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SA regulator nudges forward IPP round
SOUTH AFRICA
SOUTH Africa’s National Energy Regulator NERSA on March 18 issued its second consul- tation paper for the much-delayed IPP licensing round and has raised 45 questions that must be put out for public consultation.
NERSA has asked for comments from the public by April 14 for emergency plans to pro- cure 2,000MW, and has set a deadline of May 7 for responses to the country’s full 2019 Inte- grated Resource Plan (IRP), Reuters reported.
NERSA’s announcement of the consultation process comes after South African Energy Min- ister Gwede Mantashe told NERSA that the IPP round would accept bids for a total of 11,813MW of generating capacity, 6,800MW of this being renewable, as outlined in the IRP.
The minister needs NERSA approval before he can issue a so-called Section 34 “determina- tion”, which specified how much capacity will be put out to tender via a public-private procure- ment process.
The minister has asked NERSA to agree to 6,800MW of solar and wind capacity by 2022- 24, 513MW of storage by 2022, 3,000MW of gas-fired capacity by 2024-27 and 1,500MW of
coal-fired capacity by 2023-27.
These figures were put out to public consul-
tation in 2019, and were finalised by the gov- ernment and made public, known as gazetted in South Africa, in October 2019.
Energy observers in South Africa expected these totals to be accepted by NERSA, so there are concerns that the procurement process is again being drawn out unnecessarily.
Indeed, given Eskom’s financial problems and the current power cuts in the country, there is a lack of urgency about the consultation process.
The power cuts were widely blamed for the country posting negative economic growth in the fourth quarter of 2019.
The regulator and the government in general must speed up the consultation process if the country is to procure enough IPP capacity to meet current and future needs.
The country’s previous IPP auctions proved to be a success, and commissioning more IPP capacity will help stimulate reform of the coun- try’s energy sector and the unbundling of state- owned behemoth Eskom.™
NUCLEAR
South Africa’s Necsa faces financial crisis
SOUTH AFRICA
SOUTH African nuclear operator Necsa faces running out of money as it waits for the govern- ment to approve a ZAR500mn ($29.5mn) fund- ing allocation for the financial year from April.
However, this cash injection could last only until September, according to Chris Yelland, managing director, South Africa’s EE Business Intelligence.
The crisis has revealed a number of short- term financial problems at the company, which runs various nuclear sites, such as the Safari-1 research reactor and Radioactive Waste Disposal facilities. It also runs NTP Radioisotopes (NTP), a profitable medical isotopes business, and var- ious other parts of the country’s nuclear sector.
It is not responsible for the Koeberg NPP, which is managed directly by Eskom.
However, Yelland this week highlighted that NTP had failed to approve a ZAR45mn ($2.6mn) loan to its parent Necsa. This is partly because NTP itself needs the money, and because Necsa has still not repaid an earlier ZAR58mn
($2.4mn) loan from NTP. The NTP board has agreed to defer repayment to 2021.
Yelland also said that South African commer- cial bank Nedbank was not extending its current bridging finance to Necsa, leaving the company facing the prospect of failing to pay salaries in March.
Also, the National Nuclear Regulator (NNR) announced that Necsa had not paid ZAR13mn ($767,000) of site licensing fees
Finally, Yelland said that Eskom had sent a demand to Necsa to pay its outstanding electric- ity account within 10 days, or be cut off.
Necsa is turning out to be extremely dysfunc- tional, with the board resigning in January. Min- erals and Energy Minister Gwede Mantashe then appointed former Eskom chief nuclear officer David Nicholls as chair.
The previous Necsa board, led by previous chair Rob Adams, has seen its restructuring pro- posals rejected by the Department of Minerals Resources and Energy (DMRE).™
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w w w . N E W S B A S E . c o m Week 11 19•March•2020