Engineering News Online Audio Articles Engineering News

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 Energy Regulator of South Africa (Nersa) has extended to June 17 the deadline for comment on Eskom's application to preserve and reserve grid capacity for independent power producers (IPPs) participating in public procurement processes implemented in line with Section 34 of the Electricity Regulation Act (ERA).
The initial deadline was May 25.
In its submission, Eskom is seeking permission to discriminate in favour of public procurement IPP projects, at the expense of private IPP projects, arguing that such discrimination would be in the "public interest".
"Without any form of protection, public procurement programmes remain incapable of competing with the much more agile and well-funded private sector energy procurement programmes.
"Therefore, without grid preservation/reservation in favour of the public energy procurement programmes, these programmes are likely to continue failing as evidenced by the recent failure of Bid Window 6 (BW6) of the Renewable Energy Independent Power Producer Procurement Programme," Eskom says in its submission.
During BW6 in 2022, none of the 23 wind projects vying for 3 200 MW advanced to the preferred-bidder stage, owing to the grid capacity on which their bids were based being allocated to projects that secured grid connection budget quotes over the same capacity.
This was made possible by reforms made to Schedule 2 of the Electricity Regulation Act, which allowed private projects to proceed without a licence and which Eskom says, "resulted in an exponential increase in applications for grid connections from IPPs with private power purchase agreements".
Private IPPs, Eskom claims, are moving at a faster pace to secure grid-connection capacity compared with Section 34 IPPs, which must go through a protracted procurement process.
Although Nersa's consultation paper makes specific reference to BW7, the deadline for which has already shifted out once and appears poised to be extended again, Eskom's submission is suggestive of broader and ongoing preservation and reservation requests.
Market reaction is expected to be negative, given that it is in clear breach of the open and non-discriminatory access stipulated in legislation and the Grid Code.
In its submission, Eskom bases its public-interest justification on the argument that the continued failure of public procurement programmes will erode investor confidence, undermine government efforts to attract foreign direct investment, and frustrate ambitions related to the just energy transition and climate mitigation.

Engineering News editor Terence Creamer discusses Eskom's application to the National Energy Regulator of South Africa, seeking permission to preserve and reserve grid capacity for publicly procured IPP projects, as well as the implications should permission be granted.

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 Energy Regulator of South Africa (Nersa) reports that it registered a further 105 generation facilities during the period from January to March 2024, raising to 1 415 the number of facilities registered since the system was introduced in 2018.
In a statement, Nersa said the newly registered facilities had a combined capacity of 788 MW and a total investment value of R18.4-billion, increasing the overall capacity of registered projects to 7 158 MW and the total investment value to R131-billion.
Registrations, which have been facilitated by a liberalisation of the regulatory restrictions governing private generation, surged in 2022 and 2023, and spiked at over 2 400 MW registered in the first quarter of 2023 as loadshedding intensified. The latest quarterly registrations are more or less in line with the capacity registered in the last quarter of the 2023 calendar year.
The average investment cost for the latest batch of registered projects is R23 374/kW, Nersa said.
The 105 registrations include solar PV, a solar PV generator combined with battery energy storage, a wind turbine, cogeneration and gas, with solar PV comprising 99 of the facilities, which have a total capacity of 499 MW and an investment cost of R9.9-billion.
Nersa's Nhlanhla Gumede reiterated his concern about the high number of registered facilities not coupled with storage.
The highest number of newly registered generation facilities are in Gauteng (24), Western Cape (22) and Free State (13), with the top three provinces by capacity being the Western Cape (213 MW), Northern Cape (152 MW) and North West (142 MW).
Seventy-seven generation facilities, with a combined capacity of 664 MW, are connected to the Eskom network, while 28 generation facilities are connected to the municipal distribution network and have a capacity of 124 MW.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
Eskom Transmission CEO Segomoco Scheppers says he believes the "pieces are falling into place" that will allow the power utility to "ramp up and move faster" in expanding the country's constrained power grid.
Grid expansion will enable Eskom and independent power producers to bring much-needed new generation capacity online.
Eskom's Transmission Development Plan (TDP), issued in October 2022, comprises more than 300 projects to expand the grid. It focuses on the need for the extensive expansion of transformer capacity at substations, as well as the construction of new transmission lines, at some 14 000 km in the next ten years.
Speaking at Enlit Afria 2024, held in Cape Town this week, Scheppers said that Eskom had, however, identified 47 quick-win projects that would allow it to connect roughly 37 GW of new generation capacity.
A significant number of these - 25 - revolved around strengthening existing substations by bringing onboard new transformers.
"That programme will allow us to connect 13 000 MW of new generation," said Scheppers.
The balance of these expedited projects - 22 - was a mix of line and substation work that would allow Eskom to connect 34 000 MW of new generation capacity.
"When you look at the development of these projects, we talk about a project lifecycle-model where you conceptualise the project and the definition phase where you deal with the designs and the environmental approvals, and out of that you reach execution phase when you make the final investment decision," noted Scheppers.
"Compared with financial year 2023, when there were five projects in the definition phase, in the last financial year, that number jumped to 22 - just to put emphasis that we are driving to develop these projects to get approval and to move into execution."
"In terms of execution and actual construction and procurement…in financial year 2023 there were zero projects that went into that process from this programme," said Scheppers. "But, in the last financial year, 11 projects have gone through that programme."
Scheppers added that 14 firms had been appointed to help Eskom with the "upfront work in terms of project preparation to supplement our own skills".
He also emphasised that it was critical for Eskom that have access to "certain supplies and commodities, specifically transformers".
"We have the approvals in place to put a framework agreement in place. Of the seven or so major suppliers, two have already signed contracts, and we expect the balance to be concluded this year.
"So, access to these transformers will be readily available going forward, which will help us speed up implementation."
In terms of transmission line construction, Scheppers said Eskom had adopted an engineering, procurement and construction model, which differed from its previous approach.
"As for the matter of securing servitude, the right to construct and traverse private property and government land have been a huge challenge for the longest time," said Scheppers.
"In this regard we have successfully worked with the Department of Public Enterprises and Department of Public Works and Infrastructure to expropriate land, at market-related compensation, with exception, and where required."
Scheppers also noted that the multibillion-rand debt solution offered to Eskom, in which government had taken on R254-billion rand of the utility's debt over the medium term, had allowed the Transmission business to gain access to the necessary capital to invest in infrastructure.
"But, clearly, as we move towards being a separate company, we would need to work with the regulator to ensure we secure the revenue stream that fundamentally underpins all the investment that needs to be made."
The unbundling of Eskom into three entities will see the formation of the National Transmission Company of South Afr

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation.
Transnet Freight Rail (TFR) CEO Russell Baatjies has added his voice to industry-wide concerns being expressed about the high rail tariffs that would arise should the methodology included in a draft Network Statement be implemented.
The Network Statement was released for public comment in March by Transnet's interim Infrastructure Manager (TRIM), which is being separated from the Transnet Freight Rail Operating Company, or TFROC, which Baatjies oversees.
As with any private train operating company, TFROC would be subjected to the same tariff methodology, about which customers and potential private operators have also expressed their anxiety.
Speaking during the launch of the Multimodal Inland Port Association (MIPA), Baatjies confirmed that TFROC had made a presentation to the Interim Rail Economic Regulatory Capacity (IRERC), which is considering the Network Statement, outlining TFROC's unhappiness with the tariff.
"We think it's very high and we don't think you will have significant growth if we go with that tariff," he said during the virtual event, which was hosted by the Transport Forum.
IRERC is expected to consolidate the comments received by stakeholders and prepare recommendations for consideration by the Transport Minister prior to the Network Statement being approved. In future, an independent Transport Economic Regulator will regulate both tariffs and access to the rail network, with the TRIM being the owner and operator of the network.
Baatjies insisted that "Chinese walls" had already been built between TRIM and TFROC, with the brand identity of the latter likely to be changed in the not-too-distant future to underline the distinction between the two entities that have hitherto been vertically integrated under TFR.
In response to a question posed by MIPA chairperson Warwick Lord above the level of independence of the TRIM, Baatjies responded that the separation was already being treated internally as entrenched.
As head of TFROC he had not signed-off on the draft Network Statement, which was approved instead by Transnet CEO Michelle Phillips, to whom the TRIM executives were also reporting.
"With the Network Statement, for instance, I did not sign off … and as TFROC, the operating company, we also had our comments about the Network Statement and some things that we think should be relooked at, for instance the tariff.
"[But] instead of influencing the process from inside, we are seeking to ensure that we keep the independence, and we are following the same process that other train operating companies will have to follow," Baatjies said.
Speaking on the same platform, GAIN Group director and emeritus professor at Stellenbosch University, Jan Havenga, also underlined the unaffordability of the tariff, which he attributed to Transnet's unsustainable debt levels and the large maintenance backlog.
"No company on its own can fix this, not if you have R130-billion-worth of debt, half of which is State capture debt … the government needs to step in," Havenga averred.
Baatjies also used the platform to signal Transnet's eagerness to integrate intermodal inland ports to improve the efficiency of rail and port operations, as well as to redirected rail-friendly cargo back from road.
He highlighted the success that had already been achieved in the manganese sector through collaboration between inland and back-of-port terminals, which had resulted in yearly export volumes rising from five-million tons to 15-million tons.
Lord said that MIPA had been established with the specific aim of supporting the movement of cargo from road to rail via inland ports, where freight volumes could be consolidated to lower overall distribution costs and improve capacity on existing networks.

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 Presidency does not anticipate that Eskom's move to reserve scarce grid capacity for independent power producers (IPPs) participating in public procurement bidding rounds will disrupt the more than 130 private IPP projects being advanced outside of those processes to supply private consumers.
Speaking during a briefing convened to report back on the reforms implemented under Operation Vulindlela, including those undertaken to address South Africa's loadshedding crisis, the Presidency's project management unit head Rudi Dicks lauded the progress being made through the Energy One Stop Shop to support the private projects stimulated by the reform to allow grid-connected private projects of any size to proceed without a licence.
The pipeline of such projects had increased significantly and currently represented a combined capacity of 22.5 GW and an estimated investment value of R390-billion.
The projects, he stated, were also additional to those that would be bid as part of various public procurement processes being advanced in line with Section 34 of the Electricity Regulation Act, where Ministerial determinations had been issued for the procurement of about 10 000 MW of wind, solar PV and gas-to-power generation, as well as battery energy storage.
Asked by Engineering News whether private IPP investment could be undermined by Eskom's application to the National Energy Regulator of South Africa for permission to discriminate in favour of Section 34 IPPs Dicks said: "This does not impact on the existing 22 500 MW pipeline, as many of [those projects] have already been through [the process of securing grid connection] budget quotes."
He argued, too, that Eskom was not seeking to preserve capacity across the entire grid system, but rather to ensure that there was sufficient grid capacity for wind projects in light of the disappointment of Bid Window Six (BW6) of the Renewable Energy Independent Power Producer Procurement Programme, when no wind IPP was selected for the 3 200 MW initially allocated.
This failure was attributed to the fact that the grid capacity that formed the basis for the bids by wind IPPs that submitted BW6 bids was allocated to private IPPs, which were allocated that same capacity under Eskom's prevailing 'first come, first served' grid-access rules. These have since been adjusted under Eskom's 2023 Interim Grid Capacity Allocation Rules to 'first ready, first served'.
Defending Eskom's application for permission to reserve grid for public procurement, Dicks said: "It is important for us, in terms of broader public interest, that we ensure that we don't have a similar situation that happened during Bid Window Six, where [Bid Window Seven] potentially fails."
Earlier this year, the deadline for bid submissions under BW7 was extended by a month to May 30 to accommodate both grid-connection uncertainty and a curtailment addendum to the Grid Capacity Connection Assessment (GCCA 2025) published by Eskom in January.
The GCCA 2025 addendum states that 3 470 MW of additional grid capacity to connect wind generation will be made available by accepting a "reasonable share of no more than 10% of curtailment". A total of 2 680 MW of this capacity is available in the Western Cape and 790 MW in the Eastern Cape.
Dicks would not be drawn, meanwhile, on whether President Cyril Ramaphosa would sign the Electricity Regulation Amendment Bill, some aspects of which have been criticised, following its passing on May 16 by the National Council of Provinces.
However, the Operation Vulindlela 'Phase 1 Review' document published on May 22, specifically outlines the priorities for electricity reform "following the passage of the Electricity Regulation Amendment Bill".
It states that, during the "next phase" reform will focus on completing the restructuring of Eskom, establishi