News in South Africa 23rd November:
1. Eskom in dire need of funds:
Eskom has approached National Treasury asking for another R15 billion for diesel and other fuel so that it can keep the lights on in the country.
The power utility has run out of fuel to power its open-cycle gas turbines, which are able to stave off two stages of load shedding.
The company has blown past its fuel budget, spending R12 billion, and says it cannot procure more diesel until April 2023 again.
2. Commercial property and energy issues:
Commercial property owners have applied for an urgent high court interdict, suspending the implementation of a National Energy Act regulation that requires non-residential building owners to have energy performance certificates (EPCs) for their buildings by 7 December 2022.
Those who don’t manage to secure a certificate in time face a significant fine or imprisonment.
SA Property Owners Association (Sapoa) CEO Neil Gopal said the application was lodged and delivered to the Department of Mineral Resources and Energy (DMRE) and the South African National Energy Development Institute (Sanedi), which administers the national building energy performance register, earlier this month.
Gopal said the matter is enrolled for hearing next Tuesday (29 November), adding that the DMRE and Sanedi had until 9 November to give notice of their intention to oppose the application, and no notice was received.
In terms of the National Energy Act, owners can face a fine of up to R5 million or up to five years’ imprisonment, or both, for failing to obtain EPCs for their buildings.
Gopal said despite commencement of litigation about the deadline, Sapoa is still attempting to resolve the matter amicably, and is continuing with its efforts to reach a suitable arrangement in the best interests of both sides.
He said Sapoa has been engaging the DMRE since before the publication of the regulations and increased its efforts once the regulations were published.
Practical issues
Gopal said a number of meetings have been held to highlight the practical issues experienced by members that make compliance with the regulations difficult, or may even prohibit members from obtaining EPCs.
These include that:
- To date only nine inspection bodies have been accredited, with the most recent having been accredited as late as 12 September 2022;
- The portal for the uploading of EPCs on Sanedi’s website is currently non-operational, which means it is impossible for landlords to submit their EPCs as required.
- Only a limited number of EPCs have been issued to date – just 331 as at 20 October – and considering a conservative estimate of the number of buildings still requiring EPCs,
the nine accreditation bodies will each have to issue at least 472 certificates a day, seven days a week, before the 7 December deadline, which is clearly impossible.
3. UK supports SA’s green economy:
The United Kingdom has agreed to support South Africa’s green economy even further, with heavy investment planned for developing green hydrogen in the country.
South Africa has become a key locale for foreign investment in renewable technologies. Saudi-Arabia, China, as well as the USA and key economies in the European Union have pledged billions to the country’s transition away from coal.
President Cyril Ramaphosa visited the United Kingdom this week, meeting with King Charles III and the UK’s new prime minister Rishi Sunak. Following meetings with the UK government, the nations have agreed to implement the next phase of the UK-SA Infrastructure Partnership.
According to the UK government, the next phase aims to fund projects that will create investment opportunities for UK companies upwards of £5.37 billion over the next three years and assist South Africa with its economic growth, skills development and push towards renewables.
Included in this is new grant-funded technical assistance to South Africa to unlock green hydrogen opportunities. The exact amount committed to this initiative was not disclosed.
Launched under South Africa’s recent Just Energy Transition Partnership, the UK seeks to collaborate with South Africa on new renewable energy sources.
Green ‘gold rush’
Green hydrogen has been getting a lot of attention in the renewable space as a future fuel, with many banking on it to become highly sought-after in the coming years.
According to Precedence Research, the global market for green hydrogen is anticipated to reach $89 billion by 2030, with a continuous annual growth rate (CAGR) of 54% from 2021 to 2030.
A recent South African Hydrogen Valley Feasibility Report showed that the cost of green hydrogen is predicted to be approximately $4 per kg by 2030 – a premium of between $2 and 2.5 per kg over that of hydrogen extracted from traditional methods.
Gladys Nabagala, a director of the energy transition advisory group at Royal HaskoningDHV, said that South Africa holds structural advantages that can assist in producing green hydrogen to export.
Nabagala said South Africa is in a perfect position to facilitate green hydrogen initiatives.
4. NHI bill being rushed:
The portfolio committee on health, dominated by ANC members, is rushing to push through the controversial National Health Insurance Bill, intent on getting it passed through parliament before the party’s December elective conference.
The committee hopes to have the bill passed by the National Assembly by 6 December, after which it will go on to the next stage of deliberations at the NCOP.
5. Black Friday affected by load shedding:
Eskom’s load shedding on Black Friday will make things harder for shoppers and retailers, but malls with backup power stand to win big.
The consumer frenzy on the final Friday of November will be the first in two years outside of lockdown, with retailers already gearing up for an influx of shoppers. Black Friday will see physical malls and e-commerce sites fill with bargain hunters, but load shedding has the potential to disrupt both shopping experiences.
This year’s runup to Black Friday coincides with South Africa’s worst-ever bout of load shedding, with intermittent blackouts expected to persist on the day and for months to come.
The country’s energy crisis has already dented the economy. Add in South Africa’s rampant unemployment along with rising inflation, and analysts believe that while this year’s Black Friday will still be an improvement on the previous year’s, consumer trends will be different.
“With bleak economic prospects, we can expect to see consumers stock up on necessities rather than splashing out on luxuries for themselves or buying early Christmas presents for their loved ones,” said Professor Carel van Aardt, research director at the Bureau of Market Research (BMR), which recently gave its views on the upcoming Black Friday promotional period on behalf of Capital Connect.
Shoppers rushing to stores this Black Friday will also need to contend with load shedding. Consumers arriving at stores without reliable backup power could encounter dark isles, unresponsive payment systems, and even longer queues than usual.
“Yes, load shedding will disrupt business operations and keep people away from the shops,” Gerhard Le Roux, Capital Connect’s head of capital growth, told Business Insider SA.
“South African retailers can still expect to generate around R17.3 billion in additional sales over this Black Friday promotional period, which represents a growth of 6.7% compared to the previous year. However, this is an estimated R5.4 billion less than would be the case without extreme load shedding.”
And while unprepared brick-and-mortar retailers will be hardest hit by load shedding, e-commerce could also lose out if their systems haven’t yet been stress tested with the added pressure of blackouts.
All information sourced from articles posted by: Fin24, Moneyweb, BusinessTech, BusinessLive, and Business Insider.
