Sep 09, 2011
Financier moves ahead with biofuels projectBack
© Reuse this
“The IDC has earmarked the Craddock Bioethanol project, in the Eastern Cape, to take through to production to show government that the industry can be developed sustainably. “The remaining two projects will be put on hold until further progress has been made by government on biofuels policies,” says the IDC head of green industries Rentia van Tonder.
IDC industry champion of green industries Noel Kamrajh says the IDC hopes to start construction early next year, with first production expected by 2014. The Craddock bioethanol production plant is expected to produce 300 000 ℓ/d and 100-million litres a year of bioethanol.
The output of the plant, which will process grain sorghum and produce dehydrated bioethanol, is intended to offset 2% of the country’s fuel imports. Ethanol acts as an oxygenated additive and adds volume to fuel, while eliminating the addition of methyl tertiary-butyl ether currently found in fuel developed by some refiners.
“The project aims to resolve the key challenges and potential regulatory bottlenecks that could be faced by the new industry. “As other commercial investors start to develop biofuels projects, they will be spared these challenges that the IDC has and is experiencing during the implementation of its Craddock project,” says Kamrajh.
Van Tonder adds the IDC believes that, if successfully developed, the bioethanol project can place more pressure on government to fast-track its biofuels regulations and policies.
Financiers or developers may not be in a position to develop their own biofuels plants owing to the risks and challenges associated with developing an early project, where security of strong offtakes is lacking and a long-term enabling environment, in which government supports certain security on revenues, has not been established.
“Biofuels are still in the early phases of development in this country and the opportunity exists to develop projects into a sustainable industry,” says Van Tonder.
The IDC’s long-term aim is to develop all three of its projects to produce 300-million litres a year of South Africa’s required 400-million litres a year of biofuels.
The initiation of biofuels projects has been slow moving; however, the past six months has seen increased interest and positive action in developing the industry, she says.
“At the end of last year, government appointed consultants to investigate the feasibility of a mandated upliftment in the industry and the threshold of pricing to make investments in biofuels feasible and provide an economic return for potential investors,” Kamrajh explains.
The outcomes of one of the two completed studies were presented to the biofuels steering committee in June, while the blending margin study is scheduled for completion this month. The Department of Energy and the National Treasury are to consider these proposals before passing the regulations.
The IDC has allocated R25-billion for investments into green industries over the next five years. Of this, R2.6-billion will be spent on the manufacturing of green components, such as wind blades and solar panels. A further R14-billion to R15-billion will be invested in the renewable-energy industry and the remaining R6-billion to R8-billion will be shared between fuel-based energy initiatives, such as waste-to-energy, cogeneration and biofuels, and pollution and emission management.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Energy News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...