Electricity and Control August 2024

ENERGY MANAGEMENT + THE INDUSTRIAL ENVIRONMENT

be constructed and connected to the nation al grid within 24 months post-commercial close. In addition, in terms of battery energy storage, BESIPPPP BW2 calls for 615 MW of BESS in eight storage facilities located near specifically selected transmission substations in the northwest supply area. The Gas IPP Procurement Programme (BW1) calls for 2 000 MW of gas-to-power land-based electricity generation facilities using natural gas within South Africa. Mzungu highlights that these different programmes are running in parallel in terms of implementation. “Currently, we are assist ing clients to navigate the various policies and programmes and their implementation timeframes. Many clients simply require ad

The firm offers clients advice and support through all stages of project development and asset management.

ahead. “We are just starting to see the rollout. Massive investment is needed in the transmission network over the next five to ten years, as Eskom has outlined in its Transmission Development Plan,” Mzungu notes. “Here the funding will come largely from the private sector in terms of Engineering, Procurement and Construction (EPC). This will provide a comprehensive managed approach to streamline the construction process and deliver high-quality results on time and within budget,” he says. Project management and support He emphasises too that a lot of work goes into getting a project to a point of financial viability. For example, in BW6, the emergency procurement round, many projects did not even reach financial close. “This entails financial, legal, and technical aspects and we help clients get there. Once a project reaches financial close, things tend to run more smoothly,” says Mzungu. “We only supply the technical input; clients secure an external financial partner with a financial model based on the energy tariff required for that project to be viable.” Looking at the larger energy security picture for its cli ents, Mzungu says it has stabilised somewhat, with a more positive outlook going forward. “This is a result of invest ments from both the public and private sectors,” Mzungu says. And he adds that demand on the national grid is lower due to large-scale investment in renewable energy in res idential, commercial and industrial sectors, giving Eskom much-needed breathing room. “The problem has been meeting demand, so if demand drops, it provides part of the solution. Eskom is also steadily improving the Energy Availability Factor (EAF) at its coal-fired power stations, though it is not yet where the utility wants it to be. Private sector players are making a major contribution to resolving Eskom’s immediate issues.” Economies of scale are making the latest renewable technology more affordable for big and small players; systems can be implemented more cost-effectively. And,

vice. At Zutari, due to our history and experience in this sector, we offer expert guidance as we have played a sig nificant role in REIPPPP since its inception.” The ‘push-and-pull’ tension in the energy transition and decarbonisation relates primarily to South Africa’s history of coal-fired power generation. “The reality is we still need our coal-fired baseload for the foreseeable future,” Mzungu says. “The IRP 2023 still includes coal up to 2030. So, it is important for clients to get a handle on the best solution for their businesses and for the country. It does not have to be the newest technologies; it can be an adaptation of existing technologies and alternative resources. For example, unlike the rest of the country, the Western Cape has abundant hydro and pumped energy storage resources, which are ‘old school’ but highly effective renewable energy technologies.” Wheeling energy The advent of energy wheeling is another new develop ment. This enables the transmission of privately generated renewable energy across the national grid to clients locat ed in different parts of the country. For example, mines are procuring power directly from private developers, but the major bottleneck at present is the state of the transmission network. Mzungu sees the unbundling of Eskom as a crucial step. He notes that the National Energy Regulator of South Africa (NERSA) allowed Eskom to transfer control over IPPs to the National Transmission Company of South Africa (NTCSA). The NTCSA, now formally constituted as a separate entity wholly owned by Eskom Holdings, will serve as Eskom’s transmission subsidiary. “The official establishment of the NTCSA marks progress towards achieving the functional separation of Eskom’s business into distinct generation, transmission and distri bution entities. The unbundling process is a critical step in ensuring more efficient and effective management of South Africa’s power supply,” Mzungu says. It means that new build transmission projects can move

AUGUST 2024 Electricity + Control

11