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Energy shapes the future of Africa’s automation and manufacturing industries

January 2023 News

The importance of energy security in shaping South Africa’s economic future is a key focus of the Africa Automation and Technology Fair (AATF), the continent’s most comprehensive and focused automation platform. Taking place between 9 to 11 May 2023 at the Johannesburg Expo Centre (Nasrec), it will co-locate with Future Manufacturing Africa (FMA), a new trade show dedicated to the full manufacturing value chain for the African continent.

Esteemed industry experts have been lined up to present at the dedicated conference, AATF Connect, which will be introduced by Gwede Mantashe from the Department of Energy. They include South African television presenter and moderator, Derek Watts; energy consultant, Chris Yelland; Dilley Naidoo, CEO of Madala & Associates; and Dhevan Pillay, South African Energy Conservation.

Although President Ramaphosa has said Eskom is taking active steps to add new generation capacity to the grid on an urgent basis, a key focus of AATF Connect will be to seek real answers to the many difficult questions being asked about the measures the government has identified to address the energy crisis.

The procurement of new generation capacity

As an immediate measure, Eskom will buy surplus capacity from existing independent power producers (IPPs), mines and other private entities which generate excess power, while 2600 MW of capacity has been procured through Bid Window 5 of the Renewable Energy IPP Procurement Programme (REIPPPP), which should add capacity to the grid from early 2024.

Eskom will also look to buy power from neighbouring countries with excess electricity capacity, such as Zambia and Botswana, through the Southern African Power Pool, and aims to construct its first solar and battery storage projects at Komati, Majuba, Lethabo and several other power stations. On paper, the measures for new generation capacity look positive, but there are still many gaps to be filled as to how these processes will roll out on a practical level.

Easing of distributed generation regulations and new legislation

After removing the licensing requirement for generation projects up to 100 MW in June 2021, President Ramaphosa has now announced the complete removal of the licensing requirement for embedded generation, to incentivise further private investment in electricity generation and reduce the lead times to commence construction of projects.

The term ‘embedded generation’ is ambiguous as it is understood differently in different contexts. There are also questions about transitional arrangements for those projects above the 100 MW threshold that are already in motion, and how these will be impacted.

Incentivising investment in rooftop solar through feed-in tariffs

The government has acknowledged the potential for households and businesses to install rooftop solar solutions and to connect this power to the grid. To incentivise greater uptake of rooftop solar, Eskom will develop rules and a pricing structure, known as a ‘feed-in tariff’, for all commercial and residential installations on its network. This means that those who have installed solar panels in their homes or businesses will be able to sell surplus power to Eskom. However, there are some complexities here, as most of these installations occur within municipal distribution systems rather than Eskom’s transmission systems.

Improving the performance of Eskom’s existing power stations

To address the red tape around buying spares and equipment to effect critical repairs at power stations, Eskom’s budget for critical maintenance will be increased over the next 12 months. But, if Eskom relies on emergency procurement procedures (which allows deviation from the mandatory tender requirements to buy spares and equipment on an urgent basis), this could open up the process to abuse, and has the potential to be a vehicle for corruption and looting of this increased budget allocation.

Philip Woods, events director for Business and Technology at RX Africa says: “We understand that delegates at the AATF and FMA are after real, honest discussions and debates about the burning issues that are impacting business today, and the future economic growth of our country and continent. We look forward to bringing together the automation and manufacturing industry’s major players with energy leaders to tackle the major issues affecting progress and transformation, and we are confident that the event will be of great benefit to all involved.”

Registration for both the AATF and FMA is currently open. To register or for more information, please visit https://www.africaautomationfair.com/en-gb.html




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