ENGIE’s businesses in South Africa

ENGIE has a presence in South Africa since 1994, specifically in energy efficiency services , and is the country’s number 1 independent power producer. The Group aims to support the government in defining a balanced energy mix based on renewable energies (solar energy, wind power) and natural gas.

South Africa context

With a population of 52 million and an estimated GDP of USD 350 billion accounting for more than 25% of GDP in sub-Saharan, South Africa is the second largest economy in Africa after Nigeria. In the energy sector, the country is the biggest electricity market in Africa, with an installed power generation capacity of more than 45 GW, but it still struggles with under-production. Some 25% of the population does not have access to electricity and the distribution grid suffers from under-capacity, exposing the country and industrial companies to frequent load-shedding risks. In its COP21 contribution to take on energy transition, South Africa reasserts the commitment it made in Copenhagen to reduce CO2 emissions by 34% by 2020 and 42% by 2025 compared to a ‘business as usual’ scenario. To reach these targets, the country is establishing a carbon tax, implementing precise regulatory limits for each sector of the economy and modifying its energy mix, specifically by developing renewable energies and replacing coal-fired power plants.

  • Regional HQ : Johannesburg

Power production

South Africa has a high level of Renewable Energy potential and presently has in place a target of 10 000 GWh of Renewable Energy. The Minister has determined that 3 725 megawatts (MW) to be generated from Renewable Energy sources is required to ensure the continued uninterrupted supply of electricity. This 3 725 MW is broadly in accordance with the capacity allocated to Renewable Energy generation in IRP 2010-2030. The following shall be considered qualifying technologies eligible for selection under this Renewable Independent Power Producer Procurement Programme (“REIPPP”) and the generation capacity allocated to each is : onshore wind power (1 850 MW), concentrated solar thermal (200MW), solar photovoltaic (1 450), solid biomass (12.5MW), biogas (12.5MW), landfill gas (25MW), small hydropower plant (75MW) and small projects (100MW).

Source: REIPP website: http://www.ipprenewables.co.za/#page/303)

 

ENGIE is ideally placed to address this challenge: it has had a presence in South Africa since 1994 – specifically in energy efficiency services – and is the country’s number 1 independent power producer.

The Group aims to support the government in defining a balanced energy mix based on renewable energies and natural gas.

In November 2015, ENGIE submitted bids for several solar power and wind energy projects.

  • Aurora Wind Power
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Aurora Wind Power is a 94 MW wind farm 130 km north of Cape Town near Vredenburg in Western Cape Province. It has 47×2-MW wind turbines.

Aurora Wind Power is part of the government’s REIPPP to develop renewable energies by independent power producers (the ‘world-class renewable energy IPP procurement programme’). The programme aims to develop 1 850MW of wind power over 20 years.

Construction of the wind farm began end-2013 and was commissioned in June 2015 for 20 years. This will result in 5.6 million tonnes of CO2 emission saved during that period.

The shareholding in Aurora Wind Power is held by ENGIE (43%),Investec Bank (34.5%), Kagiso Tiso Holdings (20%) and Omoya Power (2,5%). Other parties involved in the project are the EPC contractor Vestas SA, and the owner’s Engineer, Tractebel.

In accordance with the rules currently applicable in South Africa, 2.5% of the investment is ultimately held by a local community trust through a wholly owned project company, in this instance Omoya Power.

More about Aurora Wind Power Project

  • The Kathu Concentrated Solar Power plant
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ENGIE is developing a solar park in Kathu (Northern Cape Province), 620 km southwest of Pretoria, the country’s administrative capital.

This 100 MW concentrated solar power (CSP) plant uses parabolic trough technology and will be equipped with a molten salt storage system that provides 4.5 hours of battery life, thus helping to offset the intermittent nature of solar energy.    The shareholders of Kathu Solar Park comprises a group of investors, including ENGIE (48.5%), SIOC Community Development Trust (12.5%), Investec Bank (7.5%), Lereko Metier (11.5%),Public Investment Corporation (17.5%) and Local Community (2.5%). The consortium was given ‘preferred bidder’ status in January 2015. The consortium was given “preferred bidder” status in January 2015 and financial close was reached in May 2016. Construction of the CSP plant has started mid-2016.

Visit Kathu’s plant website

Video

  • Dedisa and Avon peaking power
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ENGIE is developing two thermal power plant projects in South Africa: the Dedisa and Avon peaking power plants (with a total capacity of 1,005MW).

Dedisa and Avon are new open-cycle gas turbine plants (335 MW and 670 MW) located respectively in the Eastern Cape Province near Port Elizabeth and in KwaZulu-Natal Province near Durban. The Dedisa peaking power plant achieved Commercial Operation on 30 September 2015 and first dispatch to the distribution grid on 1 October 2015. Avon peaking power is expected to reach Commercial Operation in 2016.

A 15-year power power purchase agreement was signed with Eskom Holdings  (the buyer).

The project companies that own the power plants – Dedisa Peaking Power (Eastern Cape Province) and Avon Peaking Power (KwaZulu-Natal Province) – are held by ENGIE (38%), Legend Power Solutions  (27%), Mitsui & Co (25%) and The Peaker Trust through Avon BBBEE and Dedisa BBBEE respectively (10%).

The Dedisa plant is essential for the development of the 11,500 hectare industrial development zone in Port Elizabeth, specifically for key sectors such as metalworking and aquaculture. This power plant is one of the biggest investments in the zone and has created 1,500 direct jobs and 1,000 indirect jobs in a region highly impacted by unemployment.

 

  • Solaire Direct

Solaire Direct, a wholly owned subsidiary of ENGIE specializing in solar energy, has been present in South Africa since 2009. Solaire Direct is currently in charge of two projects in Aurora and Vredendal (Western Cape Province) with a total installed capacity of 21 MW. These two solar PV parks are part of advanced regional projects involving local authorities and stakeholders.

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More about Solaire Direct

Energy efficiency services

Our energy services subsidiaries are involved in various businesses such as technical assistance, special piping and machinery installation, aeronautical systems, paper mills and engineering studies.

 

  • ENDEL Engie South Africa

ENDEL Engie South Africa has been awarded for the construction of a power plant  – Eskom Kusile power station is located at 120 km from Johannesburg in the Nkangala district of Mpumalanga.

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It will comprise 6 power generation units, each rated at an 800 MW installed capacity for a total capacity of 4 800 MW. A contract was signed with ASLTOM for the Equipment and Piping installation of Unit 3.

Social Programmes

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In South Africa ENGIE supports the Valued Citizens Initiative, a non-governmental organization which organizes educational support and social programs in public schools, including in Saldanha Bay near the Aurora Wind Power. The NGO encourages personal development and civic engagement within a democratic context.

The ENGIE Foundation has also been a partner to the Valued Citizens Initiative since 2002 in its campaigns to support education and youth.

From 2002 to 2009, the Foundation supported the Values in School program, which set up workshops to raise awareness about constitutional values and citizenship in schools in South Africa.

The ENGIE Foundation has been funding the Inspire program since 2009. This project helps girls develop their leadership skills, expand their horizons and take control of their lives, while fighting gender inequality and poverty in their communities. To that end, the association organizes leadership training camps for 50 disadvantaged girls and 50 girls recognized as leaders in their schools. The girls must then organize a citizenship project in their school involving other pupils. The ENGIE Foundation funds this program in KwaZulu Natal province, where the Group is located. Every year it benefits 100 girls aged 14-16 directly and around 7,000 young people indirectly (thanks to the reach of Inspire Clubs in schools). All in all, more than 600 girls have been helped directly since 2009 thanks to ENGIE’s support.

Know more about ENGIE Foundation

 

  • ENGIE launches new Schools, Lights & Rights programme

The Valued Citizens Initiative is one of the associations benefiting from this project. It will receive a grant of €17,000 to promote the civil registration of unregistered children (around 1,100 registrations) and 1,700 portable solar lamps.

The lamps help improve the everyday lives of children by enabling them to study more easily in the evening. They replace the highly polluting oil lamps that often cause domestic accidents.

Ikamva Lisezandleni Zethu is an NGO that supports and assists young people in their career development. {pictures : Ikamva Youth 1 – 4}

ENGIE & IkamvaYouth developed the FunMaths program to help pupils aged 14-15 from disadvantaged environments with subjects like maths and English. The association brings together a large number of volunteers: university students and workers, themselves often former beneficiaries of the program. ENGIE funds the deployment of the program in six of the association’s ten branches, benefitting 247 children.

Social programmes have been set up near the sites of the Avon and Dedisa power plants. ENGIE established an independent fund to ensure that local black organizations and communities can benefit from these projects. The Peaker Trust holds a 10% stake in the project companies; it was created to fund social and educational programmes. All of the Trust’s dividends will go to local socioeconomic development initiatives for at least 15 years, for the entire duration of the power purchase agreements.

Discover all ENGIE’s businesses in Africa