ENERGY

SOUTH AFRICA YEARBOOK 2010/11 2010/11 ENERGY 8 Energy use in is characterised Policy and legislation by a high dependence on cheap and abund- The Department of Energy’s Strategic Plan antly available . South Africa imports a for 2010/11 to 2012/13 seeks to deliver large amount of crude oil. A limited quantity results along eight strategic objectives: of natural gas is also available. • ensure energy security: create and main- The country also mines uranium, which tain a balance between energy supply is exported, and imports enriched uranium and energy demand, develop strategic for its nuclear power plant, Koeberg. South partnerships, improve coordination in the Africa uses in the form of sector and ensure reliable delivery and electricity generated by hydropower, most of logistics which is imported. • achieve universal access and transform Electricity is also generated from other the energy sector: diversify the energy renewable energy sources, mainly biomass mix, improve access and connectivity, and to a lesser extent solar and energy. provide quality and affordable energy, The Government intends to diversify promote the safe use of energy and trans- energy supply and is promoting the use of form the energy sector renewable energy technology as well as • regulate the energy sector: develop ef- other new energy technologies. In addition, fective legislation, policies and guidelines; it aims to improve energy efficiency through- encourage investment in the energy sec- out the economy. tor; and ensure compliance with legisla- The energy sector is critical to South Afri- tion ca’s economy, contributing about 15% to the • provide effective and efficient service country’s gross domestic product (GDP). delivery: understand stakeholder needs The Department of Energy is responsible and improve turnaround times for ensuring exploration, development, • utilise optimal energy resources: develop processing, utilisation and management enabling policies and encourage energy- of South Africa’s energy resources. As efficient technologies the country’s economy continues to grow, • ensure sustainable development: pro- energy is increasingly becoming a key mote clean-energy alternatives, encour- focus. age economic development and promote The Electricity and Nuclear Branch is job creation responsible for electricity and nuclear- • enhance the department’s culture sys- energy affairs, while the Hydrocarbons and tems and people: attract, develop and Energy Planning Branch is responsible for retain appropriate skills and promote coal, gas, liquid fuels, energy efficiency, good organisational culture renewable energy and energy planning, • promote corporate governance: optimal including the energy database. use of resources, manage budget ef- The Department of Energy was appropri- fectively, implement fraud and risk man- ated: agement and ensure compliance with • R5,535 billion for 2010/11 relevant prescripts. • R5,739 billion for 2011/12 In 2010, the Department of Energy was • R5,538 billion for 2012/2013. mandated to draft and publish the Integ- Ninety-seven percent of the budget, about rated Energy Planning Strategy to outline R5,3 billion, will be transferred to the Integ- the requisite processes, systems and struc- rated National Electrification Programme tures that would lead to the development of (INEP), the Nuclear Energy Corporation of the comprehensive Integrated Energy Plan South Africa (Necsa), the National Efficiency (IEP), as envisaged in the National Energy and Demand-Side Management (DSM) Pro- Act, 2008 (Act 34 of 2008). gramme and Transnet, leaving the depart- The Energy Act, 2008 was signed into law ment with R202 million, which translates to by President Jacob Zuma on 17 November 3% of the total budget allocation. 2009. This legislation focuses, among other A key activity is to develop an electricity things, on ensuring that diverse energy system operator independent of resources are available, in sustainable Holdings and target 10% of electricity sup- quantities and at affordable prices in sup- ply from independent power procedures. port of economic growth and poverty allevia- tion. It further provides for energy planning, 2010/11 Energy – SOUTH AFRICA YEARBOOK 2010/11 172 increased generation and consumption • provide the framework for ministerial of renewable energies and contingency determination of new generation capacity energy supply. (inclusive of the required feasibility stud- The department also reviewed the Petro- ies) as envisaged in the New Generation leum Products Act, 1977 (Act 120 of 1977), Capacity regulations. with a view towards strengthening its legis- lative framework to address the needs of a Energy and the economy developmental state, including the transfor- The energy sector creates jobs for about mation of the liquid-fuels industry. 250 000 people. It generates around 95% The Department of Energy developed the of the electricity used in South Africa and Strategic Stocks Policy for prod- exports to countries in Africa. ucts to ensure that the economy does not This energy intensity is above average, suffer from shortages during severe liquid- with only 10 other countries having higher fuel supply disruptions. commercial intensities. It is largely a result of the economy’s struc- Integrated Resource Plan (IRP) ture with dominating large-scale, energy- To ensure reliable power supply, government intensive primary mineral beneficiation and established the Inter-Ministerial Committee mining industries. on Energy to develop a 20-year integrated resource plan. National Energy Regulator The department promulgated the IRP1 in of South Africa (Nersa) December 2009. This indicated the intention Nersa, which was launched in November to achieve the following targets: 2005, is the regulatory authority established • 10 000 Gigawatt hour (Gwh) (about 4% in terms of the National Energy Regulator of the ) of renewable-energy (NER) Act, 2004 (Act 40 of 2004), with the usage (as indicated in the 2003 Renew- mandate to undertake the functions of the able Energy White Paper) gas regulator as set out in the Gas Act, 2001, • the implementation of energy efficiency (Act 48 of 2001); the Petroleum Pipelines and DSM through a financial incentives Regulatory Authority, as set out in the Petro- scheme leum Pipelines Act, 2003 (Act 60 of 2003); • the installation of one million solar water- the NER as set out in the Electricity Act, 1987 heaters. (Act 41 of 1987), as amended; and the Elec- In October 2010, the Inter-Ministerial Com- tricity Regulation Act, 2006 (Act 8 of 2006), mittee on Energy approved the draft IRP, as amended. a 20-year blueprint that indicates that the country is planning to commit to 14% nuclear Central Energy Fund (CEF) power as part of its future energy mix. The CEF is involved in the search for appro- According to the draft plan, South Africa’s priate energy solutions to meet the future electrical energy will, by 2030, comprise energy needs of South Africa, the Southern 48% baseload coal, 14% baseload nuclear, African Development Community (SADC) 16% renewable energy, 9% peaking open and the sub-Saharan African region. cycle gas turbine, 6% peaking pump stor- This includes oil, gas, electrical power, age, 5% mid-merit gas and 2% baseload solar energy, low-smoke fuels, biomass, import hydro. wind and renewable energy sources. The The IRP is a long-term electricity capacity CEF also manages the operation and devel- plan, which defines the need for new gen- opment of the South African Government’s eration and transmission capacity for the oil and gas assets and operations. country. The CEF, through its integrated oil- The IRP is intended to: company subsidiary, PetroSA, is involved • improve the long-term reliability of elec- tricity supply through meeting adequacy The Government supported clean-energy criteria over and above keeping pace with research at a number of universities and uni- economic growth and development i versities of technology in 2010. • ascertain South Africa’s capacity invest- In March 2010, the Department of Energy ment needs for the medium-term busi- invested in an electric car and the prototype of a hybrid ness planning environment e-bike. The hydrogen-fuelled bike called “A hi Fambeni” • consider environmental and other ex- (Tsonga for “let’s go”) was designed by a leading South ternality impacts and the effect of renewa- African-born motorbike designer, Pierre Terblanche, ble-energy technologies and was being developed at the Tshwane University of Technology.

173 SOUTH AFRICA YEARBOOK 2010/11 – Energy in the exploration for oil and gas onshore Government had put together a number and offshore in South Africa and the rest of initiatives to promote energy efficiency. of Africa. It is also involved in producing One such initiative is a proposal, through environmentally friendly petroleum fuels the National Treasury, that tax incentives and petrochemical products from gas and be applied to companies that demonstrate condensate at its synfuels refinery outside energy-efficient practices. Mossel Bay, and the management of oil- A financial incentive scheme is expected storage facilities. The Strategic Fuel Fund to be introduced in terms of which project manages South Africa’s strategic crude oil developers will be able to claim a rebate in reserves. respect of the amount of energy they have The CEF has established the Energy saved from the electricity system. Development Corporation (EDC) to pursue The Department of Energy’s energy- commercially viable investments in renew- efficiency and DSM policies guide the able energy. The EDC’s focus is on niche implementation of DSM, with energy and areas, and commercial and development demand savings being verified by independ- projects that catalyse the renewable energy ent university measurement and verification sector and social projects that benefit previ- professionals. ously disadvantaged communities. Initially, Eskom’s DSM focused on realising CEF subsidiary Oil Pollution Control SA energy and average demand savings during provides oil-prevention control and clean-up evening weekday peak periods (18:00 to services, mainly in South African ports and 20:00) via energy-service company projects coastal areas. in the industrial and commercial sectors and CEF subsidiary Petroleum Agency South hot-water load management within munici- Africa manages the promotion and licens- pal environments. ing of gas exploration, development and With the need to reduce demand, the production in South Africa and the coastal focus expanded to include mass energy- areas offshore as part of creating a viable efficient programme roll-outs that could be upstream oil industry in South Africa. rapidly implemented. CEF subsidiary iGas is the official agent of These included energy-efficient lighting the South African Government for the devel- utilising compact fluorescent lamps (CFLs), opment of the hydrocarbon gas industry, solar water-heaters and improving the effi- comprising liquified natural gas and liquified ciency of electric motors and pumps. petroleum gas (LPG) in South Africa. The CEF is expected to ensure that South Africa’s energy is fully developed and Energy efficiency used efficiently for the benefit of all South Government set a target of 15% energy Africans. The CEF established two energy efficiency for the industry and 12% nation- bodies to deal with the country’s energy ally to be achieved by 2015. challenges. These are the National Energy- The energy industry leads by example by Efficiency Agency (NEEA) and the South committing to energy efficiency. African National Energy Research Institute While the focus had been on energy- (Saneri). intensive industries, room has been created The NEEA assists with promotional activ- for other industries and the commercial sec- ities regarding the national energy-efficiency tor to join the Energy-Efficiency Campaign, drive. through the introduction of, among other Its initial focus is on prioritising and re- things: commending energy efficiency and DSM • efficient lighting and heating, ventilation projects. and air conditioning and employee- education • efficient production processes and cogen- In April 2010, President Jacob Zuma launched the national Solar Water-Heating Programme at eration in the industrial sector. i Winterveldt, outside . Government remains committed to the effi- The launch was in line with government’s target cient use of available resources. It is also of installing at least one million solar water-heaters by committed to broadening the energy mix, 2014 to reduce the water-heating load on the national thereby moving away from being fossil- grid. Some of the objectives of the programme are to dominated to a more balanced combination, offset rising electricity costs for residential households which places a high premium on the use of through savings on water heating and to contribute to more efficient technologies and renewable- the reduction of South Africa’s carbon footprint. energy resources.

Energy – SOUTH AFRICA YEARBOOK 2010/11 174 The agency develops strategies to and characterise potential storage sites address the growing demand for all kinds at a theoretical level and on a geological of . It also creates basin extent. The atlas will then be taken energy-efficiency and DSM-awareness into the South African Centre for Car- campaigns to assist the public when pur- bon Capture and Storage’s programme chasing energy-consuming equipment and of work and be developed to locate a appliances. storage site suitable for a test injection. The NEEA oversees the integration and Pre-atlas knowledge had identified four coordination of training in existing energy- possible carbon-dioxide geological stor- efficiency projects, and assists with skills age basins: transfer, capacity-building and the creation -- Orange Basin (off-shore of the west of additional jobs in the field of energy con- coast) servation. -- Outeniqua Basin (off-shore of the In line with the National Energy-Efficiency southern coastline and site of the only Strategy, the NEEA is subject to review producing gas/petroleum wells in South every three years. Africa) Saneri facilitates skills development and -- /Zululand Basin (east coast) undertakes research and technology devel- --  On-Shore Basin (near the main opment that will ensure that South Africa’s coal fields and the majority of the coal- energy resources are used and optimised. based electricity generation and synfuel It is designed to generate new ideas production). to develop practical guidelines for taking The first three are conventional types of advantage of the natural resources of clean storage – that is depleted oil/gas wells and renewable energy. and deep saline formations. The fourth, the Karoo Basin, has sandstone forma- Carbon capture and storage tions that are subject to low permeability roadmap and also to dolerite intrusions. Conse- Although South Africa has a programme to quently, further investigation is required increase the use of renewable energy and as to how carbon dioxide could be stored energy-efficiency, coal is likely to provide in these less favourable formations. The most of the country’s primary energy for the Karoo Basin is the closest to the current next few decades. major sources of carbon dioxide emis- The displacement of fossil fuels by sions. renewable and nuclear energy is seen as a • The CO2 Test Injection Experiment of gradual task. Carbon capture and storage safely injecting carbon dioxide into South is a transition measure from fossil fuel to African reservoirs is essential to the nuclear and renewable energy. To this end, understanding of the suitability of the local the South African Centre for Carbon Cap- geology as a storage medium. It is also ture and Storage was established in March necessary to ascertain the dispersion 2009. and transformation reactions of carbon The five phases of the roadmap and their dioxide in the storage medium and its status are: • A preliminary investigation was under- taken by the Council for Science and In 2010, the Swiss Agency for Development Industrial Research for the then Depart- and Cooperation funded a climate-change i mitigation programme in South Africa worth ment of Minerals and Energy to ascer- R120 million. In July, the Department of Energy tain whether South Africa had potential announced that R13,95 million from the agency would capturable carbon-dioxide sources and be used for an energy-efficiency project. storage sites. The results of that in- The bilateral agreement states that the funds will vestigation, released in 2004, showed that be used to monitor the energy-efficiency targets in the public buildings of five municipalities (Sol Plaatje, South Africa had capturable emissions Polokwane, King Sabata Dalindyebo, Rustenburg and and potential storage sites. Based on Mbombela). this premise, further investigations were The aim of the project is to contribute to a significant initiated. The preliminary investigation reduction in energy consumption in the building sector also identified that the synfuel industry in through enhanced energy efficiency in the full life cycle of buildings. South Africa produced 30 million tons (Mt) The project runs from 2010 to 2013 and will include per year of 95% concentration carbon focusing on building local ownership, facilitating South- dioxide. South expertise and technology transfer and regional • The Carbon Dioxide Geological Storage outreach. Atlas (launched in August 2010) will locate

175 SOUTH AFRICA YEARBOOK 2010/11 – Energy effects on the surroundings of the storage was identified in the Industrial Policy Action medium. This experiment will be informed Plan (IPAP) to strengthen South African by similar injection activities underway standards and regulations for energy effi- internationally. ciency, and were expected to be finalised by • A demonstration plant will test an in- the end of 2010. tegrated operating system under local The energy-efficient regulations for resi- conditions, and forms an essential link dential and commercial buildings, places of between feasibility trials and a full-scale learning and worship, certain medical clin- commercial plant. This phase will demon- ics and other categories of buildings make strate the safe injection of carbon dioxide it compulsory for all new buildings to be into South African geological formations. designed and constructed to a standard that The magnitude of the demonstration plant makes it possible for the user to minimise is in the order of hundreds of thousands of the energy required to meet the functional tons of carbon dioxide per year. requirements. Significant energy savings • If positive outcomes of the demonstra- can be affected by users, which will relieve tion plant ensue, a full-scale commercial pressure on the electricity supply grid. plant is envisaged. This phase will be The different elements of the building dependent on the outputs of the previous envelope, that is, roofs, ceilings, walls phases. and windows, will have to meet minimum requirements for preventing heat loss (in Integrated energy planning winter) or heat gain (in summer) to meet the Energy efficiency is an important facet of the energy-efficiency targets. IEP process carried out by the Department All buildings will also have to be fitted with of Energy. renewable-energy water-heating systems By virtue of its size and economic import- such as solar water-heating systems. Solar ance, the energy sector periodically requires water-heating systems also have to comply considerable investments in new supply with the South African National Standards capacity, which impacts on the economy. In- (Sans). tegrated resource-planning decisions The regulations require that buildings, around the world consider not only maintain- heaters, air-conditioners and mechanical ing security of supply, but give consideration ventilation systems have to be energy effi- to the economic, environmental and social cient. impacts of all alternatives, such as DSM and The Department of Trade and Industry, in energy-efficiency programmes. partnership with the South African Bureau of Standards as well as the National Regulator Working for Energy for Compulsory Specifications, was instru- Programme mental in the development of regulations In 2010, the Department of Energy launched and supporting the Sans. the Working for Energy Programme, with the primary objective of using the feedstock Designated National Authority created from clearing alien biomass vegeta- (DNA) tion to produce power. As a signatory to the Kyoto Protocol, gov- The programme has two distinct focuses, ernment has established the DNA to facil- one being the provision of energy through itate the development of clean development renewable-energy technologies and the mechanism (CDM) projects. The purpose second being the facilitation of energy man- of this initiative is to ensure that the CDM agement. They both use labour-intensive investment taking place in South Africa is in methodologies to stimulate sustainable job line with sustainable development object- creation, local economic development, tech- ives addressing economic, environmental nology skills transfer and capacity develop- and social development with the emphasis ment within a South African context. on investments, job creation, poverty alle- viation, technology and skills transfer. National building standards The projects submitted to the DNA for In June 2010, members of the public and initial review and approval included biofuels, interested parties were invited to submit energy efficiency, waste management, co- comments and input on the energy-effi- generation, fuel switching and hydro-power, ciency regulations for new buildings, which and sectors such as manufacturing, mining, were published in the Government Gazette agriculture, energy, waste management, in June 2010. housing, transport and residential. The regulations form part of the deliv- These projects will assist South Africa to erables of the National Energy Strategy that reduce greenhouse-gas (GHG) emissions

Energy – SOUTH AFRICA YEARBOOK 2010/11 176 such as carbon dioxide, which is emitted Discussions are underway to align the IEC mainly by the energy sector. Programme with the Comprehensive Rural A number of big industries such as , Development Programme. The programme, Eskom, Mittal Steel, Mondi, Sappi and South which was approved by Cabinet in 2009, African Breweries have also taken up CDM is one of the key priorities of government, investments with the aim of contributing to aimed at creating sustainable rural commu- sustainable development objectives and nities throughout the country. emission reduction. South Africa is assisting other countries in Coal Africa to establish DNAs. South Africa’s indigenous energy resource base is dominated by coal. Internationally, Energy statistics coal is the most widely used primary fuel, Detailed, complete, timely and reliable sta- accounting for about 36% of the total fuel tistics are essential to monitor the energy consumption of the world’s electricity pro- situation in South Africa. In addition, energy duction. statistics on supply, trade, stocks, transfor- Coal has traditionally dominated the mation and demand are the basis for any energy-supply sector in South Africa, from sound policy decision. as early as 1880 when coal from the Ver- The Department of Energy, in collabora- eeniging area was supplied to the Kimberley tion with Statistics South Africa, is responsi- diamond fields. ble for providing energy data and statistics. About 77% of the country’s primary It has initiated a programme to strengthen energy needs are provided by coal. the expertise and experience of the depart- South Africa produces an average of ment’s staff to be able to collect, verify, 224 Mt of marketable coal annually, making analyse and publish energy statistics. In it the fifth-largest coal-producing country in addition, it intends to reduce the backlog the world. in providing energy balances to one year. About 25% of the production is exported Energy statistics are available from publica- internationally, making South Africa the tions such as the Energy Digest and Energy third-largest coal-exporting country. The Price Report, as well as in electronic format remainder of South Africa’s coal production and on the department’s website. feeds the various local industries, with 53% The department, through the National used for electricity generation. The key role Energy Act, 2008, intends to make the provi- played by coal reserves in the economy sion of energy data mandatory. is illustrated by the fact that Eskom is the seventh-largest electricity generator in the Integrated Energy Centre (IEC) world, and Sasol the largest coal-to-chem- Programme icals producer. The department, in partnership with muni- cipalities, oil companies and other stake- Nuclear holders, is establishing IECs countrywide. The nuclear sector in South Africa is mainly The main objective is to bring affordable governed by the Nuclear Energy Act, 1999 and sustainable energy services and infor- (Act 46 of 1999), and the National Nuclear mation closer to poor communities. Regulator (NNR) Act, 1999 (Act 47 of 1999). Underlying this is a strong social-respons- The Department of Energy administers ibility drive aimed at poverty alleviation, job these Acts. creation and capacity-building. The Department of Health administers the By mid-2010, there were six established Hazardous Substances Act, 1973 (Act 15 of IECs across the country, namely: Kgalagadi 1973), related to groups III and IV hazard- IEC in Kuruman, Northern Cape; Caba ous substances. Mdeni IEC in Matatiele, Eastern Cape; Cabinet approved the Nuclear Energy Moshaweng IEC in Laxey, Northern Cape; Policy for South Africa in June 2008. Eshane IEC in Greytown, KwaZulu-Natal; The long-term vision of the policy is for Mutale IEC, Limpopo; and Ratlou IEC in South Africa to become globally competitive Makgobistad, North West. Other IECs are at in the use of innovative technology for the various stages of development. The depart- design, manufacture and deployment of ment has approved a sustainability strategy state-of-the-art nuclear energy systems and and roll-out plan to establish more IECs power reactors as part of the energy mix, as until 2015, targeting the nodal areas first, well as the deployment of nuclear fuel cycle followed by peri-urban and urban areas. systems to ensure security of supply. These nuclear power reactors will play a role in

177 SOUTH AFRICA YEARBOOK 2010/11 – Energy mitigating climate change by reducing GHG The Minister of Energy is the executive emissions. authority responsible for overseeing the Skills-development strategies and acqui- South African Nuclear Energy Corporation sition and retention of the relevant skills to (Necsa) and the NNR. support the nuclear programme have to be • Necsa undertakes and promotes research formulated. The following categories will be and development (R&D) in the fields of addressed: nuclear energy, radiation science and • construction skills technology (S&T), medical-isotope manu- • plant-operation skills facturing, nuclear liabilities management, • skills for the relevant government depart- waste management and decommissioning. ments Necsa’s reactor-produced radioisotopes • regulatory skills are exported to more than 50 countries. • supporting industry skills • The NNR oversees safety regulation of • decommissioning and rehabilitation skills nuclear installations and activities involving • radioactive waste management. radioactive material at Necsa’s Pelindaba The Nuclear Fuel Cycle Strategy for the site, Vaalputs Radioactive Waste Disposal beneficiation of uranium resources is a key Facility, the Koeberg Nuclear Power Sta- factor with special focus on: tion, certain mines and other small users. • securing South African uranium mineral • The Department of Health (Directorate: resources Radiation Control) issues licences for • developing a uranium conversion plant Group III hazardous substances (electronic • developing a uranium enrichment plant product generating X-rays, other ionising • developing a fuel fabrication plant. beams, electrons, neutrons or other parti- Eskom is investigating the possibility of cle radiation or non-ionising radiation) and generating up to 20 000 MW of new nuclear Group IV hazardous substances (radioac- power capacity by 2025. This will entail tive material outside a nuclear installation, recapitalising certain nuclear agencies, which does not form part of or is used or financing others and setting up new ones. intended to be used in the nuclear fuel The following main organisations are cycle, and which is used or intended to be directly involved in the nuclear sector: used for medical, scientific, agricultural, • The Department of Energy plays a lead- commercial or industrial purposes). ing governance role regarding nuclear • The Koeberg Nuclear Power Station, the technology, non-proliferation and safety. only nuclear power station on the African

South African proposals and measures to reduce greenhouse gas (GHG) emissions

• 2003 White Paper on the Production of Energy by Renewables. Targets established for 2013. • 2006 Treasury draft policy paper: A Framework for Considering Market-Based Instruments to Support Environmental Fiscal Reform in South Africa. • Introduction of electricity levy, 2008. • Eskom Demand-Side Management Programme to reduce electricity demand (from 2008). • Measures in 2010/11 Budget: Supplementary depreciation allowance for investments by companies in energy-efficient equipment; increased levy on plastic shopping bags (to 4 cents, increased from 3 cents in 2009); proposed increase in the international air passenger departure tax (which was last raised in 2005/06). • Preferential tariffs for electricity produced with wind, solar, landfill gas, biomass, or hydro energy, beginning in March 2010. • Planned second nuclear power station to come on line by 2020. • Building regulations revised to require the installation of energy-efficiency equipment such as solar water-heaters and efficiency lighting in new buildings. • An energy-efficiency measurement standard is being developed to support the tax rebate for energy-efficiency incor- porated into the Income Tax Act,1962 (Act 58 of 1962). • New standard prescribing maximum energy consumption standards. • Commitment by national government to support municipalities’ efforts to upgrade the housing and building stock so as to prevent future negative impacts on climate change. • Planned Department of Energy (with donor support) Industrial Energy-Efficiency Programme, focusing on system opti- misation. • Copenhagen commitment to reduce 2020 GHG emissions by 34% relative to a no-policy change scenario. • Installation of one million solar water-heaters (target), beginning in March 2010. • New tax on vehicles varying by CO2 emissions.

Source: Organisation for Economic Cooperation and Development (OECD) Economic Surveys: South Africa

Energy – SOUTH AFRICA YEARBOOK 2010/11 178 continent, is responsible for about 6% of The NTP Radioisotopes (Pty) Ltd is total electricity generation. It is owned by among the top three global producers and Eskom, which reports to the Minister of suppliers of radiation-based products and Public Enterprises. services that are routinely and reliably pro- • The iThemba Laboratory for Accelerator- vided to customers throughout the world. Based Sciences brings together scientists One of the principal products, Fission working in the physical, medical and biolo- Mo-99, is used in products that allow for the gical sciences. The facilities provide oppor- estimated 30 million nuclear medicine imag- tunities for modern research, advanced ing scans performed on patients throughout education, the treatment of cancers and the world every year. the production of unique radioisotopes. The NTP supplies more than 90% of • Nufcor is responsible for uranium-ore the total South African nuclear medicine refinement and export. demand through its subsidiary companies The National Radioactive Waste Disposal AEC Amersham (Pty) Ltd and Cyclotope Institute will be responsible for the manage- (Pty) Ltd. ment of all radioactive waste. The latter pioneered the introduction to The department continues to participate South Africa of the first commercially avail- in the Women in Nuclear South Africa able positron emission tomography tracer. (Winsa) Programme. Government is In addition, NTP supplies radioisotopes expected to accelerate preparatory work to used for industrial applications to the entire ensure greater reliance on nuclear energy South African market and exports these and other renewable energies. The depart- products to a number of countries through ment has introduced initiatives such as the its distributors. South African Young Nuclear Professionals The NTP Logistics (Pty) Ltd specialises in Society and Winsa to promote the industry the international and domestic transport of among historically disadvantaged people. radioactive and other dangerous goods. Nuclear Energy Corporation of Liquid fuels South Africa The South African liquid-fuels sector Necsa was established as a public company presents several opportunities for investors in terms of the Nuclear Energy Act, 1999 throughout the petroleum value chain. and is wholly owned by the State. In 2010, PetroSA concluded its feasibility The main functions of Necsa are to study on a 400 000-barrels-a-day refinery undertake and promote R&D in the field of at the Coega Industrial Development Zone nuclear energy and radiation S&T; to pro- (IDZ) in the Eastern Cape. cess source material, special nuclear mater- The proposed Mthombo oil refinery will ial and restricted material; and to cooperate save South Africa some R12,6 billion a with persons in matters falling within these year in energy costs once it is running and functions. exporting oil across Africa. Apart from its main operations at Pelindaba, The refinery will also result in employment which include the Safari-1 Research Reactor, for 27 500 people. Necsa also operates the Vaalputs National Construction of the refinery, which will be Radioactive Waste Disposal Facility, which the biggest in Africa, was expected to start is licensed to receive low and intermediate in 2012, with completion by 2015. radioactive waste. A key feature of the South African liquid- Necsa successfully converted the fuels sector is the fact that most of the trans- Safari-1 Reactor from a high-enriched ura- port fuel is produced in the coastal areas nium to a low-enriched uranium-based facil- but about 68% thereof is consumed in the ity. South Africa will be the first radioisotope- producing country to have completed this conversion process, which is a requirement South Africa’s radioisotope market is the world- for supplying radioisotopes to certain key leader in the supply of Molybdenum-99 – a markets. i clear indication that it is among the world’s best Through its fully owned commercial sub- in the nuclear industry. sidiaries Pelchem (Pty) Limited (Ltd) and As a result of a worldwide shortage of medical isotopes, NTP Radioisotopes, a subsidiary of the Nuclear Energy NTP Radioisotopes (Pty) Ltd, it sells fluorine Corporation of South Africa, has managed to increase and fluorine-based products as well as group sales by more than 80% year-on-year, and unau- radioisotopes on the international market. dited finances show net sales of more than R700 million for the 2009/10 financial year.

179 SOUTH AFRICA YEARBOOK 2010/11 – Energy inland region of . This requires Sasol mines and pro- investments in the storage and distribution duces gas in Mozambique and oil in Gabon. facilities for the supply of petroleum prod- Its chemical manufacturing and marketing ucts at the point of need. operations span the globe. In South Africa, A new R15-billion pipeline to transport Sasol refines imported crude oil and retail petroleum from Durban to liquid fuels through its network of retail con- is under construction for completion in the venience centres. Sasol also supplies fuels 2011/12 financial year. to other distributors in the region and gas to Through the new multiproduct pipeline, industrial customers in South Africa. will increase fuel- Through Sasol Synfuels International, carrying capacity by 8,7 billion litres per Sasol is pursuing international opportunities year in 2011; by 12,2 billion litres per year to commercialise its gas-to-liquids (GTL) and in the second phase of the project; and by coal-to-liquids (CTL) technology. In partner- 26,2 billion litres in the ultimate fifth phase ship with Qatar Petroleum, Sasol started its of the project. This investment is in direct first international GTL venture, Oryx GTL, aid of South Africa’s security of supply of in Qatar in 2007, and is developing a GTL energy going into the future. plant in Nigeria with Chevron and the Nige- These mega infrastructural projects and rian National Petroleum Corporation. the related support infrastructure require In May 2010, Sasol approved the con- a close and ongoing partnership between struction of a R1,9-billion ethylene puri- state-owned entities and private compa- fication unit at its Sasol Polymers plant in nies. . The Department of Energy, having under- The plant is expected to go on stream taken pilot projects on LPG, has embarked in the second half of 2013 and will operate on a drive to promote the use of LPG by on full capacity by 2015, enabling the com- households for space heating and cooking. pany to boost ethylene production by about As a first step in efforts to promote LPG, the 48 000 tons per year. department promulgated regulations for the The ethylene will be used in the manu- retail price of LPG supplied to residential facturing of polyethylene, and will greatly customers in 2010. benefit South Africa’s plastics conversion Since the use of fossil fuels like coal is industry, which imports large quantities of expected to persist into the foreseeable this raw material. future, clean coal technologies and car- bon capture and storage programmes are Oil and gas essential. While pursuing the energy mix South Africa has very limited oil reserves strategy, the pool of viable substitute energy and about 60% of its crude oil requirements carriers should be expanded. are met by imports from the Middle East In November 2010, the Minister of Energy, and Africa (Saudi Arabia, Iran, Kuwait, the Ms Dipuo Peters, launched the review of the United Arab Emirates, Yemen, Qatar, Iraq, industry’s compliance with the Liquid-Fuels Nigeria, Egypt and Angola). Charter. The first-ever industry transforma- Refined petroleum products such as pet- tion charter came into effect in 2000. rol, diesel, residual fuel oil, paraffin, , aviation gasoline, LPG and refinery gas are 20-Year Liquid-Fuels produced by the following methods: Infrastructure Plan • crude oil refining (oil refineries) The Department of Energy was expected to • CTL and GTL fuels (Sasol) develop a comprehensive 20-year Liquid- • natural GTL (PetroSA). Fuels Infrastructure Plan in 2010/11. The wholesale and retail markets for petro- This plan will cover port, pipeline, stor- leum products in South Africa are subject to age as well as distribution infrastructure. a set of government controls. It will also include future refining capacity- Government regulates wholesale margins development requirements. and controls the retail price of petrol. The industry has entered into product-exchange Sasol agreements to serve different markets. Sasol is an integrated energy and chemi- Together, these controls provide for cal company. It beneficiates coal, oil and access to fuel throughout the country and gas into liquid fuels, fuel components and protect consumers, while rendering a chemicals with the help of its proprietary reasonable return on investment to the oil Fischer-Tropsch processes. industry and enhancing opportunities for employment.

Energy – SOUTH AFRICA YEARBOOK 2010/11 180 The refiners and wholesale marketers fuels to Botswana, Namibia, Lesotho and move products from the refineries by coastal Swaziland. barge, rail, truck and pipeline to roughly 200 depots. From these, about 4 600 service Biofuels stations and 100 000 direct consumers The biofuel sector has grown rapidly interna- (mostly farmers) are served. tionally. However, South Africa has remained Refineries and Sasol produce LPG and only a peripheral participant in the sector’s illuminating paraffin (kerosene). Most LPG growth. There are a number of reasons is consumed in the country and the rest is for this: being a relatively new sector there used in refineries as fuel and/or exported are a variety of complex regulatory barriers regionally. which need to be finalised; the global eco- Limited natural gas reserves exist around nomic crisis and the resultant reduction in oil the South African coast. PetroSA exploits prices have reduced the commercial viabil- the reserves off the coast of Mossel Bay, ity of some investments and, more generally where the Mossgas plant converts the gas have negatively affected investor sentiment; into liquid fuels. and national debates have tended to focus Sasol produces gas from coal and is on the food versus fuel arguments and the researching prospects to import gas from potential to create biofuels using crop sur- Namibia. Even though gas consumption has pluses. increased in recent years, the importance of The (then) Department of Minerals and gas in the South African energy economy is Energy’s National Biofuels Study (2006) still low compared with other countries. found that South Africa has significant poten- tial to develop a commercially viable bio- Cross-border gas trade fuels sector notwithstanding South Africa’s agreement water-poor status. The Industrial Develop- To facilitate the movement of gas across ment Corporation (IDC) and the CEF are the international borders, cross-border gas main investors in the sector in South Africa. trade agreements have been signed with The IDC in particular is involved in all four of Mozambique and Namibia. South Africa’s current biofuel projects. Since the arrival of natural gas from The biofuels sector has strong linkages Mozambique in 2004, the contribution of to agriculture, manufacturing and distribu- natural gas to the primary energy supply tion and has the potential to create substan- rose from 1,5% to 3,3% (2005). tial numbers of labour-intensive jobs in the This figure is expected to rise to 4,3% agriculture sector in particular. In addition, when the new Mozambique-South Africa second-generation biofuel technology will gas-transmission pipeline reaches maxi- also contribute to South Africa meeting its mum capacity. renewable energy targets in a sustainable The South Africa-Namibia Gas Commis- manner. sion addresses harnessing the natural gas Government has already committed to reserves in the Kudu Gas Field. a 2% blend target for biofuels inclusion into the national fuel supply. In addition, a Import and export of fuel number of other developing countries have products set blending targets of 10% for biofuels The importation of refined products is without any need for significant engine restricted to special cases where local pro- adjustment. Were South Africa to increase ducers cannot meet demand. It is subject its blending target to 10%, some 125 000 to state control to promote local refinery direct jobs could be created, many of which usage. would be based in rural areas, where the When overproduction occurs, export deepest pockets of poverty occur. permits are required and generally granted, provided that the needs of both South Africa In October 2010, President Jacob Zuma offi- and other Southern African Customs Union cially reopened the in members are met. More diesel than petrol i Ermelo, . The 43-year-old power is exported, owing to the balance of supply station was first officially opened in October and demand of petrol and diesel relative to 1967, and half the station was mothballed in 1988. The refinery configurations. last unit was returned to service in July 2008. Camden is one of three power stations that Although petrol and diesel make up 55% Eskom is returning to service as part of its capacity of total liquid-fuel exports, South Africa expansion programme to address energy challenges in is also the main supplier of all other liquid the country.

181 SOUTH AFRICA YEARBOOK 2010/11 – Energy Electricity In November 2010, Eskom secured a R15- South Africa is faced with a situation in which billion loan from the Development Bank of the demand for electricity continues to grow i Southern Africa to fund its capital-expansion within a supply-constrained environment. programme. The loan is a structured facility that The Mass Electrification Programme, will be drawn over five years. Eskom’s capacity-expansion projects will add which started in the 1990s, as well as the 12 300 megawatts of additional generating and trans- ongoing rapid industrialisation in the coun- mission capacity to South Africa’s national grid by 2017, try have put enormous strain on energy enabling it to keep up with growing demand. sources. The projects include the Medupi and Kusile coal- The electricity demand is expected to fired power stations as well as the Ingula Pump Storage double over the next 20 years as govern- Scheme and associated transmission infrastructure. ment implements its Programme of Action to take the country’s economy on a higher Eskom growth path. Eskom generates, transmits and distributes Government is ready to spend more than electricity to industrial, mining, commercial, R800 billion on infrastructure in the next few agricultural and residential customers and years. This infrastructure programme will redistributors. The majority of sales are in demand an enormous supply of energy. South Africa while other countries of south- Reliable energy supply is also a critical ern Africa account for a small percentage of factor in attracting foreign investment. Also sales. It generates about 95% of the elec- critical and central to the country’s devel- tricity used in South Africa and about 45% of opmental agenda, is the electrification of the electricity used in Africa. households in both rural and urban areas In April 2010, the Government welcomed as part of improving the quality of life of the decision by the World Bank to grant a people. $3,75-billion project loan to Eskom. The During the State of the Nation Address in maturity is 28,5 years with a grace period of 2010, President Jacob Zuma made a com- seven years. mitment that the Government would aim The loan will co-finance the Medupi to ensure that all households around the Power Station and the country’s first large country are electrified by 2012. wind and concentrated solar power (CSP) projects. Medupi’s cleaner coal supercritical Integrated National Electrifica- technology together with the country’s first tion Programme renewable energy projects, is a critical part The Department of Energy began funding of South Africa’s responsible approach to the INEP in April 2001. Eskom implements planning for future energy needs. the programme in its licensed areas of sup- In October 2010, government extended ply on the Department of Energy’s behalf. guarantees to Eskom by R774 billion to Operating costs relating to this electrifica- enable it to continue with its Build Pro- tion programme are incurred by Eskom as gramme (responsible for additional power the licensed distributor supplying electricity stations and major power lines) through to its consumers. 2017. Eskom has received R30 billion from Since the inception of the electrification government to enhance its power grid. programme in 1991, a total of 3 901 054 The success of the initiatives contained homes have been electrified. in the loan (both projects and technical Funding is currently made available for assistance) could defer the need to build by new connections and infrastructure devel- 2017 and allow for the introduction of other opment projects that are part of the INEP cleaner technologies. going forward. Eskom expects that the aver- The construction of the Medupi Power age cost of infrastructure development and Station will provide much-needed base-load the cost per connection will increase as it capacity, which will be commissioned from electrifies communities in more remote rural 2012 onwards. This will ensure that the areas. In addition, technical specifications country’s economic development objectives for network design have been enhanced remain on track and that security of electri- to better accommodate future growth in city supply is restored. Investment in energy electricity demand and to improve the qual- remains a cornerstone of government’s eco- ity and reliability of the electricity supply in nomic strategy. these areas. South Africa is committed to meeting its long-term climate change mitigation object- ives and is pursuing an energy strategy

Energy – SOUTH AFRICA YEARBOOK 2010/11 182 compatible with commitments made in The utility has an active research pro- Copenhagen and the economic develop- gramme investigating ways to harness ment plans. South Africa’s renewable energy sources The generation technologies that Eskom for power generation. Eskom is looking to has chosen to use are fully embedded in increase the renewables component of its and informed by the long-term mitigation supply mix. scenarios (LTMS) adopted by government The long-term Strategic Energy Plan in 2008. The intention is to ensure that car- includes a mix of all viable sources, includ- bon emissions peak during 2020 to 2025, ing renewables, to be implemented where reaching a plateau for a decade and begin they are commercially viable. The two most declining thereafter. advanced areas under investigation are Since the adoption of the LTMS and its wind-generated power and concentrating outcomes, there has been sound assurance solar thermal. among various stakeholders within govern- Eskom’s CSP Project forms part of its ment, civil society and the private sector of South African Bulk Renewable Energy implementation actions that are required to Generation Programme. The research will meet its objectives. establish the feasibility of using CSP as a large-scale generation option for Eskom. Climate change If implemented, the proposed plant will be Mitigating Eskom’s contribution to climate the largest molten salt-type central receiver change has long been an integral part of its project in the world, which will represent a business. Eskom’s Climate-Change Strat- significant step in establishing solar power egy, developed in 2005, and its six-point as a major future energy supply option in plan on climate change, prove its commit- South Africa. ment. To confirm government’s commitment The six-point plan includes: with regard to the use of renewable energy, • adapting to the negative impacts of cli- the Department of Energy has launched two mate change flagship initiatives: • diversifying the generation mix to lower • a small-scale hydro in Bethlehem in the carbon-emitting technologies Free State • energy-efficiency measures to reduce • a Waste to Electricity Project at eThekwini demand and GHG and other emissions in KwaZulu-Natal. • innovation through research, demonstra- These projects have added 13 MW to the tion and development total supply capacity in the country. • investing through carbon-market mecha- nisms Solar Water-Heating Programme • progress through advocacy, partnerships The Eskom Solar Water-Heating Pro- and collaboration. gramme, driven by government, has set a Eskom has been driving the climate-change target for renewable energy to contribute agenda further through planning, research, 10 000 GWh of final energy consumption by pricing studies and training sessions both 2013. internally and with key industrial customers. Solar water-heating could contribute up to 23% of this target. Eskom is supporting this Renewable energy drive through the large-scale introduction Eskom’s renewable energy journey has of solar water-heating, one of the most ef- been impacted on by a number of factors, fective renewable-energy sources avail- including the changing nature of power able. generation, environmental concerns and the A substantial increase in the solar water- World Bank loan, which will fund solar and heater rebates offered by Eskom is set to wind-electricity generation. bring environmentally friendly solar-heated The planned Eskom renewable projects, geysers within reach of thousands of South the 100-MW Sere and the 100- Africans wishing to reduce their home MW CSP Project, have been earmarked to energy costs. receive about $260 million worth of funding from the International Bank for Recon- Compact fluorescent lamp struction and Development as part of the exchange $3,75-billion World Bank loan. CFLs offer consumers lighting through Construction on both projects is expected lamps that have a longer life and consume to begin in 2011. considerably less energy than conventional incandescent globes.

183 SOUTH AFRICA YEARBOOK 2010/11 – Energy As part of its strategy to introduce these The construction of the power station globes, Eskom has embarked on a national began in May 2007, with the first of the six programme to exchange incandescent units of the power plant planned for commis- globes with CFLs in selected areas. Since sioning in the first half of 2012. Each of the the programme began in 2004, more than remaining five units will be commissioned in 35 million CFLs have been exchanged for about nine-month intervals thereafter. incandescent globes. The project is the largest construction in The national programme has reached South Africa as well as in the southern hemi- all the provinces in South Africa, selecting sphere. The plant will be the 22nd-largest areas of highest electricity constraint and power plant and the fourth-largest coal-fired ease of roll-out. The programme has saved plant in the world. in excess of 1 000 MW and will continue to The will also be reduce the energy demand from the house- coal-fired but will be the first power station hold sector. in South Africa to have the technology to remove sulphur oxides. The power station Power Conservation Programme will be close to the existing Kendal Power (PCP) Station in the Delmas municipal area of The PCP aims to create a South Africa that Mpumalanga. uses electricity much more efficiently on a The station will consist of six units, each sustainable basis. with an installed capacity of about 800 MW, The key components of the programme giving the power station a total of 4 800 MW. include energy conservation schemes to The first unit is planned for commercial reduce energy consumption by 10% and operation in 2013. electricity growth management to manage Other units will be commissioned in new electrical connections in line with avail- about nine-month intervals with the last unit able capacity supply. expected to be in commercial operation by In addition, the PCP aims to provide the 2017. pricing signal to ensure the uptake on other The Ingula Power Station, which will be solutions such as DSM, particularly among straddling the provincial boundary walls of the top 500 consumers in the country. the Free State and KwaZulu-Natal, is differ- ent in that it is a pumped storage scheme. New Build Programme The pumped storage scheme, consisting of In 2010, additional power stations and major an upper and a lower dam, will have four power lines were being built on a massive 338-MW units with a total installed capa- scale to meet rising electricity demand in city of 1 352 MW, and is designed to mainly South Africa. Eskom’s capacity expansion serve peak electricity demand. budget totals R385 billion up to 2013 and During times of peak energy consump- is expected to grow to more than a trillion tion, water will be released from the upper rand by 2026. Ultimately, Eskom will double dam through the pump turbines to the lower its capacity to 80 000 MW by 2026. dam to generate electricity. During times of Since the programme started in 2005, an low energy demand, the pump turbines are additional 4453,5 MW has been commis- used to pump the water from the lower dam sioned. The plan is to deliver an additional back up to the upper dam. The project is 16 304 MW in power-station capacity by scheduled to come on line during 2013, with 2017. a unit being commissioned each quarter of Eskom’s Build Programme aims to leave that year. a big legacy. As Eskom builds power sta- Eskom is also in the process of bringing tions, it creates thousands of jobs and fully back to service three previously mothballed functional infrastructure in those areas, from schools and homes, to water systems and In October 2010, investors were deliberating on a clinics. feasibility study into the creation of a mega solar Most of the capital expenditure will go i park in Upington, in the Northern Cape, where towards building three new power stations, government envisages that some 5 000 MW namely Medupi, Kusile and Ingula power of renewable energy could be produced. The venture could also place the country as a leading supplier of stations. various solar solutions and products, leading to more Medupi, which is being built in , foreign investment and job creation. in Limpopo, is a coal-fired power station and Initial estimates put the costs of the solar park at will consist of six 800 MW units with total around R150 billion to be spilt between government and installed capacity of 4 800 MW. the private sector.

Energy – SOUTH AFRICA YEARBOOK 2010/11 184 power stations, Camden (1 520 MW), Solar-passive building design Grootvlei (1 175 MW) and Komati Research has shown that low-cost hous- (955 MW). ing could be made “energy smart” by using By mid-2010, two open cycle gas turbine elementary “solar-passive building design” power stations were being built in the West- practice. This could result in fuel savings of ern Cape: Ankerlig, which is in Atlantis and as much as 65%, which could significantly Gourikwa in Mossel Bay. benefit households’ energy costs. The in Mpumalanga Energy-efficient homes may be con- was also in the middle of an expansion structed at the same direct cost (and lower project, which will see it with additional life-cycle cost) as energy-wasteful houses. capacity of 300 MW. The challenge is to develop awareness The life span of , also and to ensure implementation of basic in Mpumalanga, will be extended to enable energy-efficiency principles. Government it to operate until 2028. is considering the following building norms in Mpumalanga is going through a refurbish- and standards: orientation for the purposes ment process to meet the lifespan require- of passive solar design, lighting, and instal- ment of 50 years. lation of solar water-heaters, insulation, Along with power stations being built, ventilation, heating and air conditioning. refurbished and extended, transmission lines are also receiving attention. Some Solar-thermal power generation 1 962 km of high-voltage transmission lines The minimum direct normal radiation (DNR) were built in the past four years, as well as to justify a combined solar-thermal power numerous new transmission substations and plant is 1 800 kWh/m2 per year. Accord- transmission network upgrade projects. ing to the Renewable-Energy Resource The construction of the 765-kV ultra high- Database, the area exceeding the minimum voltage line to the southern and western required DNR in South Africa covers about Cape is progressing well. 194 000 km2. A 100-MW solar-thermal plant The Apollo Substation refurbishment was requires roughly 3 km2 (1 800 kWh/m2 per completed in May 2008. This increased the year). availability and maintainability of the Cahora If 1% (1 940 km2) of the identified area Bassa/Apollo high-voltage direct current is available for solar-thermal power genera- interconnection. tion, South Africa has an installed potential of 64,6 GW, which is about 36 217 GWh Solar per year. Back-up and energy-storage con- Most areas in South Africa average more straints are limiting the wider economic use than 2 500 hours of sunshine per year, of solar-electricity generation (solar thermal and average daily solar-radiation levels and PV). range between 4,5 and 6,5 kWh/m2 in one day. The southern African region, and in Wind fact the whole of Africa, is well endowed Eskom’s Klipheuwel, just north of Cape with sunshine all year round. The annual Town, is the first large wind-turbine facility 24-hour global solar radiation average is in sub-Saharan Africa. The pilot phase of about 220 W/m2 for South Africa, com- the Klipheuwel research and demonstration pared with about 150 W/m2 for parts of the project ran from 2002 to 2005. United States of America (USA), and about During that time, the Klipheuwel Pilot 100 W/m2 for Europe. Wind Farm generated more than 12 GWh This makes the local resource one of the of electricity, reducing carbon-dioxide highest in the world. The solar resource is emissions by 11 000 t. The three wind tur- the most readily accessible in South Africa. bines operated at an average availability It lends itself to a number of potential uses. of 90%. The project’s research phase has The country’s solar-equipment industry been completed and the wind farm will be is developing. Annual photovoltaic (PV) operated commercially for its anticipated panel-assembly capacity totals 5 MW, and a 20-year lifespan as calculated from 2006. number of companies in South Africa manu- The R75-million national demonstration facture solar water-heaters. project in Darling in the Western Cape was Solar power is increasingly being used the first “green-energy” initiative in the coun- for water-pumping through the rural water- try to produce electricity from wind power on provision and sanitation programme of the a commercial basis. Department of Water Affairs.

185 SOUTH AFRICA YEARBOOK 2010/11 – Energy The has four wind Ocean energy turbines, which can supply 5,2 MW. All the Ocean energy could potentially be derived electricity produced would be sold to the from the various characteristics of the sea. City of as part of a long-term For example, the rise and fall of the waves power agreement with the city. The facility could be converted into hydraulic pressure consists of four German-designed wind by mechanical compression devices. turbines. The structures are 50 m high with Such pressure could drive a turbine gen- the blades spanning 31 m. Each turbine will erator to produce electricity, while the tidal produce 1,3 MW, bringing the total output of variation, sea current and different thermal the wind farm to 5,2 MW. layers in the ocean could also be used. The project is referred to as the National The main reason why this energy resource Demonstration Project and will be used as is not currently being harnessed is that no an example for future public-private partner- reliable technology exists that can generate ships in the establishment of alternative electricity from this resource. electricity generation. Various companies are testing systems The project was developed through col- internationally to develop technically viable laboration between the Darling Independ- solutions. Once technical reliability has been ent Power Producer, the Development proven, cost-effectiveness in relation to Bank of Southern Africa and the CEF. The other solutions will have to be established. Danish International Development Agency Eskom continues with resource surveys also funded part of the project. of the Agulhas Current on the east coast In May 2010, the Minister of Energy, of South Africa and of wave energy, in Ms Dipuo Peters, launched the first com- partnership with the Department of Environ- mercial wind farm at the Coega IDZ, Port mental Affairs and the Bayworld Centre for Elizabeth, in the Eastern Cape. Research and Education. The wind farm will have a total power Results have proved the technical fea- capacity of 57,5 MW, which is about 10% sibility of extracting significant large-scale of the Nelson Mandela Bay electricity con- renewable energy from the current. sumption, and can power about 80 000 homes with green energy. Sustainable development on the African continent Hydro The Intergovernmental Memorandum of The Baseline Study on Hydropower in Understanding (MoU) on the Western South Africa, an assessment conducted Power Corridor Project was signed in Octo- by the former Department of Minerals and ber 2004. Energy in 2002, indicated that specific areas This New Partnership for Africa’s Devel- in the country show significant potential for opment flagship programme intends to pilot developing all categories of hydropower in the use of hydroelectric energy of the Inga the short and medium term. rapids site in the Democratic Republic of The Eastern Cape and KwaZulu-Natal Congo (DRC). It aims to ensure the security are endowed with the best potential for developing small, that is, less than 10 MW hydropower plants. The Wind Atlas Project is a four-year project The advantages of these plants are that i covering areas of the Northern, Western and Eastern Cape. It consists of five working pack- they can either be stand-alone or exist in a ages that will be combined in a wind atlas and hybrid combination with other renewable- database. energy sources. In September 2010, the Minister of Energy, Ms Dipuo Advantage can be derived from the asso- Peters, launched the wind measurement work pack- ciation with other uses of water (such as age, which consists of 10 wind measurement stations installed over the project area. water supply, irrigation and flood control), The 10 wind measurement stations are in operation which are critical to the future economic and the measured wind data can graphically be viewed and socio-economic development of South and downloaded from http://wasadata.csir.co.za/wasa1/ Africa. WASAData. Eskom has started the construction The first wind atlas and database will be published within 12 months of wind measurements. It is expected of the Ingula Pumped Storage Scheme that interim results of the wind atlas could be seen by (1 332 MW) near Van Reenen, KwaZulu- mid-June 2011. This information will be available to Natal. It is expected that the first unit will be everyone for free and will enable project developers to operational in 2013. easily identify hotspots for wind-farm development.

Energy – SOUTH AFRICA YEARBOOK 2010/11 186 of supply in the Southern African Develop- Under the SAPP banner, the countries have ment Community (SADC). pledged to support South Africa in areas of The participating utilities are those of power generation, transmission, customer Namibia, South Africa, the DRC, Botswana contributions and DSM. and Angola. The SAPP members include Empresa A joint-venture company has been formed National de Electricidade in Angola, Bot- to initiate studies determining the viability of swana Power Cooperation, Societe National the project and to build, own and operate d’Electricite in the DRC and the Electricity the infrastructure. Supply Commission of Malawi. The main project outside South Africa’s Eskom is involved in the SAPP, along borders is Westcor. It entails a five-way with other SADC country utilities, trading intergovernmental MoU signed between energy on a bilateral basis with both utilities the utilities of the DRC, Angola, Namibia, and industry as well as mining customers in Botswana and South Africa. Westcor will tap neighbouring countries. into some of the potential in the DRC. The first project is Inga III, a 3 500-MW hydro Energy and the global plant on the Congo River. environment At the same time, the countries to the South Africa is among the top 20 emitters of north could benefit through access to the GHGs in the world and is the largest emitter coal-fired power resources in the south. in Africa, largely because of the economy’s Such an arrangement should stabilise the dependence on fossil fuels. It emits more energy requirements of the region well into than 400 Mt of carbon dioxide per year. this century. The National Climate Change Strategy, Exploitation of the vast hydropower developed by the former Department of resources would constitute a significant Environmental Affairs and Tourism, requires infusion of renewable-energy resources into that government departments collaborate the energy economy of the region over the in a coordinated manner to ensure that medium to long term. response measures to climate change are The Lesotho Highlands Water Project properly directed and carried out with a could contribute some 72 MW of hydroelec- national focus. tric power to the system in the short term. The Department of Energy is expected to Global pressures regarding the environmen- respond to and mitigate climate change. tal impact and displacement of settlements South Africa is classified as a developing by huge storage dams are likely to limit the country or a non-Annex 1 country. exploitation of hydropower on a large scale. This means that within the international Irrespective of the size of installation, any political and negotiation context, South hydropower development will require authori- Africa is not required to reduce its GHG sation in terms of the National Water Act, 1998 emissions. However, the South African (Act 36 of 1998). economy depends greatly on fossil fuels for energy generation and consumption Southern African Power Pool and therefore is a significant emitter due (SAPP) to relatively high values being derived from The SAPP is the first formal power pool in emission intensity and emissions per capita. Africa. These calculations make South Africa one The objectives of the SAPP are, among of the top 15 most energy-intensive econo- other things, to: mies that contribute significantly to GHG • coordinate and cooperate in planning emissions. and operating electricity power systems Therefore, South Africa must proactively to minimise costs, while maintaining reli- move the economy towards becoming ability, autonomy and self-sufficiency less carbon-intensive, with the Depart- • increase interconnectivity between SADC ment of Energy playing a prominent role. countries to increase the reliability of The department has introduced systems power supplies to access investment through the CDM of • facilitate cross-border electricity trading the Kyoto Protocol. It has developed the • fully recover operations costs and equi- White Paper on Renewable Energy and tably share benefits, including reductions Clean Energy Development, together with in generating capacity and fuel costs, and an energy-efficiency programme, to support improved use of hydroelectric energy. diversification in pursuit of a less carbon- intensive energy economy.

187 SOUTH AFRICA YEARBOOK 2010/11 – Energy Energy and the national The strategy will ensure that the environment Department of Energy contributes to There is some contention regarding the mitigation efforts, and will position the polluting effects of the energy sector, par- department to address implications of ticularly in the Mpumalanga Highveld, where international climate-change negotiations most of Eskom’s coal-powered stations and on the country’s energy industry. The stra- the largest Sasol plants are located. tegy will maximise potential benefits and While the electricity planning process minimise risks where possible, consider- includes technologies that are currently ing technological opportunities in energy commercially available, Eskom has mod- efficiency, renewable energy and carbon elled a number of scenarios to assess the capture and storage. Possible mitigation future emission profiles and the potential measures for the energy industry as a whole contribution that near-commercial lower will be addressed, not compromising eco- carbon-emitting technologies can make to nomic growth and development and other an emission-reduction target. environmental objectives. The evaluation of these options to provide the required baseload capacity includes an Energy and the household assessment of the risks, challenges and environment opportunities to fast-track these options to Coal is used by about 950 000 households a point where they can be considered to be countrywide. This causes indoor air-pollu- viable. Examples include underground coal tion problems, which have a serious health gasification, CSP and hydro imports. impact. Given the country’s abundance of coal It has been found that in some cases, reserves and the need to balance emis- especially regarding particulate matter, expo- sion reductions with the affordability of sure can exceed World Health Organisation electricity, Eskom is looking for increasingly (WHO) standards (180 mg/m3) by factors of efficient ways of utilising coal. From a coal- six to seven during winter, and two to three technology perspective, there are a number in summer. A national programme has been of sources that continue to predict the future established to introduce low-smoke energy performance of clean coal technologies, in alternatives into the townships. terms of emissions and costs. Fuel wood is used by millions of rural Significant international research and households as their primary energy source. demonstration is aimed at improving the Studies have shown that fuel-wood users efficiency of all these technologies. The are exposed to even higher levels of par- technological advances to achieve these ticulate emissions than coal users. higher efficiencies are expected to mature The Department of Energy participates gradually between 2009 and 2030. The in the National Housing Interdepartmental next coal-fired power station (Kusile) will Task Team and has contributed towards the be carbon-capture ready. The engineering development of norms and standards for design will cater for this requirement. solar-passive and thermally efficient hous- ing design. Energy and climate change The department is investigating the intro- The former Department of Minerals and duction of improved woodstoves and other Energy developed the Climate Change alternatives, such as solar cookers and Strategy for the energy sector in 2009. The biogas, in an attempt to address these pol- document focuses on GHG emissions and lution problems. will support the department’s mitigation The White Paper on the Promotion of activities. Renewable Energy and Clean Energy The purpose of the strategy is to assist Development (2002) commits South Africa the department in establishing an effective to producing 5% of the country’s energy response to climate change, which takes supply from renewable energy sources by into consideration the key drivers and chal- 2013. lenges for the sector.

Energy – SOUTH AFRICA YEARBOOK 2010/11 188 Acknowledgements Budget Review 2008 Business Day Business Report Department of Energy Developmental Indicators, 2010 Energy Efficiency Strategy, First Review Digest of South African Energy Statistics – 2009 Engineering News Eskom Industrial Policy Action Plan Sasol Facts, 2009 South Africa: The Good News

www.ecdc.co.za www.gov.za www.cef.org.za www.hartrao.ac.za www.engineeringnews.co.za www.miningweekly.co.za www. eskom.co.za www.sabcnews.com (Knowledge Centre: Coal Powers) www.sasol.co.za www.globaldialogue.info www.southafrica.info

Suggested reading Bond, P, Dada, R & Erion, G (eds). 2009. Climate change, carbon trading and civil society: negative returns on South African investments. Scottsville: University of KwaZulu-Natal Press. Energy efficiency made simple. 2008. Bedfordview: Crown Publications. Scoping study on water use of crops/trees for biofuels in South Africa: report to the Water Research Commission. Gezina: Water Research Commission (WRC). Water conservation through energy conservation. 2007. Gezina: WRC. Winkler, H. 2009. Cleaner energy, cooler climate: developing sustainable energy solutions for South Africa. Cape Town: HSRC Press.

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