector," says Naik. According to the newest VPI, a significant market trend is the increase in the average loan amount for financed vehicles. TransUnion data shows that, in the last quarter of 2023, the average loan value increased to R396 000, up from R386 000 in the same period in 2022. This 2.5% average loan value growth comes off the back of a consumer price index of 5.1% in December, and a new-vehicle price increase of 6.3% (fourth quarter, 2023 compared with the fourth quarter, 2022). TransUnion also reports that there has been an overall reduction in new accounts opened over the last two years, further confirming a decline in purchasing power and volume. "The net effect of these economic markers is that lower net income consumers are being priced out of the market - they either do not qualify for vehicle loans or are unwilling to add a new debt burden to their monthly budgets." This is where the industry is evolving to enable economic participation, says Naik. "Consumers are benefitting from the introduction of new subscription-based and vehicle-on-demand models and services. "Renting, station-based car sharing, free-floating car sharing, micro-mobility services, ridesharing and ride-hailing options are increasingly being brought to market to make transport more affordable for consumers, with the end-result promoting financial inclusion, furthering economic empowerment and stimulating economic growth." The shift in the ratio of used-to-new vehicles being financed - from 1.98 in the fourth quarter of 2022 to 1.2 in the fourth quarter last year - also signifies a change in consumer behaviour, driven by factors such as improved new-vehicle stock availability, an interest rate that is perceived as being stable, and innovation at dealership level, notes Naik. These factors are leading to consumers increasingly opting for new, rather than used vehicles. "Overall, the macroeconomic climate remains incredibly challenging for consumers and continues to affect buying power and spending habits," says Naik. "While the data sets in this index end in December 2024, the market indicators continue to tell a difficult story for the South African consumer - first quarter Naamsa sales figures remain depressed, and the cost of owning, running and maintaining a vehicle continue to increase, evidenced by another petrol price increase on May 1. "The South African vehicle industry's ability to adapt and innovate, particularly in embracing new mobility trends, will be essential for sustainable growth," states Naik.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Johannesburg's City Power is seeking manufacturing and venture capital partners to further develop and pilot a rugged 'energy box' concept in one of the city's 312 informal settlements as a possible greener and safer alternative to the illegal connections that currently predominate. Chief engineer for renewable energy Paul Vermeulen says the idea is to locate 3 kWh energy storage boxes - linked to lighting, charging and cooking appliances - within individual dwellings and link these to a centralised solar photovoltaic generator securely located on a nearby warehouse or factory rooftop. He notes that hundreds of secure rooftops capable of hosting 500 kVA-plus solar systems are already connected to the conventional grid in Johannesburg. The storage systems, which would probably comprise lithium-ion battery technology, would be charged using a constant supply of 130 W of nonlethal direct-current (DC) electricity through a light wiring network, containing low volumes of copper to make it less prone to theft. This informal grid, which would be relocatable should the area be formalised, would be supplied from conventional alternating-current (AC) grids in adjacent reticulated areas through an AC-to-DC converter and distribution control system that manages the charging of each energy box. The re-usable nature of the solution would also ensure compliance with the Municipal Finance Management Act, which disallows the city from installing fixed electricity reticulation in "non-permanent" areas. Lighting and mobile devices would be connected to the energy box using the USB-C standard and each box would be equipped with a single induction-based hotplate for boiling water and cooking. Vermeulen acknowledges that the induction stoves would require cookware containing ferrous materials, but says these are becoming more common and affordable. The appliance control system will use powerline carrier technology to communicate to the DC distribution and charging control system, drawing power from the conventional AC grid. Communications could also be used for tamper detection and energy balancing, as well as community fire and security alarms. Vermeulen believes the capital expenditure could be funded through the Integrated National Electrification Programme allocation and registered dwellings would also benefit from the free basic energy allocation, which many eligible households are currently not receiving. Household consumption above that 50-kWh monthly threshold would be charged at a nominal subsidised tariff. "The system can only dispense a fixed amount of energy to each household daily, thereby avoiding the problem of uncontrolled and excessive nontechnical losses common to conventional AC grid service connections," Vermeulen notes, indicating that up to 72 kWh can easily be lost daily to an illegally bypassed 3 kVA service connection. In addition, he highlights that the electrocution risks associated with illegal connections are high, with a number of deaths reported every year. "There is a need for a safe energy solution that can out-compete these illegal operators and, having surveyed residents within these areas, we have found a willingness to pilot the concept both for safety reasons and to reduce reliance on mafia-style illegal connectors." From a system perspective the constant controlled load would not increase the magnitude of the evening peak, avoiding the problem of uncontrolled electricity theft, while insulating the community from future Eskom price increases. Vermeulen says the rooftop solar system could be sized to offset the full cost of the energy provided, with the levelised cost of rooftop solar currently estimated at R1.30/kWh against the average cost of Eskom power of R1.75/kWh, which is expected to rise in future. "Eskom network and demand charges are also like...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Two solar photovoltaic (PV) projects selected as preferred bids under Bid Window 6 (BW6) of the Department of Mineral Resources and Energy's (DMRE's) renewable energy procurement programme reached commercial close on April 30. The projects, which were part of a group of six PV projects to advance to preferred-bidder status for a 1 000 MW allocation in 2022, have a combined capacity of 360 MW and a combined investment value of R4.9-billion. During BW6 none of the wind projects vying for a 3 200 MW allocation were selected owing to grid-related constraints. The DMRE said in a statement that the remaining four preferred bidders were finalising preparations for commercial close but were still hampered mostly by grid-access related challenges, as well as interdependencies between projects across bid windows. "The department and IPP Office are working tirelessly with Eskom to resolve these challenges, to ensure that all projects can reach commercial close and start construction," the DMRE said. The two projects to have achieved the milestone, meanwhile, are the Virginia Solar Park, located in the Lejweleputswa district of the Free State and representing the province's seventh publicly procured renewables project, and the Doornhoek PV project, which is the North West's sixth public renewables project and located in the Dr Kenneth Kaunda district municipality. To date, 95 independent power producer (IPP) projects, with a collective capacity of 7 336 MW, have advanced under the bigger programme. The Virginia Solar Park project is being implemented as a partnership between Red Rocket, Reatile, Jade-Sky Energy and the Red Rocket Opportunity Trust, while the Doornhoek PV project is majority owned by AMEA Power, which has partnered with Ziyanda Energy and black-women-owned Dzimuzwo Consulting. South African entity participation in each project is 49%. In a statement, Red Rocket said the Virginia Solar Park was located about 140-km north-east of Bloemfontein, and was the biggest solar farm procured under the Renewable Energy Independent Power Producer Programme, with a contracted capacity of 240 MW and peak capacity of 275 MW. CEO Matteo Brambilla welcomed the latest milestone by the company, which he said had consistently held its own against large multinationals to become a highly successful IPP in South Africa. A joint venture between PowerChina and Green Whistle would build the Virginia Solar Park under a turnkey engineering, procurement and construction contract. Construction on both solar projects is expected to take no more than 24 months with their generation capacity anticipated to come online by May 2026. "In support of [addressing] the current economic challenges that South Africa is facing, the two projects have committed a total of 2 034 job opportunities (measured in job years)," the DMRE said, adding that R389-million would be spent on skills, supplier, enterprise and socioeconomic development over the 20-year lifetimes of the two plants.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The City of Cape Town (CoCT) says it is moving closer to turning landfill waste into energy, with two projects that are designed to produce electricity from the combustion of landfill gas moving towards implementation. Landfill gas, primarily made up of methane, is produced when organic matter, such as food scraps, break down at landfill sites. To convert this gas into electricity, perforated pipes or 'wells' are dug into a landfill site to channel it as a fuel to produce electricity in specially-designed engines. CoCT Urban Waste Management MMC Grant Twigg tells Engineering News Online that the Coastal Park landfill site waste-to-energy project is awaiting the installation of a thermal mass-flow meter before the gas engines can be put into operation, while the process to permit the connection of the engines to the electricity grid is ongoing. Should everything run according to plan, the estimated date for first electricity production is sometime during the second half of this year. At the Vissershok landfill waste-to-energy project, Twigg says there have been some delays with the appointment of a gas-flare operator owing "to complexities and complications in the procurement process". This has impacted the timeline for the development of the detailed designs for the waste-to-energy component, "pushing this out significantly." "The first 2 MW generation infrastructure at Vissershok is scheduled for implementation in 2026/27, increasing thereafter to between 7 MW and 9 MW of generation capacity by 2028/29, depending on gas yields." Just shy of R79-million has been budgeted for Phase 1 of the Vissershok project, which includes two generator sets, various filters and controls, as well as setup, installation and connections costs. Further costs will be incurred for Phase 2, says Twigg, but it is too early at this point "to indicate these costs". He adds that the Vissershok landfill site is an Eskom-supplied site, with initial investigations showing that the local grid may be able to take up to 7 MW of electricity that could be fed into the grid. This would, however, require confirmation during the design stages of the project. The expected capital outlay for the Coastal Park energy project is R73.58-million. Twigg says the electrical generating capacity of this project will be about 2 MW. Some of this electricity will be used to power the new recycling facility that is under construction at this site. While the process to put the gas engines into operation is under way at this site, CoCT is using a flaring system at the end point of the well system to destroy landfill gas before it can enter the atmosphere. Landfull gas has a global warming capacity estimated to be 25 times higher than carbon dioxide. The flaring and electricity generation system at Coastal Park has been designed in such a manner that it can earn the city carbon credits. The proceeds from a planned auction of these carbon credits will be ring-fenced to fund projects of the city's Urban Waste Management Directorate aimed at reducing the impact of pollution. Twigg says it is unlikely that the Coastal Park project will be expanded, given that the site is set to close down "in the next few years". However, the project will go ahead as landfill gas continues to be generated for 10 to 15 years after the closure of a landfill, albeit at a slightly decreasing yield year-on-year. "This is evidenced by the fact that the Bellville South landfill, which closed in 2018, is still generating landfill gas eight years after the landfill was closed," says Twigg.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. South Africa's much-delayed draft Gas Master Plan (GMP2024) has been released for public comment by Mineral Resources and Energy Minister Gwede Mantashe, amid indications that the gap between demand and supply will grow steeply from 2026 onwards when Sasol ceases to supply Gauteng and KwaZulu-Natal industrial customers with gas imported from Mozambique. The document includes four scenarios, including a base case that shows that gas demand will far exceed supply in the short-term and that the gap, which has been described as an anticipated 'gas cliff', will worsen as demand grows. It has also been published against the backdrop of an anticipated growth in gas-to-power generation, with a public procurement programme under way and Eskom also pursuing its own large-scale greenfield and diesel-to-gas conversion initiatives. The draft GMP2024 recommends that South Africa should focus on the importation of liquefied natural gas (LNG) over the short- to medium-term to meet demand and pursue regional supply options to mitigate the supply shortfall anticipated between 2026 and 2030. "Government-to-government agreements could be relevant instruments to unlock such regional projects," the document states. However, it also recommends that indigenous natural gas production be pursued to diversify supply in a way the minimises geopolitical risk and improves prospects for competitive prices. "The country should, thus, strike a balance between domestic/indigenous gas, piped imports and LNG imports to ensure diversification of supply and reduce risks to security of supply," the draft document recommends. The GMP2024 focuses on reducing the total cost of supply, localisation and supporting energy security, but makes little reference to South Africa's climate commitments, stating only that gas could support a shift away from unabated coal-based electricity production. In a statement, the Department of Mineral Resources and Energy described the draft GMP2024 as a policy instrument that sought to ensure security of gas supply by diversifying supply options from both local and international markets. "It outlines the role of natural gas in the context of energy mix and provides policy direction to the industry in South Africa," the department stated. It added that the plan considered the complete gas topology ranging from demand, supply, importation, infrastructure, and distribution networks. "It recognises the critical role of natural gas in the country's economy, and anticipates the infrastructure required for the delivery of gas at a point of consumption based on a least-cost model." A deadline of June 15 was set for the submission of written comments

In this essay, Terence Creamer reflects on the factors that have shaped South Africa's real-economy sectors of manufacturing, mining and agriculture over the past 30 years and considers ways to end the economy's persistent underperformance. In a speech that disrupted the 'Rainbow Nation' narrative, which played an important unifying role at the highly uncertain start of South Africa's transition from apartheid to democracy, but which also failed to reflect the realities of entrenched race-based poverty and inequality, then Deputy President Thabo Mbeki defined South Africa as a country of "two nations". Opening a 1998 Parliamentary debate on 'National Unity and Reconciliation', Mbeki questioned whether South Africa was making progress in achieving the objective of nation building. Mbeki's vision was for a "common nationhood which would result from the abolition of disparities in the quality of life among South Africans based on the racial, gender and geographic inequalities we all inherited from the past". While acknowledging that the polite and reassuring response would be "yes", Mbeki insisted that the honest, albeit discomfiting, answer was "no", and then unforgettably declared that "South Africa is a country of two nations": one white and relatively prosperous; and a second and larger nation being black and poor, living under conditions of grossly underdeveloped economic, physical, educational, communication and other infrastructure. The abolition of the apartheid legacy, he concluded, would require sustained effort over a considerable period of time, dismissing as self-serving arguments suggesting that "four or five years are long enough to remove from our national life the inheritance of a country of two nations which is as old as the arrival of European colonists in our country, almost 350 years ago". Now, 30 years into South Africa's democracy, the socioeconomic realities and disparities sketched by Mbeki sadly largely persist, somewhat masked by the partial yet highly uneven achievements of policies such as affirmative action and black economic empowerment; policies that have not always been fairly applied, leading to deep mistrust and anger in some sectors of society, as well as a flight of skills from certain key institutions. In the economy overall, a gulf also remains between the formal and informal economies. The former being sophisticated yet too small and concentrated to make a proper dent in South Africa's extreme official unemployment rate of over 32%. It is also subjected to a raft of legislation and regulation that has increased since 1994, some of which has slowed investment and has had a negative impact on growth and development. The informal sector, meanwhile, operates largely outside of these constraints and continues to play an important role in supporting livelihoods. But it is smaller and less vibrant than is the case in several peer countries and is prone to turf wars that, at times, turn violent and xenophobic. In the formal sector it's also a tale of two realities. The financial and services sectors have grown substantially since 1994, while many sectors in the real economy have been on the decline, especially the manufacturing sector, whose relative contribution to gross domestic product has shrunk massively, from over 20% in the 1990s to about 12% currently. While the construction sector, which plays a key supportive role across a range of productive sectors, has been all but decimated. Only one large integrated construction company, WBHO, is still listed on the JSE, with the others having either exited the general construction market, or having closed or entered business rescue. Real Economy Pressure Measuring progress in the real economic sectors through the prism of Mbeki's aspirational vision for a society and economy that reduces disparities reveals serious underperformance over the past three decades. This, despite general societal and policy consensus over the period that their growth a...

Newly appointed Eskom group CEO Dan Marokane has provided assurances that loadshedding during the upcoming winter months will likely be contained at Stage 2, thanks to improvements in generation performance across the coal-fired power station fleet. As of April 26, Eskom has marked 30 consecutive days without loadshedding, which Marokane said on Friday was a "good moment" to reflect on. He attributed the achievement to the success of the generation recovery plan (GRP) implemented by the State-owned power utility since April 2023. Between April 2023 and March 2024, Eskom recorded a 9% year-on-year reduction in unplanned losses and a 19% decrease in unit trips. In addition to the no-loadshedding trend in April, Eskom's diesel spend averages 50% lower compared with the same time last year. The current load factor of 9% compares with a load factor of 18% in April last year. Marokane pointed out a considerable shift in the unreliability outlook, with a downward revision of 1 000 MW in the base case scenario. Eskom targets a further reduction of 1.7 GW in unplanned losses during winter, while intensifying efforts in demand management initiatives. Reflecting on Eskom's efforts since the previous winter, Marokane said the utility's investment in maintenance and disciplined execution of the GRP had resulted in a gradual reduction in unplanned losses. However, he said the current unplanned losses of 14.2 GW were still unsustainable. Eskom aims to reduce load losses to below 14 GW to ensure greater stability in power supply.