http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.71Change: -0.01
R/$ = 10.96Change: 0.06
Au 1198.46 $/ozChange: 0.30
Pt 1229.50 $/ozChange: 6.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 11, 2012

Progress and risks as SA moves to deal with power crisis

Back
SECURITY|Africa|CoAL|Development Bank Of Southern Africa|Environment|Eskom|Industrial|Ment Corporation|Projects|Renewable Energy|Renewable-Energy|Security|Step Strategic Venturing|Water|Africa|South Africa|Security|Building|Electricity|Energy|Energy Consumption|Energy Efficient Solutions|Energy Industry|Energy Needs|Energy Sector|Energy Sources|Green Solutions|Obvious Solutions|Potential Energy Developers|Power Producer|Security|Services|Solutions|Francis Gray|Mike Bean|Power|Security|Water
SECURITY|Africa|CoAL|Environment|Eskom|Industrial|Projects|Renewable Energy|Renewable-Energy|Security|Water|Africa||Security|Building|Energy|Security|Services|Solutions|Power|Security|Water
security|africa-company|coal|development-bank-of-southern-africa|environment|eskom|industrial|ment-corporation|projects|renewable-energy|renewable-energy-company|security-company|step-strategic-venturing|water-company|africa|south-africa|security-facility|building|electricity|energy|energy-consumption|energy-efficient-solutions|energy-industry|energy-needs|energy-sector|energy-sources|green-solutions|obvious-solutions|potential-energy-developers|power-producer|security-industry-term|services|solutions|francis-gray|mike-bean|power|security-person|water
© Reuse this



Government’s proposed allocation of an additional R4.7-billion for solar water geysers has been welcomed as a step in the right direction, but other savings initiatives will be required to mitigate the prevailing risk to businesses and consumers of the country’s power shortages.

Research conducted by professional services company Step Strategic Venturing shows that South Africa has been in a precarious position for the last eight years, with the reserve margin – the level of extra power capacity above what is expected to be needed – falling below the globally accepted safe limit of 15%. This margin has been steadily decreasing over the last ten years and is currently sitting at only 3%.

Director Francis Gray believes consumers and businesses have been lulled into a false sense of security that the issue of load- shedding is a thing of the past. But he also says that there are a number of obvious solutions available. “It is 50% cheaper to gain the energy needed from saving energy than from building new energy sources in South Africa. This is particularly relevant for the residential sector, which is the most inefficient in terms of energy consumption. Often residential consumers are put off by the upfront costs of installing green solutions, so there is a need for, innovative business models to allow end-users to access energy efficient solutions cost effectively.

Gray stresses, too, that the additional R4.7-billion for solar geysers should be coupled with regulatory reforms that facilitate growth. The industry, he argues, is also currently structured to contradict its own mandate. “Particularly looking at parastatal Eskom, in many respects, they are there to build and supply megawatts; however, government is calling for the saving of megawatts.

Meanwhile, on the supply side, government is expected to announce more details on its independent power producer (IPP) procurement process, following a request for information (RFI) from potential energy developers and suppliers that closed in March.

Step’s Mike Bean says the IPP process will enable a greater number of private companies to participate in the energy sector, which is critical if South Africa is to meet its energy needs in the future.

“Three significant factors are shifting the energy industry, namely an ever-increasing demand for electricity, depleting fossil fuels and the ominous signs of climate change,” says Bean.

“These undercurrents are driving significant price increases and it is becoming increasingly critical to find ways of generating power that are less hazardous to the environment as well as technical innovations that enable us to achieve more with the power we are already generating.

“In South Africa, demand for electricity is also showing no sign of slowing down. In fact, it is expected to grow faster than any other final form of energy. Power shortages, rising prices and government commitments to reduce our reliance on coal power mean that South Africa, and indeed the African continent, are not immune to these changes in the energy industry.”

Bean says this presents a significant number of opportunities for those companies ope- rating within the clean energy and energy efficient space. “Government has demon- strated a clear commitment to growing alternative sources. Significant change carries with it tremendous opportunities. Traditional energy companies need to consider how these factors will affect their businesses into the future, while new entrants and investors both have a window of opportunity to break into an industry where traditionally the economies of scale were significant barriers to entry.”

He says that while start-up costs for businesses operating within the energy space may be significant, there are a number of options available to access capital from both private and public sources. “Development finance institutions such as the Industrial Develop- ment Corporation (IDC), the Development Bank of Southern Africa (DBSA) and gov- ernment bodies have set funds aside to specifically innovate in the energy space. The IDC has announced that it intends to spend approximately R25-billion over the next five years on green projects, including financing for 12 of the 28 IPP projects in the country.”

There is a vibrant and active renewable- energy community in South Africa. Technical industries attract technical people and there may be a tendency to overinvest in the technology without clearly understanding the basic needs of the target market.

“In order to increase the benefits available, it is crucial that emerging energy businesses ensure they have a well-structured business model and growth strategy in place in order to raise the capital necessary to reach an attractive scale. In our experience of a number of capital projects in the renewable-energy sector, while the technology may be innovative, the benefits still need to be communicated effectively in order to access capital and ensure buy-in from key stakeholders.

“As a result, it is important for new energy businesses to ensure they carve out their own space in the market now, as growth in the renewable-energy industry is set to accelerate,” concludes Bean.

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Regulation News
GARY WHALLEY The power line industry supports Eskom’s power transmission plans in the short and medium term
Engagement between the power line industry, State power utility Eskom and government is necessary to develop a strong and sustainable power line industry that is capable of servicing the electricity transmission requirements of the country as well as protecting jobs...
Cellular major MTN South Africa has approved two gas-powered generation developments for its Doornfontein (1 MW) and Newlands (6 MW) sites, in Gauteng, based on the success of its 2 MW trigeneration plant, at its Roodepoort headquarters. MTN will expand this...
Article contains comments
The National Energy Regulator of South Africa (Nersa) will release a consultation paper in February next year outlining the possible regulatory framework for “distributed power generation” in South Africa, including how “prosumers” could be empowered to feed surplus...
Article contains comments
More
 
 
Latest News
Updated 2 hours 13 minutes ago A Spoor & Fisher partner on Wednesday called on the Department of Trade and Industry (DTI) to finalise its proposed policy for Intellectual Property (IP). The policy, which had not been drafted in consultation with IP law experts, was published in September 2013,...
Auditor-General Kimi Makwetu
Updated 2 hours 23 minutes ago Auditor-General Kimi Makwetu has called on all government leaders to play a crucial role in ensuring that government departments and entities improve their audit outcomes. He has raised concerns over irregular expenditure, non-compliance with legislation, auditees...
Updated 2 hours 39 minutes ago The Somalia Stock Exchange expects seven companies in the telecoms, financial services and transport sectors to list their shares when the bourse is set up in 2015, its founder said. Somalia's economy is slowly recovering from more than two decades of conflict,...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
JAMES ROBERTS The MOM incubator was designed to help babies in developing nations who were dying in conflict-struck nations or who do not receive hospital care
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks