Construction World March 2020

COMMENT

Investment and infrastructure will always be sensitive to factors such as macro-economic conditions, commodity prices, political climates and the cost of finance. Despite this, the need for essential services is constant. This anchors the hope that it is just a matter of time before the construction industry, particularly civil engineering, makes an upturn.

O ne such essential service is that of electricity. Despite the continued load- shedding the county is experiencing, this is also directly accelerating the need for more renewable (and sustainable) facilities. In mid-February 2020, the Minister of Mineral Resources and Energy, Gwede Mantashe announced the Section 34 Ministerial Determinations required for the procurement of the new electricity capacity outlined in the Integrated Resource Plan 2019 (IRP 2019). $V VRRQ DV WKLV ZDV ͤQDOLVHG procurement would be initiated, including WKH ͤIWK ELG ZLQGRZ IRU WKH 5HQHZDEOH Energy Independent Power Producer Procurement Programme (REIPPPP). In this programme government had procured 6 400 MW of renewables capacity since 2011 across 112 separate projects, with a combined investment value of more than

R200-billion. However, the programme stalled in 2015 after Eskom refused to enter into new power purchase agreements (PPAs) with independent power producers (IPPs) on the basis that it had ‘surplus capacity’. In 2018 Government instructed Eskom to sign PPAs with 27 IPPs whose projects had been procured in 2014, prior to the programme having stalled. These agreements expired in 2015 and Eskom subsequently wanted the tariffs for renewable projects to be renegotiated. In 2019 South Africa experienced load- shedding comparable to the rolling blackouts of 2008 which highlighted the urgency to get renewable capacity off the ground as soon as possible. Capacity outside Eskom On 13 February President Cyril Ramaphosa

announced that steps would be taken to increase generating capacity outside Eskom. The IRP 2019 that was issued in October last year outlines how the country plans to procure 14 400 MW of new wind, 6 000 MW of new solar PV, 2 088 MW of energy storage, 2 500 MW of imported hydro, 3 000 MW of gas and 1 500 MW of new coal energy by 2030. Could this be an indication that the country will soon see an increase in similar infrastructure development? I hope so. Wilhem du Plessis Editor

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EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & GRAPHIC ARTIST Katlego Montsho CIRCULATION Karen Smith

PUBLISHER Karen Grant

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CONSTRUCTION WORLD MARCH 2020