switching increasingly from coal to natural gas or where natural
gas is used as feedstock for hydrogen generation.
These near-term fuel-switching opportunities are expected to be
followed by robust Liquefied Natural Gas (LNG) market growth in
the medium-to-long term.
Consider a closer look
My book has in-depth, and very honest information, about the
risks of operating in Africa and the opportunities for significant
returns. Before dismissing my suggestions, I encourage drillers to
utilise this resource.
In short, it would be a mistake for international oil companies to
ignore Africa. Many of Africa’s oil and gas fields were discovered
or established by US companies, from Kosmos Energy’s
discoveries in Ghana and offshore Senegal to Vaalco Energy’s
success offshore Gabon. They took a chance in these frontier
markets—and their investments have really paid off.
This article first appeared in USA Today.
About the author
NJ Ayuk is Executive Chairman of the African Energy Chamber,
CEO of pan-African corporate law conglomerate Centurion
Law Group, and the author of several books about the oil and
gas industry in Africa, including Billions at Play: The Future of
African Energy and Doing Deals. •
POSITIVE STEPS FOR
RENEWABLES IN SA
GRI Towers South Africa, the country’s only operational producer
of wind towers, says that government has achieved positive
momentum in the past few months by taking decisive steps
towards implementing a new independent energy procurement
round. This is a good sign for foreign companies that have
invested in South Africa’s renewable energy sector.
According to Daniel Erasun, plant manager at GRI, GRI is foreign
direct investment in action. GRI Renewable Industries, based in
Spain, has 16 wind energy industrial component manufacturing
facilities in eight countries. “Our operation in Atlantis in the
Western Cape, opened its wind tower manufacturing plant in
2014, creating over 300 jobs and developing key skills in the
process. The plant has the capacity to manufacture more than
150 wind towers per year. This is the equivalent of supplying
400MW in new-build wind farms per annum. However, until the
Renewable Energy Independent Power Producer Procurement
(REIPPP) round 5 procurement is implemented, wind projects
cannot move forward, and it is becoming increasingly difficult
to motivate our international shareholders to wait it out,” says
Erasun.
JSE-listed energy investment company Hulisani (HUL) holds equity
investments in diverse but related renewable energy businesses.
Marubini Raphulu, CEO at Hulisani, believes that the global
economic fallout of Covid-19 exposes the need for South Africa
to diversify its supply chain by procuring a greater percentage of
inputs locally. “It would be a travesty if local wind farms import
components and towers from other countries when they are
available here. Local content requirements should be increased
and must be consistently applied in the rush to add energy to the
grid. Industry is ready to partner with government to speed things
up and ramp up local production,” he says.
South Africa’s blueprint of government plans for energy, the
Integrated Resource Plan (IRP), requires the country to build
25 000–30 000MW of power by 2030, of which wind is set to
contribute 18%.
After a nearly three-year hiatus in the programme, in April
2018, Eskom entered into power purchase agreements for 27
large-scale renewable energy projects procured in round 4 of
REIPPP. The IRP was released in 2019 and is awaiting processing
by the regulator, NERSA, before generation capacity can be
procured. NERSA has released consultation papers for both the
supply of emergency power and short to medium term energy
supply, which should see the process finalised by the end of the
year. Meanwhile, the Minister of Energy has made a Section
34 determination which allows for energy generation. All that
remains is to set in motion the procurement for REIPPP round 5.
“Buying in local currency also brings greater price stability,
whereas USD and Euro-based procurement is now subject to
extreme currency fluctuations. In addition, the ability to deliver
components has been severely constrained due to interrupted
supply chains. It makes sense to use existing resources in the
country and it will have the added benefit of boosting job
creation and skills development,” says Raphulu.
Hulisani’s investments include solar farms, peaking plants, hybrid
captive power plants, wind farms, wind tower production and
property lease cash flow management. •
48 • African Mining • May 2020
www. africanmining.co.za