Industry planners hope that the proposed unbundling of Eskom will herald in a new competitive landscape promoting capital investment flows into and within South Africa's power sector, but new research by African Energy finds that renewable energy targets are unlikely to be met and the risk of value-destructive load shedding looks certain to be an unfortunate reality for the foreseeable future.
Make sound investment decisions with African Energy's South Africa Power Report 2020/21 - a comprehensive guide to the risks, realities, opportunities and threats associated with entering South Africa's electricity industry.
Providing incisive insight, expert analysis and unrivalled data on African energy industries:
How does COVID-19 and the credit rating downgrade impact on South Africa's economy and medium-term outlook?
Will installed capacity meet government targets by 2030?
What future role does coal-fired generation have in sector planning?
What opportunities are there for alternative fuels such as gas?
After decades of dominance, are there early signs that the ruling ANC is losing its grip on power?
Reasons to buy this report:
Identify upcoming opportunities and threats
Assess South Africa's risk profile
Understand policy direction and regulatory requirements
Benefit from independent power generation forecasts based on the actual project development pipeline
Know the competitive landscape
Understand the political and economic context.
The report provides unique access to:
African Energy's own Risk Management Index and 15-year (2010-2024) power supply analysis using African Energy Live Data - our proprietary database of more than 6,500 power projects - to identify trends on installed capacity broken down by fuel, technology, provinces and more.
South Africa Power Report 2020 also provides comprehensive information on existing and planned generation projects; an appreciation of the political risk and the key players in the sector; an overview of the macroeconomic climate and outlook; details on the market structure and operations, analysis of policy and regulation including future plans, major legislation and legal requirements for generation, transmission and distribution; and natural gas resources and availability.
Key Topics Covered
1. EXECUTIVE SUMMARY
2. RISK MANAGEMENT REPORT
3. POLITICAL OVERVIEW 3.1 Structure of government 3.1.1 Political system 3.1.2 Three tiers of government 3.1.3 Executive authority 3.1.4 Legislative authority
Box 1: Cyril Ramaphosa: a multi-faceted career
3.1.5 An independent judiciary under heavy stress 3.2 Stability of political system 3.2.1 A social contract under pressure 3.2.2 Divisions within the African National Congress 3.2.3 State capture' and other governance concerns 3.3 The main political parties 3.3.1 Governing party: the African National Congress
Box 2: Profiles of leading ANC actors
3.3.1.i Factional divisions 3.3.2 The official opposition party: Democratic Alliance
Box 3: Profiles of leading Democratic Alliance figures
3.4 Elections 3.4.1 Electoral system 3.4.2 Most recent election 3.4.3 Voter disenchantment 3.4.4 Next elections 3.5 Corruption 3.5.1 Resistance to change 3.5.2 Foreign courts and state capture 3.5.3 Transparency International rating 3.6 Security risk 3.6.1 Personal security and criminality 3.6.2 Risks of political violence 3.6.3 Risk of terrorism 3.6.4 Risk of ethnic/tribal conflict 3.7 Political economy and major policy initiatives 3.7.1 Downgrades and gridlock in the political system 3.7.2 Economic policy 3.7.3 National Development Plan 2013-30 3.7.4 Economic stimulus, recovery plans and social uplift 3.8 Eskom and the ESI crisis 3.8.1 The politics of private energy investment
Box 5: Minister of mineral resources and energy Gwede Mantashe
Box 6: The 2019 Integrated Resource Plan
3.8.2 Climate change
4. MACROECONOMICS 4.1 Overview 4.1.1 Reform and missed targets 4.1.2 A very difficult outlook 4.2 Economic structure and stunted growth 4.2.1 Trends/projections 4.1.2 Breakdown of economy by sector 4.3 Inflation and the central bank 4.4 Fiscal deficit and debt: rising fast under SOE burden 4.4.1 State-owned enterprises - Eskom - South African Airways - Denel 4.4.2 The 2020 budget 4.4.3 Risk of debt distress - Debt-to-GDP - Debt service-to-revenue 4.4.4 Major creditors and future borrowing 4.4.5 Potential IMF deal 4.5 Balance of payments 4.6 Foreign reserves and the rand 4.7 Credit ratings 4.8 Key lending rates 4.9 WBG Ease of Doing Business 4.10 Major recent developments
MAP: SOUTH AFRICA'S ELECTRICITY INFRASTRUCTURE
5. POWER SECTOR OVERVIEW 5.1 Overview 5.2 Market structure 5.2.1 Future developments 5.3 Profiles of institutions 5.3.1 Utilities - Eskom Holdings 5.3.2 Regulators - National Energy Regulator of South Africa 5.2.3 Ministries - Department of Mineral Resources and Energy - Department of Public Enterprises - National Treasury - IPP Office 5.4 Market operation 5.5 Sector history 5.5.1 Ownership and organisation history 5.5.2 Role of independent power producers 5.6 Regional electricity trade 5.7 Financial challenges 5.8 Main consumers of electricity
6. POWER SECTOR POLICY AND REGULATION 6.1 Overview 6.2 Major legislation - National Energy Act, 2008 - National Energy Regulator Act, 2004 - Electricity Regulation Act, 2006 - Nuclear Energy Act, 1999 - Grid Code - National Environmental Management Act, 1998 - Public Finance Management Act, 1999 - Draft Public Procurement Act, 2020 - Carbon Tax, 2019 - Independent Market Operator Bill, 2019 6.3 Sector plans and policies - White Paper on Energy Policy, 1998 - Renewable Energy Policy White Paper, 2003 - Integrated Energy Plan, 2016 - Integrated Resouce Plan, 2019 - Gas Utilisation Master Plan - Eskom Transmission Plan, 2020-2029 - Roadmap for Eskom in a Reformed Electricity Supply Industry
Box 7: Key aspects of the Eskom Roadmap
6.4 Legal requirements 6.4.1 Generation 6.4.2 Transmission 6.4.3 Distribution 6.4.5 Economic empowerment 6.5 Procurement 6.5.1 Competitive bidding - Renewable Energy Independent Power Producer Procurement (REIPPP) programme - Small Projects Independent Power Producer Procurement (SPIPPP) programme - Coal Baseload IPP procurement programme - Battery energy storage systems - LNG-to-power IPP procurement programme - Risk Mitigation Power Purchase Programme 6.5.2 Municipality procurement 6.6 Tariffs 6.6.1 Regulatory clearing account 6.6.2 Wholesale 6.6.3 Retail 6.6.4 Differences between Nersa and Eskom tariffs 6.7 Currency risk 6.8 Major adverse incidents affecting IPPs - Eskom refusing to approve REIPPP projects - Budget quote and transmission delays for REIPPPs - Sacking of Karn Breytenbach 6.9 Guarantees and mounting government liabilities
Box 8: Eskom - a failing giant
7. FROM THE NEWSLETTER
8. RESOURCE AVAILABILITY 8.1 Overview 8.2 Hydrocarbons market 8.2.1 Overview 8.2.2 Key agencies - PetroSA - Petroleum Agency of South Africa - iGas - Transnet 8.2.3 Legislation - The draft Upstream Petroleum Resources Development Bill 8.2.4 Licensing 8.3 Coal 8.4 Crude oil 8.5 Natural gas 8.6 Liquified natural gas 8.7 Geothermal 8.8 Solar 8.9 Wind 8.10 Hydroelectricity 8.11 Shale gas 8.12 Regional gas 8.12.1 SADC master plan 8.12.2 Mozambique: from modest producer' to global player - Export LNG project - Potential pipeline projects 8.12.3 Sasol's Mozambique play and gas transition strategy 8.12.4 Potentials for indigenous gas production coupled with LNG imports - Other sources of gas
MAP: SOUTH AFRICA'S OIL AND GAS INFRASTRUCTURE
9. COMPETITIVE LANDSCAPE 9.1 Overview 9.2 Landmark power projects - Largest power plant: Medupi Coal - Kusile Coal - Largest nuclear: Koeberg Nuclear - First IPP: Rand Central Electric Works Coal - Largest operating IPP: Avon Diesel - First REIPPP: Kalkbuit Solar - Largest state-owned project: Kendal Coal 9.3 First renewable IPP procurement round: REIPPP round 1 9.4 Under construction generation projects - Aggeneys Solar PV - Bokamoso Solar PV - Copperton Wind - Droogfontein Solar PV II - Dyason's Klip Solar PV I - Dyason's Klip Solar PV II - Garob Wind - Greefspan Solar PV II - Kangnas Wind - Karusa Wind - Konkoonsies Solar PV II - Ngodwana Mill Lignin Expansion - Nxuba Wind - Oyster Bay Wind - Perdekraal East Wind - Roggeveld Wind - Sirius Project One Solar PV - Soetwater Wind - Waterloo Solar PV 9.5 Selected key developers - Actis 115 - Biotherm Energy - Acwa Power - Juwi Renewable Energies - Mulilo Renewable Energy - Sasol - SolarReserve South Africa 9.6 Selected key financiers - Absa Bank Ltd - Nedbank and Nedbank New Energy Finance - Phakwe Group - Old Mutual Investment Group South Africa Ltd
10. TRANSMISSION AND DISTRIBUTION 10.1 Overview 10.2 T&D losses 10.3 Critical issues facing the network 10.4 Sector reforms 10.5 Planned grid improvements 10.5.1 Strategic Grid Plan 2040 10.5.2 Transmission Development Plan (2020-2029) 10.6 Regional trade 10.6.1 Southern African Power Pool - Bilateral contracts - Competitive market 10.6.2 Existing interconnections 10.6.3 Planned interconnections - Botswana-South Africa (BoSa) - Mozambique-Zimbabwe-South Africa (MoZiSa) 10.7 Electricity imports/exports 10.7.1 Imports 10.7.2 Exports
11. OFF-GRID 11.1 Overview 11.2 Off-grid legislation and strategies 11.2.1 Integrated National Electrification Programme 11.2.2 New Household Electrification Strategy 11.3 Electrification and access rates - National - Urban - Rural 11.4 Initiatives and programmes 11.4.1 Off-grid Solar Home System Programme South Africa 11.5 Off-grid regulation 11.5.1 Electricity Regulation Act of 2006 11.5.2 Solar Home Systems 11.6 Selected off-grid players 11.6 Embedded generation 11.6.1 Mines
12. DEMAND AND SUPPLY OUTLOOK 12.1 Overview 12.2 Demand 12.2.1 Projections 12.2.2 Factors influencing growth 12.3 Generation 12.3.1 Government projections - Medium-term system adequacy (2019-2024) - Integrated Resource Plan 2019 (2019-2030) 12.3.2 African Energy pipeline 2020-2024 12.4 Demand and supply outlook, 2020-2030 12.5 The cost of cleaner coal
13. DATA TABLES - Methodology - Installed capacity, RE vs non-RE, 2010-2024 (MW & %) - Installed capacity by fuel type, 2010-2024 (MW) - Installed capacity by fuel type, 2010-2024 (%) - Installed capacity, liquid fuels breakdown, 2010-2024 (MW) - Installed capacity, liquid fuels breakdown, 2010-2024 (%) - Installed capacity by technology type, 2010-2024 (MW) - Installed capacity by technology type, 2010-2024 (%) - Installed capacity by ownership type, 2010-2024 (MW) - Installed capacity by ownership type, 2010-2024 (%) - Installed capacity by provinces, 2010-2024 (MW) - Installed capacity by provinces, 2010-2024 (%) - Installed capacity by fuel, Eastern Cape, 2010-2024 (MW) - Installed capacity by fuel, Free State, 2010-2024 (MW) - Installed capacity by fuel, Gauteng, 2010-2024 (MW) - Installed capacity by fuel, KwaZulu Natal, 2010-2024 (MW) - Installed capacity by fuel, Limpopo, 2010-2024 (MW) - Installed capacity by fuel, Mpumalanga, 2010-2024 (MW) - Installed capacity by fuel, North West, 2010-2024 (MW) - Installed capacity by fuel, Northern Cape, 2010-2024 (MW) - Installed capacity by fuel, Western Cape, 2010-2024 (MW)