SA inks deal with Chinese firms to fix energy crisis – and urges them to “work with speed”

In a move that began to take shape in June, South Africa has turned to several Chinese entities to lead a quick fix for loadshedding and help Eskom slash emissions.

By Victoria O’Regan

Electricity Minister Kgosientsho Ramokgopa has signed a joint memorandum of cooperation (MoC) with eight Chinese power companies to help South Africa solve its energy crisis and advance its energy transition.

Speaking at the signing ceremony on the sidelines of the BRICS Summit in Sandton, Ramokgopa said the deal with the Chinese companies underscores the deepening of South Africa-Chinese cooperation in the energy sector. The eight companies have technology that can help Eskom to reduce emissions while improving performance at its coal-fired power plants, he said.

He added that the Chinese firms had also agreed to help Eskom in developing its transmission and distribution infrastructure.

“I am more than confident that South Africans are going to see the benefits of this relationship when we end loadshedding – and we will end loadshedding,” said Ramokgopa.

The eight companies are the State Grid Corporation of China (SGCC), China-Africa Development Fund (CADF), China Energy International Group (CEIG), China General Nuclear Power Corporation (CGN), China National Electric Engineering Company, Huawei Technologies, TBEA, LTD, and Global Energy Interconnection Development and Cooperation Organisation (GEIDCO).

Ramokgopa said the MoC had been in the works since he visited China in June 2023. According to a version of the MoC released to the media, it will remain in effect for three years, with an option to renew it for an additional two years.

The MoC signing comes a day after Chinese President Xi Jinping’s state visit to South Africa, the morning before the BRICS Summit began. His rare venture outside China is an opportunity to cement relations with Pretoria – China’s key partner in Africa.

Reporting back on his closed meeting with Xi at the Union Buildings on Tuesday, Ramaphosa revealed the Chinese government had donated R167-million in emergency power equipment and made available a grant of about R500-million as developmental assistance, to help South Africa out of its energy bind.

“Energy cooperation with China is a recent development that we look to deepen, particularly in line with our respective commitments to low-carbon, climate resilient development,” Ramaphosa said.

During Xi’s visit to the Union Buildings, Ramokgopa signed a Framework Agreement on Cooperation in Green Energy and an Exchange of Letters between South Africa and China on the donation of emergency energy equipment.

Speaking on Tuesday, the minister said the “donations are not attached to any conditions”.

He said the donation will assist in providing uninterrupted power supply to more than 500 public facilities in the country, including clinics, hospitals and police stations.

South Africa is enduring its worst year for power cuts by the monopoly energy utility Eskom. The country is currently experiencing loadshedding at stages 1 and 3.

Speaking at the signing ceremony of the MoC, Ramokgopa said he had impressed upon the heads of the eight Chinese firms that they needed to “work with speed”.

The chairperson of the China Africa Development Fund, Song Lei – who was among the signatories of the MoC – suggested South Africa should streamline bidding and tender processes and relax BEE regulations to be more efficient.

“If we stick strictly to the current bidding and the tendering framework, it might be difficult to be very efficient. So I suggest further organising and streamlining the bidding and tendering procedures, especially emergency and major power projects. Consider allowing direct participation of Chinese power enterprises through integrated investment, construction and the operation models,” said Lei.

The value of grid expansion is going to run to hundreds of billions of rands. South African business was concerned about losing out to Chinese corporations in the large-scale roll-out of renewable energy infrastructure.

Responding to questions on Tuesday about whether he will engage with the other BRICS nations on energy-related issues, Ramokgopa said South Africa would engage with other countries to further cooperation in the energy sector.

“This is not restricted to them [China], it’s just that they’re moving fast.”

Article courtesy of Daily Maverick

Agreements to aid energy solutions

Minister in the Presidency for Electricity, Dr Kgosientsho Ramokgopa has emphasised that the agreements signed in the past week with Chinese state-owned entities and the donation by the People’s Republic of China are to address this country’s emergency energy solutions.

South Africa concluded a significant amount of agreements with Chinese state-owned entities (SOEs) with the signing of two overarching memoranda that were witnessed by President Cyril Ramaphosa and President Xi Jinping.

Ramokgopa explained that the two agreements include amongst others, addressing issues of green energy solutions, exploitations of renewable energy sources and the use of modern technology.

“The two agreements – the first one addresses issues around green energy solutions – the partnership agreement we will be entering in relation to the exploitation of renewable energy sources in our country; the use of modern technology and the degree to which we are able to connect renewable energy onto the grid.

“The rationale for entering with the Chinese in this regard is because they are a dominant player in the renewable energy space. They have 688 gigawatts of installed capacity of renewables, a combination of PV and wind. They have done one of the biggest expansions of transmission and they have also worked on the kind of transmission modernisation required to be able to accommodate the intermittency of renewable sources,” the Minister said.

In regards to the donation by the People’s Republic of China, the Minister said this is aimed at addressing South Africa’s emergency energy solutions, which are targeted at key public facilities such as police stations, health institutions and correctional centres.

Minister Ramokgopa emphasised that provincial departments will play a role in identifying the key public areas.

“The second one was an exchange of letters in relation to a donation that we are receiving from the People’s Republic of China that is meant to help us in addressing the emergency energy solution in the country.

“I did indicate that it’s likely going to be targeted in key public facilities such as hospitals, clinics, correctional services, and police stations. In this regard, we will be working with the nine provincial governments for them to be able to identify sites that are suitable for this.

“We already have a technical capacity that is supporting us in relation to the appropriateness of the technology solutions that are given to us and those that have been agreed upfront,” he said.

Ramokgopa further announced that the first shipment of the technology solutions by China is en route and an announcement will be made when it arrives in the country, having left Chinese shores on 14 August.

“We will announce at the right time when the first shipment lands and give an indication of the first public facilities that will benefit from this generous donation.”

Turning to the performance of the system for the past week, the Minister said that the available capacity has come down.

“I did indicate that we are beginning to normalise being above 28 000 megawatts on average. We have kept close to that most of the week and the average is about 27 561 megawatts,” he said.

“We did indicate that we were going to slow down planned outages and once we get out of a very difficult winter we are going to ramp up because we need to protect these machines, generation and units to ensure their sustainability and reliability going into the future.

“We still remain above 15 000 megawatts in relation to unplanned capacity lost factor. I made a point that we want to bring it down,” the Minister said.

Load shedding

On load shedding, Ramokgopa said government was confident the system was stabilising and the country will continue to have lower stages of loadshedding as the system recovers.

“On the issue of performance, we are more than satisfied. We have shown where we moved from a historic low of 48% of the energy availability factor. We have been averaging 60% energy availability factor.

“When we went to the winter period, the worst-case scenario was Stage 8. We only had 30 hours of Stage 6. You can see the intensity of loadshedding is coming down. The issues of outage slips, I have shown to you, they have come down from a high of 3 300 megawatts to 766 megawatts,” the Minister said.

Article courtesy of SAnews.gov.za