International climate deal could solve SA’s energy and economy crisis

Some of the world’s richest nations recently met with South African cabinet ministers to discuss a climate deal that could see billions of dollars put toward ending the country’s dependence on coal.

The delegation is trying to hammer out an agreement that can be announced at the COP26 climate talks, which start in Glasgow, Scotland on 31 Oct, two people familiar with the talks said. The discussions with South Africa — the world’s 12th-biggest emitter of greenhouse gases — include representatives from the US, UK, Germany, France and the European Union.

While South Africa is under pressure to cut its dependence on coal, which accounts for more than 80% of its power generation, it needs finance to facilitate the transition to cleaner energy. Developed nations may also need to find a way to address the challenges faced by South Africa’s state-owned power utility, which is burdened by R400-billion of debt.

The envoys met with South African ministers including Pravin Gordhan, the public enterprises minister whose portfolio includes oversight of power utility Eskom Holdings, Barbara Creecy, the environment minister, and Ebrahim Patel, the country’s trade and industry minister, the people said, asking not to be identified as a public announcement has yet to be made. Talks will be held with South Africa’s politically powerful labour unions, business leaders and the Presidential Climate Change Coordinating Commission, three people familiar with the arrangements said.

The South African ministers pressed for details on what finance was available, but the envoys favour an incremental approach and more commitments from South Africa, the people said. While Gordhan urged support for Eskom, other options such as transitioning South Africa and its car industry toward electric vehicles were also discussed, they said.

Albi Modise, a spokesperson for the environment ministry, confirmed that a group of ministers met with the envoys but declined to comment further, saying a statement will be issued later. 

Some senior members of South Africa’s government are pushing hard for climate mitigation measures. President Cyril Ramaphosa chairs the climate commission he created last year and its more ambitious emissions reduction target was adopted by cabinet this month. Creecy has said developed countries need to boost energy transition and climate-adaptation funding to developing nations.

“South Africa is well-positioned to obtain concessional finance both for the country-wide climate transition and the electricity transition in particular,” Gordhan said in a response to queries before the meeting.

Still, the pivot from coal faces opposition within South Africa. Gwede Mantashe, the country’s energy minister, has advocated for the construction of new coal-fired power stations. Mantashe, the former head of the National Union of Mineworkers, is the politically influential chairman of the ruling African National Congress.

The move to reduce South Africa’s reliance on coal comes as Chinese demand pushes prices toward record highs. The dirtiest fossil fuel, which was struggling against cleaner energy sources, is now seeing its biggest comeback ever, complicating international climate talks set to begin in just a few weeks. 

Courtesy of Bloomberg.

BY: BLOOMBERG

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By Jason van der Poel, Alexandra Felekis & Mzukisi Kota from Webber Wentzel (With technical input from Andrew Johnson of Zutari)

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Mineral Resources and Energy on new bidders for the RMIPPP Programme

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The additional Preferred Bidders announced by the Department are as follows:

Project NameEvaluation Price (ZAR)Contracted Capacity (MW)Location(Province)TechnologyJobs Years to be created for RSA Citizens
Scatec Kenhardt 21 884.6150.00Northern CapeSolar Photovoltaic and Battery StorageConstruction – 605 Operations – 1 051
Scatec Kenhardt 11 884.6450.00Northern CapeSolar Photovoltaic and Battery StorageConstruction – 605 Operations – 1 051
Scatec Kenhardt 31 884.5650.00Northern CapeSolar Photovoltaic and Battery StorageConstruction – 605 Operations – 1 051

The three additional preferred bidder projects will add a total of 150MW to the national grid, bringing the total megawatts procured under the RMIPPPP to 1995.76MW. These projects will be required to achieve Financial Close by the end of September 2021.

The RMIPPPP bid window was released to the market in August 2020, following the promulgation of the Ministerial Determination of 2 000MW, with concurrence from NERSA. The main objective of the bid window is to meet the supply gap indicated in the Integrated Resource Plan (IRP2019), and reduce the extensive utilisation of expensive diesel-based peaking electrical generators in the medium to long term. The Request for Proposals (RFP) for the RMIPPPP allowed for a portfolio approach whereby a developer could bid on a portfolio of facilities, which will constitute one project. This approach has attracted a combination of technologies and facilities at the same or different geographical locations.

Courtesy: www.gov.za

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This transaction is strategic and complementary to both Mulilo and STANLIB. It provides Mulilo with a robust financial partner that has an appetite to invest in new developments and planned growth. Similarly, it offers STANLIB access to a leading South African renewable energy platform with a strong development pipeline, of close to 3 gigawatts (GWs) of large-scale wind and solar PV projects.

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Additionally, Mulilo is involved in several projects that provide clean energy to large industrial and commercial energy users, across the country.
The renewable energy market in South Africa is set to exponentially grow over the next decade in line with the gazetted 2019 Integrated Resource Plan (IRP), which outlines increased allocations for both wind and solar PV power, up to 2030.

Longyuan Mulilo De Aar Wind Energy Facility

Furthermore, with the expected decommissioning of over 24 GWs of coal power plants, in the period beyond 2030 to 2050, the country’s IRP has further opened up opportunities for the renewable energy sector to support the country’s post-Covid-19 economic recovery plan.

Mulilo is one of South Africa’s largest renewables groups with a combined operational capacity of close to 500 MWs of solar PV and wind projects. It has a development pipeline of renewable energy projects of 3 GWs in South Africa and regularly participates in opportunities on the rest of the African continent. Part of the company’s growth strategy is to actively pursue the acquisition of equity stakes, in operating renewable energy projects.


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