Wednesday, January 4, 2012

Fracking Could Be Threat To South Africa Water Supply

Shell and several other large energy companies hope to drill thousands of natural gas wells in the region between Johannesburg and Cape Town, South Africa using a new drilling technology that can require 1 million gallons of water or more for each well. Companies will also have to find a way to dispose of all the toxic wastewater or sludge that each well produces, since the closest landfill or industrial-waste facility that can handle the waste is hundreds of miles away.

South Africa is among the growing number of countries that want to unlock previously inaccessible natural gas reserves trapped in shale, deep underground. The drilling technology -- hydraulic fracturing, or "fracking," for short -- holds the promise of generating new revenue through taxes on the gas, creating thousands of jobs for one of the country's poorest regions, and fueling power plants to provide electricity to roughly 10 million South Africans who live without it.

But many sites here and on other continents being considered for drilling by oil and gas companies and by governments short of cash are in fragile areas where local officials have limited resources, political leverage or experience to ensure that the drilling is done safely. The new drilling, which draws strong support from the United States government, represents a boon for U.S. companies such as Halliburton, Chesapeake Energy and ExxonMobil that have greater experience with shale gas, and therefore are likely to win many lucrative contracts abroad. More than 30 nations, including China, India and Pakistan, are now considering fracking for natural gas or oil. The gas production surge has spurred interest in building pipelines and terminals that liquefy the fuel, so it can be shipped to far-flung markets.

Some economists and environmentalists say that while governments of poorer countries may benefit from new tax revenues and jobs, they may not be paying enough attention to environmental risks of drilling. They also note that local residents -- who bear the brunt of air pollution, potential water contamination from spills or underground seepage, and truck traffic tied with drilling -- may see few benefits. (Pittsburgh Post Gazette, 1/4/2012)

Wednesday, December 7, 2011

28 Renewable Energy Bidders Approved for Electricity Delivery

South Africa approved 28 bidders for a renewable-energy tender, the first step in the country's efforts to diversify from coal. The 28 preferred bidders, with projects totaling 1,416 megawatts, have until the end of June to have financing in order, with construction to begin shortly thereafter, the Energy Department said. Of the projects selected, around 632 megawatts were for solar photovoltaic projects; 150 megawatts, for concentrated solar power; and 634 megawatts, for wind developments.

The department is holding five tenders to allocate 3,725 megawatts valued around $12 billion over the next two years. In the first round of bidding, the department received 53 bidders for a total of 2,128 megawatts in projects. It selected 28 out of the 53. It now has 2,209 megawatts that companies can bid for in the remaining tenders.

Europe's biggest wind-turbine manufacturer, Denmark-based Vestas Wind Systems A/S, is involved in two of the bidding groups selected, representing 138 megawatts, as is South African solar company Momentous Energy, which will obtain some of the products from Chinese companies.

One of China's top wind turbine producers, Sinovel Wind Co., also was selected, with one of the larger bids, a person close to the matter said.

About 90% of South Africa's electricity comes from coal-fired power plants. By 2030, the country aims to lift renewable sources to 8% of the energy mix, up from less than 1% now.

In addition to development in the private sector, state-owned power company Eskom Holdings Ltd. is also raising money to develop its own wind and solar projects. Eskom last month signed a $250 million loan agreement with the World Bank to build 200 megawatts of own solar and wind projects. The company also is in talks with the European Investment Bank to obtain €50 million, or about $70 million, for building solar farms.

The South African government on Wednesday also said it will create the South African Renewable Initiative. Working with the European Investment Bank, the government plans to raise financing internationally to be used on renewable energy projects. Germany said it intends to support the fund.

South Africa is hosting the COP17 climate talks, which are led by the United Nations. It plans to reduce carbon emissions by 34% by 2020. (WSJ, 12/7/2011)

Thursday, September 16, 2010

South Africa Ends Pebble Bed Modular Reactor Program

The Pebble Bed Modular Reactor (PBMR) project has been cancelled and the program has been reduced to a few people with the focus now being on the retention of its intellectual property, certain skills and the preservation of its assets. The PBMR project has not been able to secure an anchor customer or another investment partner and it is estimated that further investment in the project could exceed an additional R30-billion. The Westinghouse consortium was lost in May when Westinghouse withdrew from the programme.

The government also announced that should the country embark on a nuclear build programme in the future it will not be using the PBMR technology, which was still in the research and design phase. The project has been missing deadlines constantly, with the construction of the first demonstration model delayed further and further into the future. Over the last years a total R9,244-billion has been invested in the PBMR project, government having contributed an amount R7,419-billion or 80,3% of that amount. Eskom also contributed 8,8% with Westinghouse and the Industrial Development Corporation (IDC) accounting for 4,9% each.

Originally, it was envisaged that Eskom would be the PBMR's anchor customer, with a possible purchase of up to 24 reactors as part of the country's expansion of its electricity generation capacity to meet increasing demand with a first demonstration PBMR to be constructed on the Koeberg Nuclear Power Station site in the Western Cape. "However, between 2005 and 2009, it became increasingly clear that, based on the direct-cycle electricity design, PBMR's potential investor and customer market was severely restricted and it was unable to acquire either; hence government has been constrained to make decisions about the future of the project. (Engineering News, 9/16/2010)

Tuesday, August 24, 2010

President Zuma on Trade Visit To China

South African President Jacob Zuma, right, is seeking to boost trade on a trip to China this week. South Africa aims to tap trade and investment in "BRIC" economies Brazil, Russia, India and China.

For Beijing, the visit by Zuma will be an opportunity to consolidate ties with African countries, where China is increasingly turning for resources, markets and diplomatic support. Late last year, Chinese Premier Wen Jiabao offered Africa $10-billion in concessional loans over three years.

Many ANC officials are starting to see the fast growth of China and other BRIC economies as proof that the state should be doing more to nurture growth -- a departure from the free-market orthodoxy that has prevailed since the end of apartheid in 1994. While Zuma is in Beijing, China and South Africa are expected to sign agreements that will include cooperation on mineral resources and transport, and to address lopsided bilateral trade flows.

China is South Africa's largest trading partner, but last year South Africa ran a $2.7-billion trade deficit with China. A Comprehensive Strategic Partnership Agreement that Zuma will sign is expected to address that. This agreement is expected to deal with the trade imbalance between the two countries and with the fact that South Africa still exports raw materials to China while importing finished products into our market. (Engineering News, 8/23/2010)

Sasol's China CTL Deal: Application Review Almost Complete

Sasol expects China’s National Development and Reform Commission to conclude a review of its application to build a 90 000-bl/d coal-to-liquids (CTL) facility in that country. Sasol entered into a 50:50 venture with Shenhua Ningxia to develop the $10-billion project, which is said to be the largest foreign single project direct investment in China and also the country's largest-ever CTL fuels project. China's National Energy Administration has appointed Chinese International Engineering Consultative Company (CIECC) to arrange a panel of experts to facilitate a review of the ‘project application report.'

The CTL plant would be Sasol's first CTL investment outside South Africa, where the technology is used to produce about 40% of the country's fuel. President Jacob Zuma traveled to China on Monday for the State visit. Zuma will visit Shanghai to view the South African Pavilion at the Shanghai 2010 World Expo. The expo was opened on May 1, and will continue until October 31. (Engineering News, 8/23/2010)

Tuesday, August 3, 2010

Treasury Considering Carbon Tax on Coal

According to industry sources, the Treasury is considering a proposal to introduce a carbon tax at source, probably of about R100 per ton. Coal companies would be taxed on the coal they deliver to Eskom, which emits the largest amount of greenhouse gases, although Eskom itself would not pay the tax. But a carbon tax of R100-R200 a ton could cause a 1 percent decline in gross domestic product in the first six years. SA has undertaken to reduce its greenhouse gas emissions 34 percent by 2020 and 42 percent by 2025.

Eskom would face higher prices for coal, forcing it to look for more carbon-efficient ways to generate electricity or it would pass the cost on to the consumer. It would also result in less incentive for Eskom to invest in technology such as carbon capture and storage. Ultimately, demand for fossil fuel would drop.

A tax of R100 a ton could generate about R45-billion in tax revenue as the country generates about 450-million tons of greenhouse gases a year. But around R650-billion in tax revenue was collected last year, so the proposed carbon tax represents a substantial additional burden and would be inflationary. (IAAfrica, 8/3/2010)

Saturday, July 31, 2010

Israel & South Africa Nuclear Weapons Alliance History


Sasha Polakow-Suransky, a senior editor at Foreign Affairs, and author of "The Unspoken Alliance," looks at the secret military partnership between Israel and apartheid South Africa following the 1967 Six-Day War (including the transfer of nuclear technology). The relationship lasted 27 years.

Commentary was provided by Avner Cohen, author of Israel and the Bomb and the forthcoming The Worst Kept Secret: Israel's Bargain with the Bomb.

This event, "Nuclear Pariahs," was hosted by the Carnegie Endowment for International Peace. Thomas Carothers moderated.