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Engineering News Online provides real time news reportage through originated written, video & audio material. Now you can listen to the top three articles on Engineering News at the end of each day.

  1. 2D AGO

    Nersa aims to make ferrochrome tariff call by end May as it launches public consultations

    The National Energy Regulator of South Africa (Nersa) has set aside May 25 for public hearings into Eskom's application to amend negotiated pricing agreements (NPAs) with Samancor Chrome and Glencore-Merafe Chrome Venture. The adjudication process potentially opens the way for the implementation of the 62c/KWh tariff offer that Eskom has made to the two ferrochrome producers for a period of five years, possibly starting in June. Nersa has published a consultation paper to guide those wanting to make written and/or oral submissions, with a May 22 deadline set for the submission of written comments and with a decision scheduled for May 29. Initially Nersa indicated that it would finalise its adjudication of the NPA amendments by the end of June, but there have been persistent calls for it to complete the process sooner. In its application, Eskom has proposed that the revised tariff framework take effect from the first day of the calendar month following approval by Nersa and apply to six Samancor and four Glencore ferrochrome smelters. Eskom made the 62c/kWh offer in early April, following negotiations on the terms and conditions associated with the amended NPAs. Prior to the offer, the two ferrochrome producers indicated that they were planning to close smelters and retrench workers because of uncompetitive tariffs, especially when compared with tariffs in China, which is now a major source of demand for South African chrome ore. Electricity accounts for about 40% of the overall production costs at the smelters and as electricity tariffs surged over the past number of years much of South Africa's smelting capacity has closed, despite the country holding up to 80% of the world's chrome ore reserves. In January, Nersa approved an interim 87c/kWh tariff in favour of the companies after they invoked hardship clauses in their prevailing NPAs that were implemented at the start of 2024 at a tariff of 136c/kWh; already well below Eskom's approved standard tariff of about 250c/kWh. However, the ferrochrome smelters argued that a 62c/kWh tariff was needed for them to remain competitive. BEYOND FERROCHROME? There is likely to be much interest in the deal, which Eskom describes as a load-retention and system-optimisation measure, as the State-owned company has indicated that it will consider amending NPAs with other electricity-intensive companies in future. The consultation paper states that the deal will preserve some 12.8 TWh, the loss of which would have "irreversible revenue impacts for Eskom". Various companies have already called on Eskom to extend similar tariff offers to all ferroalloy smelters, while South32 and Eskom have jointly confirmed that they are in discussions on a long-term electricity supply solution for the Hillside aluminium smelter, in KwaZulu-Natal. The hearings are also likely to attract stakeholders that are less supportive of providing industrial customers with relatively cheap electricity, especially while poor households and smaller businesses also face major affordability problems. Assurances will also be sought from Eskom that neither the taxpayer nor other electricity customers will be worse off as a result of the deal. Previous NPAs have typically been paid for by standard-tariff customers, while taxpayers have also helped keep the utility afloat, with Eskom currently being supported by means of a R230-billion debt relief package extended to it by the National Treasury. Eskom insists that the deal will be "ringfenced" and will not affect other customers, and has also argued that retaining large industrial customers through discounted tariffs will help it shore up flagging demand at a time when it has surplus capacity. This, partly owing to the recovery of its coal fleet and partly because demand has fallen as more businesses and households have installed solar and battery systems. Board member Clive Le Roux argued recently that the State-owned company will be better off financially by selling electricit...

    4 min

  2. 2D AGO

    Sasol optimistic of market demand for Natref's premium SAF and renewable diesel

    Energy and chemicals group Sasol, which recently secured product-sustainability certification for jet fuel and diesel produced from used cooking oil and vegetable oils at its Natref refinery, says any potential ramp-up to 200-million litres, or beyond, will now depend on market demand. Business building, strategy and technology executive VP Sarushen Pillay tells Engineering News that an onsite audit by TÜV SÜD confirmed that Natref is able to produce products classifiable as a sustainable aviation fuel (SAF) and renewable diesel in line with International Sustainability and Carbon Certification, or ISCC+. These certified fuels, which trade at a premium relative to traditional jet fuel and diesel, will be marketed to airliners facing tightening sustainable-fuel mandates, as well as mining, logistics and corporate entities seeking to reduce their carbon footprints. "The concept now is to sell the SAF produced at Natref to global airliners that are seeking to claim carbon credits, and which refuel at the OR Tambo International Airport," Pillay says. He is also optimistic that its 'drop-in' renewable diesel could prove attractive to mining and other entities looking for new avenues to accelerate their decarbonisation over-and-above their ongoing transition to renewable electricity so as to reduce the exposure of their exports to carbon border levies. The Free State refinery has a nameplate capacity of 108 000 bl/d and Pillay says that, with no or low capital investment, up to 15% of that capacity could be deployed in future to produce hydroprocessed esters and fatty acids, or HEFA, fuels. However, the initial ramp-up will be modest, with about two-million litres this year, 16-million litres next, and with the far higher production target planned for the end of the decade. Asset transformation VP Vimal Bhimsan reports that the certification process confirmed the greenhouse gas (GHG) intensity of SAF produced with used cooking oil to be 22 gCO2eq/MJ, more than 75% lower than the 94 gCO2eq/MJ associated with jet fuel from crude. It also showed the GHG intensity of renewable diesel derived from used cooking oil to be 23 gCO2eq/MJ, compared with 94 gCO2eq/MJ for diesel derived from crude. Bhimsan stresses that the certification also involves the measurement of the full value chain, including water use to grow the crops that may be employed in future, such as potentially using vegetable oil derived from Solaris and Moringa crops. Sasol, Anglo American and De Beers are piloting the production of vegetable oils from Solaris and Moringa plantations on degraded mining land, while also utilising treated acid mine drainage. The immediate focus at Natref, however, is on securing used cooking oil that is already being collected and aggregated domestically, but which is mostly being exported to Europe for reprocessing. Chemicals Certification In addition, certain chemicals produced at Secunda using bioethanol as an input have also been certified, notably monomers that are used in downstream chemical products such as plastics, acrylates and solvents. Sasol, which is looking to reduce Secunda's massive carbon footprint, believes there is potential to source far more bioethanol from the South African sugar industry, which is in search of new sources of demand to provide a lifeline to a sector that is in distress. Bhimsan acknowledges, though, that this will require a coordinated national effort to facilitate the investments that will be needed to upscale production. Meanwhile, Sasol is also assessing the potential to buy some of the wood chips currently being exported through Richards Bay for use in its Secunda gasifiers to produce lower-carbon chemicals. The JSE-listed group is also participating in the Hyshift Consortium that is aiming to produce SAF using green hydrogen in its existing Fischer-Tropsch reactors. However, producing such power-to-liquid fuels as Secunda would not currently meet Europe's Renewable Fuels of Non-Biological Origin c...

    5 min

  3. 5D AGO

    The case for EVs is strengthening as diesel volatility increases – Everlectric

    The economics of diesel vehicles have become increasingly unstable, says Everlectric chief commercial officer Paul Plummer. "For years, the debate around electric vehicles (EVs) in South Africa has focused on whether the technology works. That question has largely been answered. "The real question now is this: why would fleet operators continue to rely on a cost base in their business that is fundamentally unpredictable?" Fleet solutions group Everlectric currently manages more than 200 EVs across multiple commercial fleet clients in South Africa. Fuel prices are no longer a predictable input, says Plummer. "They are a moving target, driven by global events that have nothing to do with your business, your routes or your customers." At lower diesel prices, EVs – typically still more expensive that internal combustion engine vehicles – require higher use to make sense, explains Plummer, "A few years ago, you needed to be running relatively high monthly kilometres before the numbers started to work in your favour. "That is where much of the early hesitation to migrate to EVs came from." But, as diesel prices continue to rise, that break-even point is dropping rapidly, notes Plummer. "At around R22 a litre – roughly where the diesel price sat during more stable periods – an electric one-ton-equivalent vehicle typically becomes competitive once you operate it approximately 3 000 km a month. "When the diesel price moved to R28 a litre, the picture changed significantly. "That same vehicle now starts to make financial sense at closer to 2 000 km a month. "At that point, you are moving from mere good-use cases to mainstream fleet operations," says Plummer. Push diesel into the mid-R30s, which is well within reach in the current environment, and the economics change again, as the break-even point drops to well below 1 000 km a month. "At that level, almost any consistently used electric commercial vehicle starts to make sense," says Plummer. It is not that EVs have become cheaper, he adds. "As fuel prices rise, the number of kilometres you need to justify an EV falls sharply. "And, the higher the volatility, the faster that crossover happens." On a typical urban route running around 4 000 km a month, the cost difference is difficult to ignore, believes Plummer. "At current diesel price levels, fleet owners can save several thousand rand per vehicle per month. If fuel prices continue to increase, however, those savings become even more compelling."

    2 min

  4. 6D AGO

    Terence Creamer talks about Govt sets ambitious goal in draft rail masterplan

    Engineering News editor Terence Creamer discusses the current state of South Africa's passenger and freight rail systems, as well as the ambitious goal set out in the Draft National Rail Master Plan – now out for public comment – to position rail as the backbone of South Africa's

    10 min

  5. 6D AGO

    Draft masterplan outlines R2-trillion vision for restoring rail as 'backbone' by 2050

    The Draft National Rail Master Plan released by Transport Minister Barbara Creecy for public comment outlines an ambitious R2-trillion vision for repositioning South Africa's underperforming rail sector as the "backbone" of the country's logistics and transport system by 2050. Cabinet approved the release of the draft for public consultations on April 1 and on April 23 the document was unveiled by Creecy at a well-attended function, hosted at Transnet Freight Rail's campus in Esselen Park, in Gauteng. Consultations are scheduled to continue until the end of July, with in-person events planned for all nine provinces during the course of May and June. In addition, the Department of Transport has launched a Web portal that provides access to the draft plan, its source documents and associated maps, as well as a page through which comments can be submitted. The draft document includes a frank assessment of the poor state of the rail network over the past several decades, which has resulted in a precipitous decline both in freight volumes and the number of commuters that use rail. It estimates that over 100-million tons of freight have been lost to road, while commuter rail ridership last peaked in 1997, with current services constrained by a lack of signalling systems, which were seriously vandalised during Covid. "Currently approximately 165-million tons of freight are moved on our rail system annually. Research indicates that market appetite for rail freight transportation is closer to 280-million tons," Creecy highlighted, having set a 250-million-ton yearly target for 2030. Passenger Rail Agency of South Africa (PRASA) ridership numbers, meanwhile, recovered to above 100-million last year, but remain well below both historic levels and the 600-million target set for restoration. "The unintended consequence of this underperformance by our rail network includes loss of foreign exchange earnings, and job losses when mining and agricultural products cannot be affordably and timeously exported," Creecy added, while also highlighting the negative effects on road congestion and safety. She stressed that there was no intention for rail to displace other modes of transport, with trucks, buses and minibus taxis remaining central to the future ecosystems. Instead, the aim was to "rebalance" road-to-rail freight distribution, through a 'brownfield' approach that optimised existing rail infrastructure and targeted 'greenfield' expansions to help improve the efficiency and cost-competitiveness of South Africa's logistics system. The draft masterplan includes several far-reaching proposals for meeting these objectives, including: rationalising freight rail networks to focus on high-density and high-value corridors, with branch lines with limited commercial viability being repurposed or closed; transitioning key parts of the national rail network to standard-gauge by 2050, to overcome the constraints associated with running rapid, high-volume services on narrow-gauge networks; facilitating private sector investment and participation to improve efficiency, enhance service delivery, and boost infrastructure development; modernising passenger rail by emphasising an expansion of capacity, improving safety and reliability, and using technology to enhance the customer experience; and encouraging adaptability to changing economic conditions, including the closure of unprofitable lines and the introduction of new services to meet emerging market needs. Transnet CEO Michelle Phillips and PRASA CEO Hishaam Emeran both welcomed the release of the draft masterplan, with Phillips attributing rail's underperformance partly to fragmentation and a lack of previous coordination and Emeran arguing that it was an opportunity to propel rail into the future. The release was also endorsed by Toyota South Africa Motors CEO Andrew Kirkby, representing organised business at the launch, Kganki Matabane, of the Black Business Council, the World Bank's Dr Bernard Ari...

    4 min

  6. APR 22

    New policy paper to offer 'single window' into South Africa's electricity reform agenda

    Electricity and Energy Minister Dr Kgosientsho Ramokgopa reports that government is finalising an electricity reform policy paper in a bid to offer a "single-window overview of the sector's reform agenda". Speaking at the release of Eskom's 2026 winter outlook for the system, which indicates that there should be no loadshedding over the period, the Minister described the paper as long overdue and revealed it had already been drafted by his department. The document would be presented to Cabinet in the coming weeks after which it would be published for public comment. The paper would be a "coherent policy statement" of the transformation envisaged for the electricity supply industry and would also provide a benchmark against which progress could be measured. Ramokgopa made a point, however, of stressing the complexity of the reforms already taking place and insisted that there would be no "big bang" but rather a phased transition towards a more competitive market. "As days go by, and as we have an appreciation of some of the moving parts, I think it will dawn on everyone that this is a very complex process. But we are committed to it," Ramokgopa said. His statement comes amid ongoing tensions over the pace of the reforms, as well as the unbundling of Eskom. Some Eskom trade unions have embarked on protest marches against the restructuring, while President Cyril Ramaphosa used his State of the Nation Address in February to insist that the new State-owned Transmission System Operator (TSO) should also house the transmission assets. This, after Eskom unveiled a plan that involved the retention of the assets by its National Transmission Company South Africa (NTCSA) subsidiary. TASK TEAM PROGRESS? Ramaphosa has since established an Eskom Restructuring Task Team to lead the transition toward a fully independent State-owned TSO and Eskom CEO Dan Marokane confirmed that Eskom was participating in the structure. "The task team set up by the President is in motion, and the task team will, in due course, make announcements in terms of its progress. It is addressing the directive that the President has issued, " Marokane said. The Operation Vulindlela quarterly report, which was also released on April 22, highlighted the establishment of the task team as representing reform progress during the period. However, it indicated that a detailed implementation plan for the establishment of the TSO and implementation measures to ensure functional independence of the NTCSA during the transition period would be finalised only by August, signalling a delay against the three-month deadline set by Ramaphosa in February. Besides Eskom's unbundling, there is also unease over the electricity trading rules currently being drafted by the National Energy Regulator of South Africa (Nersa), which decided not to release the latest draft following various adverse pre-release comments. The launch of the South African Wholesale Electricity Market (SAWEM) has also been delayed until the third quarter from an initial April launch date, while reforms aimed at improving the sustainability of the electricity distribution sector and addressing rising arrear debt have not yet been fully endorsed. NTCSA CEO Monde Bala said the SAWEM platform had been launched internally in April, with Eskom Generation and Eskom Distribution as the only participants, while outlining regulatory steps that were still required to finalise the market code and rules. Eskom board member Clive Le Roux, meanwhile, argued that South Africa's electricity future required an orderly rules-based transition to a competitive and diversified market. "This means clear wholesale and retail market rules, fair and transparent cost recovery, protection for vulnerable consumers, and accelerated transmission grid expansion to unlock new generation," Le Roux said. Bala offered an update on the implementation of the Transmission Development Plan, showing that only 270.8 km of new powerlines were built in 2025/26...

    4 min

  7. APR 20

    Industry body confirms shift in sources of South African fuel imports

    The Fuel Industry Association of South Africa (FIASA) has confirmed that fuel imports for the period from April to June will increasingly be sourced from regions outside of the Gulf and that there is also daily monitoring of stock levels and vessel movements to ensure ongoing security of supply. CEO Avhapfani Tshifularo tells Engineering News that various actions are being taken in response to the disruption to shipping in the Strait of Hormuz and the damage to energy infrastructure in the Gulf region. He reports that the domestic fuels industry has implemented coordinated, short-term security-of-supply responses focusing on logistics, diversification, and stock management, including: Forward-securing of import cargoes for April to June 2026, with shipments increasingly sourced outside the Arabian Gulf, including West Africa, the Atlantic Basin and Asia; Tight daily monitoring of stock levels and vessel movements at a national level, coordinated with the Department of Mineral and Petroleum Resources (DMPR) and Transnet; and Close coordination with government through emergency forums to avoid panic-driven buying and ensure equitable distribution. "FIASA has repeatedly stated that the risk is logistics – and price-driven – not an absolute absence of fuel molecules, but that the disruption could become protracted if the Hormuz instability persists," Tshifularo adds. He also confirms that current sourcing of refined fuels (including diesel, petrol and jet fuel) is from the Middle East, India, Singapore, and increasingly the Atlantic Basin, while crude is being sourced from Nigeria, Angola, Ghana, Saudi Arabia and Brazil. In a separate interview, DMPR deputy director-general for mineral and petroleum regulation Tseliso Maqubela has confirmed a dramatic shift in South Africa's sources of supply towards the Atlantic Basin, with fuel being secured not only from traditional European suppliers but also Brazil, Mexico and the US. Maqubela reports that the department is, therefore, reviewing the Basic Fuel Price (BFP) formula for diesel, and is considering changes to align the BFP to the new sources of supply, with the current formula heavily weighted to reference markets in the Gulf region. This, he says, should ensure that the cost of importing diesel from the new source markets is more accurately reflected and could in turn help address the pricing mismatch that is motivating some wholesalers to implement diesel surcharges. Tshifularo confirms, meanwhile, that South Africa is not facing any supply constraints in the area of jet fuel, indicating that domestic refineries have played an important role in complementing the supply of jet fuel. He has refrained from commenting on what other policy actions the industry is proposing to government to help soften the impact of higher prices on consumers and the economy. In April, government announced a temporary R3/l reduction in the general fuel levy and confirmed the creation of a Cabinet task team to assess immediate and more medium-term responses to the crisis. There is growing concern about the price of diesel, which Tshifularo says is more affected than other fuels, as the global diesel price is trading at high levels and its availability is constrained. "There are measures being considered, but the government will announce its decisions when they are finalised," Tshifularo says. "In the short term, the fuel levy decision is welcomed and, in the mid-term, the country needs strategic stocks for finished products," he adds, noting that there is currently no buffer stock. Maqubela says that government is aware that the current storage capacity for final product is insufficient and reports that it is assessing what should be held as commercial stocks by the fuel industry, what government should hold in addition, and how those costs should be recouped.

    3 min

  8. APR 17

    Terence Creamer talks about: South Africa's response to the global energy crisis

    Engineering News editor Terence Creamer discusses the ongoing conflict in the Middle East and indications that the global energy crisis may be more prolonged than initially hoped, as well as how South Africa might respond to this challenge.

    10 min
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Engineering News Online provides real time news reportage through originated written, video & audio material. Now you can listen to the top three articles on Engineering News at the end of each day.

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