Page 1

PUTTING OUR WASTE TO GOOD USE – Page 27

Issue 1 / January 2009

the

Energy Journal www.cefgroup.co.za

| technology | development | innovation |

TIME TO CHANGE

South Africans are warned of dire consequences if they do not change their ways.

in this POWER Issue PetroSA powering ahead at Coega

CEF launches International Carbon Hub

Produced in association with the

Group of Companies


Contents

Trouble ahead

01

International accolades for PetroSA

02

Powering ahead at the Port of Ngqurha

03

Rollout of the Basa Njengo Magogo Programme 04 Local drive for efficient lighting

05

Billion rand solar project set to take off

06

EIB supports renewable energy market with 40 million Euro loan

07

Turning woodwaste to energy

08

iGas: At the helm of making Gas happen in Southern Africa

10

Darling generating electricity from thin air

12

SANERI: nurturing the future of energy

14

Extending South Africa’s continental shelf

16

Carbon storage atlas for SA in the making

16

CEF launches new carbon hub in London

17

The National Energy Efficiency Agency: Less is more!

18

Producing fuel from crops

20 CEF Group CEO Mputumi Damane

Torbanite project to contribute to security of energy supply

22

Oil Pollution Control South Africa are everyday heroes

24

Leading from the front at Madiba Bay

24

SASDA: creating new opportunity

25

CEF launches computer literacy project

25

CEF building a model of energy efficiency

26

Generating sustainable energy from landfill gas

27

Putting white elephant of the past to good use

28

Hydro power options under consideration

29

Contributions Writers: Bianca Pieters Mandla Tyala Direct enquiries or comments about this publication to mandlat@cefgroup.co.za

Designed and printed by iww lateral applications cc.

Energy Journal

The past few years have brought physical and economic challenges around the globe. Hurricanes Katrina, Rita and Ike in the Gulf of Mexico; earthquakes in China and Pakistan; the Tsunami in the Indian Ocean; the price of crude oil reaching US$150; the collapse of a number of major international banks, electricity outages and constraints on liquid fuel supplies in South Africa.


Trouble ahead

...if we don’t change our ways by Mputumi Damane

It is clear that there are fundamental cracks appearing in the current economic paradigm, hastened, perhaps, by humanity’s increasing desire for greenhouse gas producing energy. The spectre of global warming and subsequent climate change caused to some degree by our increasingly rapid consumption of oil, gas and coal is indeed real. The increasing population, many among which are driven by a desire to attain the materialistic lifestyle espoused in American movies, place increasing consumer stresses on a delivery system that has perhaps reached or even exceeded its sustainable output levels. A significant portion of the demand for the satisfaction of wants is being funded on credit. This demand is placing a burden on the resource supply chains, and has resulted in increasing emissions of greenhouse gases through the need for fossil energy to drive the global manufacturing engine. The need for energy to drive the functioning modern economy is understood. What is less understood is the complex relationship between our social infrastructure, economic growth and the physical constraints on the planet’s ability to provide the energy streams required. The “peak oil” debate has gained in strength over the last few years, as has the recognition of the need to interact with our environment in a more sustainable manner. This has led to a movement towards more efficient use of energy, and a trend away from fossil fuels towards renewable sources. This process will take time, and, for as long as fossil energy is cheaper than alternatives this will be the preferred source.

At CEF we recognise the challenges and are intensifying the drive to promote the efficient use of energy, and we are redoubling our endeavours to develop renewable energy options. In order to meet the energy challenges CEF is initiating projects to exploit a number of renewable and clean energy sources. These include biomass combustion and conversion, solar thermal and photovoltaic technologies, wind and landfill gas. Such technologies will become more important in the future energy mix and will contribute to greater security of energy supply. Constraints on liquid fuels will, in all likelihood, impact quite significantly on mobility and this is where radical social structural changes can be expected. The need for local, distributed energy supply options will become paramount. Much of the work in the area of renewables which is being done by CEF will fill this need. However we will need to consider what a future economic and social scenario could look like under conditions of serious constraints on energy supplies – and that calls on us to make major changes to the way we live, the way we do business and way we design our communities.

** Oil is a finite resource and production will reach a peak after which it will decline. This turning point is described as “Peak Oil”. This is sometimes referred to as “Hubbert’s Peak” after the geologist who, after analyzing oil production in the United States, predicted that production would reach a peak. Energy Journal

01


PetroSA President and CEO, Sipho Mkhize

International accolades for PetroSA PetroSA, South Africa’s National Oil and Gas Corporation and a subsidiary of CEF (Pty) Ltd, continues to cement its international reputation as an industry leader.

Its joint venture company has won a prestigious international award for the Gas-to-Liquids (GTL) technology. The GTL.F1 joint venture company, in which PetroSA partnered with two major international companies, was recently named a category winner at the Petroleum Economist Awards in London. The awards are an annual ceremony that recognises and celebrates excellence in the energy sector. A who’s who of international petroleum companies compete against each other in a variety of categories. Winners are decided by an international panel of adjudicators. Winners in each category are acknowledged as industry leaders by peers in the energy sector. Sipho Mkhize, the PetroSA President and CEO, said the award was due recognition for the company’s unrelenting quest to be a leader in the global energy sector.

02 Energy Journal

“We firmly believe in growth through partnerships,” Mr Mkhize said. “At PetroSA our vision is to be a leading African energy company. Awards like these confirm to us that we are well on our way to achieving this challenging goal,” he added. The GTL.F1 entity is a Swiss registered company, founded in 2005 by PetroSA, Statoil Hydro (Norway) and Lurgi (Germany) to market and license proprietary technologies for GTL investments. The Petroleum Economist Award is the second major international honour bestowed on PetroSA over the past year. In May last year PetroSA, as joint venture partner of GTL. F1, was presented with the CWC World GTL award for innovation in the development of the technology at a function in London.

GTL technology is recognised the world over for its ability to produce some of the ‘cleanest’ fuels on the globe. PetroSA is an acknowledged leader in the operation and development of the GTL technology. The company was the first in the world to operate a commercial size GTL refinery since 1992. The Mossel Bay refinery is the world’s largest fullyoperational GTL plant. It produces clean fuels to the equivalent of 45 000 barrels of crude per day.


POWERING AHEAD at the Port of Ngqurha

PetroSA, the national oil company and a subsidiary of CEF (Pty) Ltd, has taken a significant step closer towards realizing its planned $11bn, 400 000 barrels per day crude oil refinery at the Port of Ngqurha in Port Elizabeth, with the appointment of US-based company, KBR, as engineering contractor for the project. KBR will carry out the feasibility studies as well as the front-end engineering design (FEED) for the refinery. Dubbed Project Mthombo, the mega refinery will be the largest in Africa. It is expected to come into production in 2014. It will be located at Port Elizabeth’s Coega Industrial Development Zone. Sipho Mkhize, the President and CEO of PetroSA, has hailed the appointment of a world-class such as KBR as a giant milestone. “The refinery will play a major role in securing South Africa’s future fuel supplies,” he said. “National demand for refined fuels already exceeds South Africa’s refining capacity. Diesel consumption is forecast to grow at 6% and petrol at 2% per annum between 2009 and 2020,” Mr Mkhize added, It is estimated that by 2015, South Africa will have to import 10 billion litres of fuel per annum (200 000 barrels per day or about 20% of the national requirement) if there is no significant investment in local refining capacity. “Importing this much refined fuel will have a negative impact on the country’s foreign exchange reserves and makes national supply very vulnerable to external factors,” Mr Mkhize said.

Mkhize said KBR was appointed because of the quality and expertise of its management, its proven megarefinery expertise in the petroleum industry and its total commitment to this fast-tracked project. “We are also delighted that KBR has shown its full commitment to working with PetroSA to achieve the goals of transformation of the local petroleum industry,” he added. These goals include skills transfer, the development of BBBEE suppliers and opportunities for SA equity partnerships, in line with the Industry Liquid Fuels Charter. “The appointment of KBR as engineering partner follows the selection of other world-class organisations such as HSBC as financial advisors, KBC as technical advisors and PFC as marketing advisors to ensure that every aspect of Project Mthombo meets global best practice,” Mr Mkhize said. John Quinn, President of KBR’s Downstream division, said the company will work closely with PetroSA to develop a Competitive Supplier Development Programme to maximise Project Mthombo’s contribution to local economic growth, employment creation, skills development and BBBEE.

“KBR is pleased to continue its successful partnership with PetroSA, offering our expertise in designing this world-class facility,” he said. The Coega project is regarded as strategically important to South Africa’s economic development aspirations. The feasibility phase of the project will be concluded by September this year and final Board approval for the investment will be sought in late 2010, after which construction will begin. The refinery will improve security of supply and save the country billions of rand in foreign exchange by displacing expensive imports, while giving a much-needed boost to, in particular, the Eastern Cape’s economy. It is expected that the refinery will create about 25 000 direct and indirect jobs. Over the last six months the project has steadily achieved significant milestones. HSBC, the leading international financial services provider, have already been announced as the project’s financial advisors and United Kingdom-based KBC Process Technology as technical and commercial services advisors. The Department of Minerals and Energy has also granted PetroSA a licence to manufacture refined petroleum products at the Coega site.

Energy Journal

03


ROLLOUT OF THE BASA NJENGO MAGOGO PROGRAMME Home is where the heart is, and nowhere is this more prevalent than in Southern Africa where fires are the centre of household activities and are used for cooking, water and space heating. But in a country like South Africa with its abundance of coal, fireplaces can be hazardous, especially during winter when they cause high levels of both indoor and outdoor air pollution. Low-income households in particular depend on coal for household fuel and are especially at risk. This is set to change, thanks to an intervention that involves simply lighting a coal fire differently. CEF (Pty) Ltd is promoting the “Basa njengo Magogo” (BnM) initiative – a low-smoke fire lighting method that entails placing a few lumps of coal on the top of a fire at the right time, thereby improving ignition of the underlying coals. With the BnM there is less smoke emission, improved air quality and the respiratory hazards associated with indoor air pollution are minimised. Following initial pilot studies and experimentation with its uptake, the BnM method has finally come of age for mass roll out, and CEF has been mandated by the Department of Minerals and Energy (DME) to manage the roll out. CEF has engaged consultants to spread the benefits of this method to 20 000 households in Alexandra and 30 000 households in Soweto.

The method was discovered by 63-year-old Mrs Nobelungu Mashinini of Embalenhle Township in Secunda, during a Sasol workshop, and is named in her honour: “Basa njengo Magogo” is a Zulu phrase meaning “make your fire like the old lady”. The principle of the low-smoke method is based on the fact that smoke is generated at the hot/cold boundary. In the normal bottom-up coal fire ignition process, the smoke rises through the cold coals and thus escapes. In the top-down ignition process, the smoke rises through the hot zone and is consequently burnt.

CEF is promoting the BnM because of the pressing health and environmental impacts that low-income households are exposed to because of the way coal is being used, in open fires, mbauwulas (braziers) and old stoves.

A further boost to the proliferation of the BNM initiative is the Department of Environmental Affairs and Tourism’s (DEAT) “Clean Fires Campaign”.

It is estimated that the direct health cost associated with inhalation exposures to ambient air pollution in the Vaal Triangle is in the order of R290 million (R1200 per household) per annum. The results of studies done indicated that the implementation of BnM reduces such ambient air pollution by approximately 40%.

“Our target is to reduce air pollution in low-income settlements where people use coal as a primary source of energy. The campaign is aimed at raising awareness amongst households that use coal fires for cooking and heating, thus encouraging them to use a better methodology to make their fires,” says Mr Tsietsi Mahema, Director of Atmospheric Air Quality Information at DEAT.

04 Energy Journal

This will take the BnM method to households in national priority areas.

*The Clean Fires Campaign is being undertaken in partnership with DME, the Department of Health, CEF, Sedibeng Regional Municipality, Ekurhuleni Metropolitan Municipality, City of Johannesburg, the Jupiter Drawing Room, Eskom, Anglo Coal and Sasol.


Local drive for efficient lighting

Most of us are now aware of compact fluorescent lightbulbs (CFLs), due to the promotion of energy-saving habits.

CFLs are four times more efficient, and use about 20% of the energy required by incandescent lights, and therefore have become very popular in recent years.

Raoul Goosen, a project manager for the Energy Development Corporation, a division of CEF (Pty) Ltd, says that phase one of the project will be up and running by the first quarter of 2009,

fact that the parts are still imported, and the globes only assembled in Maseru.

Plant under construction

The Maseru manufacturing facility is advantageous for a few reasons:

A 22 watt CFL produces the same light output as a 100 watt globe, and this goes a long way to saving energy in homes and offices throughout the world. One CFL will save half a ton of global warming Carbon Dioxide emissions into the atmosphere over its lifespan. The lifespan of CFLs is also about 5 times longer than traditional incandescent globes. At present all compact fluorescent lights in South Africa are imported, mostly from the Far East, however this is about to change. A local manufacturing facility is being set up in Maseru, Lesotho, which is expected to produce up to 30 million of these energy saving globes per year.

in Maseru will produce 30 million units per year

The Maseru plant will be competing with Chinese imports. Initially the manufacturing costs here will be slightly higher than the Chinese import price, due to the

However the arrival of the plant’s burner line at a later date will enable the local manufacture of the fluorescent tubes and thereby reduce the cost of production further to enable competitive prices.

First, the jobs created by this project will add up to around 450, contributing to local socio-economic development. Second, people buying locally manufactured fluorescent lights can be assured that these globes will be in compliance with stringent quality standards not always associated with the Chinese imports.

Energy Journal

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f f o e k a t Billion rand solar project set to One thing South Africa truly has in abundance is sunshine. In fact, people come from all over the world to experience what we take for granted almost every day.

So, in the light of the current intensive quest for green, renewable energy, South Africans certainly stand to benefit from solar technology. Using solar power to heat water for instance is a fairly simple process. All it requires is passing cool water over a heated surface, and there you have it. Turning solar energy into electricity, (a process called solar photovoltaics or solar PV), requires a much more complex technology. Just a few years ago a significant breakthrough was experienced in solar technology, which is fast changing

06 Energy Journal

the way the world sees solar power. This exciting technological advancement came from South Africa. Thin film solar technology was developed over 13 years with funding in millions of Rand from the Innovation Fund, within the Department of Science and Technology. It is the product of a team of scientists from the University of Johannesburg led by professor Vivian Alberts, chief inventor. The new thin film technology is light years ahead of anything on the market, for a number of reasons.

Traditional solar panels are made from silicon quartz, which is a thick, heavy substance. Due to the extensive use of silicon in these panels, the production of the old solar panels is extremely energy-intensive. In fact, it is estimated that producing a silicon quartz panel uses the same amount of energy that one panel generates in two to three years. Thin Film technology, on the other hand, uses a very fine layer of active material, thinner than a human hair, which is applied to a surface. It is therefore much lighter. This increases the potential use on all types of new technologies, for instance hybrid or solar-electric cars.


EIB supports renewable energy market with 40 million Euro loan The European Investment Bank (EIB) is lending EUR 40 million to Thin Film Solar Technologies SA to support the construction Building of the Paarl Thin Film manufacturing plant starts in 2009,

of a production facility for thin-

and it is expected to be operating by 2010.

film photovoltaic (PV) modules in Paarl, Western Cape.

The possibilities are numerous, as thin film PV can easily be applied to a variety of surfaces such as roof tiles, building windows, glass panels and stainless steel. This reduces the need for big, weighty panels. Another plus is that thin film retains generation much better, with power dropping off at a slower rate under low-light conditions, and thus ensuring a better average electricity output than traditional silicon units. The South African thin film technology is able to convert in excess of 16% percent of sunlight absorbed into electricity. This is a major breakthrough, as anything above eight percent is uncommon for other thin film technologies. The manufacturing cost of thin film can be lower than that of other solar panels, therefore providing a clear leading edge regarding cost and efficiency. Energy analysts say that thin film has the potential to be cost-competitive with coal-driven electricity in the future. When the thin film technology was patented in 2006, the German group Johanna Solar Technology obtained a licence to manufacture, and proceeded to build a manufacturing facility outside Berlin in Germany.

project was recently given the go-ahead to commence building, and financing is currently being finalised with an investment of approximately R1 billion.

The new-generation PV modules produced by the facility will be used to generate emission-free electricity.

Construction of the plant is planned to start this year, and it is expected the facility will be operational in 2010.

CEF (Pty) Ltd is one of the key role players in the project.

There are a number of shareholders in the project with CEF (Pty) Ltd being the main South African investor with a 44% shareholding.

The project will contribute to a gradual reduction of the costs of PV-generated electricity by implementing an innovative production process without the use of the expensive raw material silicon.

One condition during licensing was that the intellectual rights would remain in South Africa. The South African operation is also at liberty to target the African continent and the rest of the global market with the product. Of course there are a few other thin film projects but experts maintain that Professor Alberts’ thin film is the “best of the best�. Experts and investors alike are very excited about the significant contribution that thin film solar technology stands to make in helping to ease the South African energy crisis.

Part of the licensing agreement was that a second international licence, as well as an exclusive African licence would be granted.

Homes in rural communities that are unlikely to have access to the electricity grid anytime in the near future, will merely need one of these solar units and a battery storage system, in order to have their basic electricity needs met.

The company, Thin Film Solar Technologies or TFST, immediately began looking into building a manufacturing plant in South Africa, as they hold the African licence.

Aesthetically unpleasing power lines can be kept to a minimum, as well as toxic emissions from coal-driven electricity plants.

With Environmental Impact Assessments complete for the factory site in Paarl in the Western Cape, the

Cost-effective, efficient and clean, Thin Film Solar Technology is considered a win-win situation.

The facility will impact positively on the South African economy by establishing the country as a reference point for this innovative and locally developed technology and contribute to developing the national PV market. The new plant will provide PV systems to schools and clinics in rural communities, where PV is already often more cost-effective than power grid development, as well as micro-sized installations for individual homes, at competitive prices. The thin film CIGSSe (copper, indium, gallium, sulphur, selenium) technology for the new PV module production was developed by a University of Johannesburg research team. Commercialisation of the technology is to proceed by way of a public-private-partnership between CEF (Pty) Ltd, the National Empowerment Fund, Sasol and the University. When fully operational, the plant will have an annual capacity of 30 Megawatt peak. Initially, most of the end product will be exported, however, the share of locally sold modules is expected to increase gradually as the South African PV market develops. The facility will employ up to 150 staff who will receive training and specialist skills development.

Energy Journal

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Turning woodwaste to ENERGY

In the ongoing exploration of ways to generate new energy, CEF (Pty) Ltd is investing in a variety of projects which support the generation of clean sustainable energy that is not harmful to the environment.

One of these initiatives is the R150 million wood waste to energy project currently being developed at George in the Southern Cape by CCE Solutions (Pty) Ltd. CCE Solutions is a joint venture formed by CEF and its business partner, Carbon and Environmental Options (Pty) Ltd. Other stakeholders include the Development Bank of Southern Africa (DBSA) which is providing loan funding, and the Industrial Development Corporation’s (IDC) Wood and Paper Division which is joining as an equity partner. The timber industry in George and the surrounding Eden district has long played an important role in the South African economy.

08 Energy Journal

CCE Solutions are working towards utilising this sector and the Department of Water Affairs and Forestry’s “Working for Water” programme to generate energy from waste biomass.

Working for Water, whereby alien trees that are removed from the area (to reduce water consumption and to assist indigenous species to survive) are to be transported to the new power plant and used as a fuel source.

A plant similar in design to a coal-fuelled power station is to be built in George, where wood waste from the Working for Water programme and the local timber industry will be burned as fuel.

Up until now, alien trees that are chopped down have often simply been left to rot, and some end up clogging dams and rivers in the area or being burned in open fires.

This generates enough heat to create pressurised steam, which in turn drives a turbine. The mechanical energy from the turbine will be converted into electricity in a genset.

CCE Solutions will be paying for the wood waste and the transportation of the wood from forest to factory, so as to obtain a steady supply of wood waste for burning. It is estimated that it will take about 25 years to clear the entire Eden area of all alien species, based on the plant’s wood consumption.

A large source of fuel for the project comes from an agreement CCE Solutions has managed to secure with


An estimated 500 jobs will be created in the Eden area

Along with ridding the forests of high water-consuming alien trees, CCE Solutions’ plan is to begin growing more indigenous, low water-consuming forests to be used as feedstock in future.

Biomass-powered plants are regarded as carbon dioxide neutral and the George plant will earn carbon credits for South Africa. CEF Carbon, a subsidiary of CEF (Pty) Ltd, is managing the carbon revenue process.

The company will also use biomass from the timber and wood industries in the area. Existing timber companies use approximately half of timber that is harvested from forests. The rest is considered waste, which consists of thin branches, off-cuts, scraps and other small pieces of wood.

Of course, the plant will have proper emissions control and combustion systems in place, so as to avoid any negative environmental impact. The technology is wellestablished, utilising a clean combustion system. This complies with international standards and this approach has been demonstrated in countries such as Sweden and Finland.

Similarly, charcoal factories in the area also have excess wood waste, which can be put to good use in the biomass power plant. The burning of wood in a controlled environment results in a far cleaner, renewable energy source, than with typical coal-fired plants. Coal-fired power stations produce harmful emissions such as sulphur gases and mercury. The carbon dioxide emitted by the wood plant is absorbed by the surrounding flora and converted into oxygen.

Along with the positive results that this project is sure to bring to the environment, the socio-economic implications are also positive. An estimated 500 jobs will be created in the Eden area - some 40-odd jobs at the actual biomass power plant, and the rest through the harvest, collection and transportation of the wood waste.

percent of the electricity consumption in George at present. The George municipality supports the uptake of this renewable energy, which is sometimes referred to as “green power�. The electricity generated independently at the plant would also be enough for use in case of general power failures, to ensure the smooth, uninterrupted operation of life-sustaining institutions such as hospitals. The design stage of the project is now complete. The environmental impact assessment is in process. Long lead-time items such as the main power-generating turbo-genset have been ordered, and the team hopes to have these on site by mid-2009, to begin production of clean, sustainable electricity from biomass by the first quarter of 2010.

The projected energy output for the venture is approximately eight megawatts, which is about eight

Energy Journal

09


iGas:

At the helm of making Gas happen in Southern Africa Forming part of the ongoing quest for sustainable energy to meet South Africa’s needs, iGas is a wholly owned subsidiary of CEF (Pty) Ltd. iGas, (the South African Gas Development Company), is mandated by the Government and was set up in 2000, to develop infrastructure for hydrocarbon gases in Southern Africa, as well as to own, invest in and construct hydrocarbon gas transmission pipelines and hydrocarbon gas storage facilities. Mike de Pontes, iGas COO, explains that iGas prefers to create joint ventures, due to the cost and size of the mega projects required to develop gas infrastructure. iGas operates as a virtual company with minimum fulltime staff and relies both on the in-house expertise at CEF, as well as specialist consultants. The relationship with consultants, he says, keeps overheads low, allows for diverse input and often allows for fast turn-around times. One example is iGas’ acquisition of a 25% stake in the successful R6 billion gas pipeline from Mozambique to South Africa.

interior of Mozambique to Secunda. Completed in March 2004, the pipeline now brings a substantial amount of energy from the Mozambican gas fields (Pande and Temane gas fields), into South Africa. The Rompco venture is very successful to date, currently delivering twice the amount of energy coming in from the gas to liquids refinery at Mossel Bay . The gas, which is owned by the Mozambican government, is sold to Sasol Gas, passed through this pipeline and delivered to Secunda and Sasolburg, from where Sasol Gas sells the gas, mostly to industrial consumers. Burning gas directly, especially in industrial applications, is one of the most efficient ways of utilising this type of hydrocarbon energy. Using natural gas in this direct manner is at least 90% efficient.

shareholding.

In an option still to be realised by South Africa, burning natural gas in combined cycle gas turbines, electricity is generated at an efficiency of between 58 and 60%, whereas with conventional coal-driven electricity generation the efficiency is about 34%.

The result of this joint venture between Sasol Gas, iGas and CMG, is the 865 km pipeline, stretching from the

Gas is also more cleaner burning than most carbonbased fuels. The carbon dioxide emissions from gas-

Sasol holds 50% equity in Rompco, (the Republic of Mozambique Pipeline Investment Company), with the Mozambican government company CMG (Compania Mozambicana Gasoduto) owning the remaining 25%

10 Energy Journal

generated electricity are about one half of those from coalgenerated electricity. So for future electricity generation South Africa will benefit environmentally by having a mix of coal and natural gas power generators. Despite natural gas prices being pegged to the USA dollar and to oil prices iGas believes that there is a future niche market for gas use in Southern Africa. Coal, the main energy feedstock in South Africa, provides around 68 to 70% of the primary energy requirement. Liquid fuels such as oil, diesel and gasoline account for about 17 to 19%, with nuclear energy adding about three percent and renewable sources such as wood contributing around five percent of energy. At the moment gas only serves as a feedstock for about three percent of the primary energy, however the market is growing, and iGas together with various joint venture partners is steadily working towards introducing natural gas into the Southern African market as an economically sustainable resource. The potential for gas is huge, especially in Mozambique, which has the right geological signs for oil and gas deposits. The search for these deposits is still very much alive.


“We just haven’t been very lucky,” says de Pontes, but the resources are there. So far, in Mozambique, Sasol have been the most successful explorers in the past few years. On the west coast of Southern Africa there are geologically proven reserves which eventually will lead to natural gas projects being built. At the moment Rompco is building a R1,1 billion compressor station at Komatipoort to increase gas through put in the Mozambique to South Africa pipeline.

extra electricity required during the working day. If all goes well and the plans are found to be economically sound (as the technical designs are complete), the hope is to have a LNG facility feeding a power plant in the Eastern Cape by 2015/2016. Natural gas is a mixture of mostly methane, with some smaller amounts of ethane, propane and butane, and natural gas constitutes between 20 and 24% of the world’s primary energy.

This will allow the gas to flow at a much greater rate, upping the annual influx from approximately 120 million gigajoules per year, to around 147 million gigajoules.

This gas is used internationally to generate electricity, for domestic heating and cooking and also in manufacturing processes. It is also a feedstock in the chemical and fertiliser industries.

A gas to liquids refinery, such as in Mossel Bay, uses about 77 million Giga Joules of natural gas to produce about 30 000 barrels a day of synthetic gasoline and diesel. Alternatively a similar amount of gas (77 million Giga Joules per year) can generate 1600 Mega Watts of base load electricity.

Gas-rich countries, especially those far from the energy markets, frequently export natural gas by cooling the gas, thereby liquefying it, which leads to a 600 times volume decrease. This makes transportation of the gas possible on a large scale. LNG tankers regularly ply the major sea routes of the world.

Another advantage for this natural gas project is that it links South Africa and Mozambique in many ways. There are economic, monetary and technical benefits for both countries, with gas infrastructure and utilisation being developed both here and in Mozambique.

An LNG terminal consisting of a berth with off-loading arms is planned to be built within the Port of Ngqura, with cryogenic pipelines, storage and handling facilities and re-gasification modules and supplying gas as feedstock to a combined cycle gas turbine (CCGT) power generating plant located nearby.

As far as sustainability goes, geological surveys show that at the current extraction rate, the current proven gas deposits will last for about 25 years. There are recent reports of further gas deposits, and time will tell how these are best used. Rompco is currently examining the building of further compressor stations, which will deliver more gas to Mozambique and South Africa. iGas is actively looking at the development of future gas pipelines. The biggest gas fields at the moment, in areas close to South Africa, are in Southern Mozambique, with some smaller fields off the Namibian coast, as well as off the Western Cape coastline. At a cost of three quarters of a billion dollars per pipeline (of the size of the Mozambique to South Africa pipeline), and about five years of focussed Environmental Impact Assessments, engineering design, financial and contractual development and finally construction, iGas certainly has well defined future tasks. Another iGas initiative is the Liquid Natural Gas (LNG) regasification facility at the Port of Ngqura in Port Elizabeth. iGas is actively developing the viability of this form of energy, which is best used in mid-merit power stations, to supply commercial and industrial consumers with the

Dr Mike de Pontes, Chief Operations Officer, iGas

During offloading, the liquefied gas will be transferred through insulated pipes that keep the liquid gas cold, into two storage tanks. Next it is sent to the re-gasification plant, where the liquid is warmed using seawater, turning it back into gas, which is then burned in a gas turbine to generate electricity. The initial plan is that around 1,2 million tons of liquid natural gas is to be shipped into the Port of Ngqura each year, of which about one million tons will be stored and used by the Ngqura power plant, to generate about 2400 megawatts of electricity. The balance of the gas will be available to gas users in the Port and the IDZ, through a gas reticulation network. These plans will essentially create a new energy hub in the Eastern Cape, allowing for a future environmentally clean development from which South Africa is expected to create modern and internationally competitive industries. All these new infrastructure initiatives that are being explored, will need pipelines, storage facilities and Liquid Natural Gas terminals, and so slowly develop a second energy option for the country which will complement the foundation of South Africa’s growth engine - coal. iGas is at the helm of making gas happen.

Energy Journal

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DARLING

Generating electricity from thin air The Darling Wind Farm project in the Western Cape may ring a bell in many people’s consciousness. That is because it has been in the pipeline for more than ten years.

Now after a decade of research, planning and extreme effort, particularly by the project developer Hermann Oelsner, the Darling Wind Farm is finally achieving its objective – that of offering learnings to developers of future wind power ventures.

According to experts, South Africa has an abundance of wind resources within its vast tracks of open land and offshore. In fact, it has the potential to become a “wind powerhouse”.

As a national demonstration project, the Darling Wind Farm has been developed primarily to share lessons learned from the construction and operation of this technology.

Wind power holds many advantages over other energy resources, according to Raoul Goosen, project manager for the Energy Development Corporation, a division of CEF (Pty) Ltd.

CEF (Pty) Ltd and other roleplayers in the project aim to make this information available to potential developers who are interested in the many areas along the West and South coasts of South Africa, where other wind farm developments are under consideration.

The Western Cape’s wind is perfect for generating clean energy, as the prevailing winds blow from two directions and tend to blow during periods of peak electricity consumption.

“Wind turbines mainly involve the capital cost of erection, but then the operating costs are low. Coal power stations start out being lower cost, as regards capital in Rand per megawatt, but the operating costs are higher and depend on coal price movements.” he says. Therefore, the possibility is that wind turbines could end up being more cost effective than coal power plants over their twenty-year life spans. Herman Oelsner, the driving force behind the establishment of the Darling Wind Farm, reckons the future of the project

Despite the potential of our coastal regions and that worldwide wind capacity has grown by 25% per year in recent times, wind power generation is under-utilised in South Africa.

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is not just a mild breeze, as the West Coast alone has the potential to generate 10 000 megawatts of wind power, up to 25% of South Africa’s peak demand.


Key roleplayers behind the Darling Wind Farm project pictured on site at Darling. From left Mr Mputumi Damane, Group CEO of CEF (Pty) Ltd, Ms Buyelwa Sonjica, Minister of Minerals and Energy, Ms Tasneem Essop, former MEC for Environment, Planning and Economic Development in the Western Cape Provincial Government and Mr Dan Frederiksen, Ambassador of Denmark. The Danish Government are major funders of the project.

Another advantage is that wind farms can be built relatively quickly compared to other power plants, taking between one and two years to establish a facility with a 100 megawatt capacity. As part of the City of Cape Town’s Green Power programme, the city has signed a 20-year deal with Darling Wind Power. The agreement forms part of Cape Town’s target of acquiring 10% of its energy requirements from sustainable sources by 2020.

The electricity from the Darling Wind Farm is sold to consumers who willingly participate in the program in order to reduce the harmful effects other forms of generating electricity have on the environment. In turn, they will be issued with Green Electricity certificates, acknowledging their commitment to the environment. CEF will soon be expanding the Darling Wind Farm. The project currently provides in the region of five megawatts peak power from its four turbines. The infrastructure for expansion is already in place for adding six more turbines, which will bring peak power output to 15 megawatts.

The Western Cape government has also set its own ambitious target of 15%, and are banking on wind power to provide a large portion of the total. Government along with CEF are involved in a massive wind energy program, part of which involves mapping areas in South Africa in search of ideal places to erect wind turbines.

Energy Journal

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Kadri Nassiep, CEO, SANERI (Pty) Ltd

SANERI: nurturing the future of energy

SANERI (the South African National Energy Research Institute) was established by Cabinet resolution in 2002, when the country was facing a situation where the Research and Development capacity in South Africa was eroding in existing institutions outside of universities.

This was particularly evident in the case of Eskom and the CSIR, where a number of skills with regard to the country’s energy resources and technology were being lost. The decision was therefore made to set up a new institute to ensure the nurturing of Research and Development skills in engineering and science. The decision was formalised in 2004, when government established SANERI as a subsidiary of CEF (Pty) Ltd. This decision was taken in the light of the CEF Act of 1977 which makes provision for the undertaking of Research and Development (R&D) activities that are in the national interest. Current funding for SANERI comes from the Department of Science and Technology, and is split into two main areas, the first being Human Capital Development, concerning the development particularly of post-graduate students at universities. The second area is Project Development. Meanwhile, in response to the bleeding of skills in institutions dealing with Research and Development, Eskom had undertaken steps to protect their skills capacity, while the CSIR also developed and rebuilt their skills capacity. This meant that SANERI’s protecting and nurturing these skills was no longer necessary.

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Due to these factors it was recently decided that SANERI would refocus its initiatives towards achieving a healthy critical mass of human capital in the energy R&D sector while at the same time accelerating the uptake of “cleaner” energy technologies in SA. SANERI would coordinate research and ensure that activities in particular development areas are conducted. This would be achieved by supporting research both in the private sector, as well as at university level. At present, SANERI is in the process of proposing and establishing new centres for research and development, with the aim of developing new technology and products by means of in-house research. SANERI would administer these centres, on behalf of the Department of Science and Technology. The proposed centres are to be funded by a combination of government, industry and donor funding. So far, post-graduate capacity has been established at universities, with also research Chairs in place at certain universities. Kadri Nassiep, former Department of and Energy chief director, heads up

Minerals SANERI.

He describes the implementation of SANERI’s human capital development vision as based mainly on “Hubs and Spokes”, with a hub being a central university that acts as administrative head to particular projects, and the spokes being other universities contributing to a programme set up by the hub. At present the two hubs are Stellenbosch University which focuses on renewable energy and Pretoria University which is geared toward developing energy efficiency. Looking ahead, SANERI will also propose centres around “green” transportation to accelerate the uptake of cleaner, alternative propulsion systems. Planning for one such centre in Midrand, Gauteng, is already in motion, with Eskom having indicated their willingness to donate electric vehicles to the centre. Another research centre, which is to be distinct from the hubs and will focus entirely on energy efficiency, will also be developed. While the hubs are focusing on human capital, the above mentioned centres will be aimed at product development and education, starting at school level and including undergraduate students and even artisans.


The “hubs” will be supported by these new centres, which will provide an ideal work environment for students once they have completed their studies. Under the new National Energy Act of 2008, SANEDI (the South African National Energy Development Institute) was created, and SANERI is to become a division of the new SANEDI, with the National Energy Efficiency Agency (NEEA), being another division of SANEDI, and later possibly the inclusion of other elements such as financing of renewable energy. SANEDI is designed to either introduce products developed through SANEDI’s research projects into the market, or in the case of NEEA, which focus mainly on commercial technology, to accelerate uptake into these markets. This new institution is to be brought into operation at a time when the President of South Africa decides to formalise SANEDI in the Government Gazette, after which all plans will be set into motion. The target date is April 2010, due to the other major developments currently taking preference with regards to the national budget.

Here is an ideal opportunity, according to Nassiep, for the State to show its commitment to renewable energy and low carbon technology development, to a level that would attract interest and potential investors to this particular market As far as energy research and development goes, SANERI focuses on all types of energy carriers, apart from nuclear power, as the latter is already in place through the work being done by NECSA (the Nuclear Energy Corporation of South Africa) and the PBMR (Pebble Bed Modular Reactor) company. Interesting ventures include clean coal technology development, Second Generation Biofuels, and carbon capture and storage to name but a few. Collaborative partnerships, both international and domestic, are already yielding results regarding, inter alia, a framework for energy efficient, affordable public transport.

SANERI was recently awarded the Southern African secretariat for the Renewable Energy and Energy Efficiency Partnership (REEEP), which brings donors together for support to developing countries. SANERI also manages the participation of South Africa in the International Energy Agency’s Implementing Agreements. Nassiep speaks passionately about SANERI’s many projects, among them silicon beneficiation for photovoltaic panels, integrated low-income housing and sustainable energy supply, green transport, solar traffic lights and other concentrated solar energy technology. “It is still early days”, he says, “but already the pieces are coming together. We look forward to many exciting developments in the next year or so.” With many positive results already seen in the few years since SANERI was established, South Africa’s research and development skills seem to be in good hands.

Energy Journal

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Extending South Africa’s continental shelf Carbon storage atlas for SA in the making As a signatory of the United Nations Convention on the Law of the Sea (UNCLOS), 1982, South Africa has bound itself to the responsible management of its marine territories.

The South African National Energy

Research

Institute

(SANERI), a subsidiary of CEF (Pty) Ltd, is spearheading the development of a South African Carbon Dioxide (CO2) Storage

The areas concerned are described in the Maritime Zones Act, No.15 of 1994 and associated amendments and comprise : - the Territorial Waters - within 12 nautical miles from shore (the coastal low water mark) - the Contiguous Zone - within 24 nautical miles from shore - the Maritime Cultural Zone - within 24 nautical miles from shore - the Exclusive Economic Zone - within 200 nautical miles from shore *I nautical mile = 1.852 kms These zones are applicable to South Africa’s mainland (where Namibia and Mozambique are maritime neighbours) and also to its sub-Antarctic Prince Edward and Marion Islands (collectively called the Prince Edward islands) which lie approximately 2 200 km south-east of Cape Town.

the 2 500 m isobath (water depth line) plus 100 nautical miles (whichever extends furthest), subject to certain rules. In 2003, the Minister of Minerals and Energy directed the Petroleum Agency South Africa, a subsidiary of CEF (Pty) Ltd, to establish and manage a national project (in collaboration with other government entities) to research, compile and submit a maximum claim around the mainland and the sub-Antarctic Prince Edward Islands. In the course of the past six years, the Agency has obtained the bulk of the existing academic marine geophysical survey data to provide a basis for the project. It has been supplemented by six extensive new geophysical surveys conducted by the Agency around the mainland and islands, which were designed to obtain critical data to substantiate potential claim areas.

South Africa’s present marine territory covers an area of 1.54 million km2 – bigger than the 1.22 million km2 representing the mainland. Within these zones, the State has ownership of all natural resources as well a variable degree of control over all maritime and airspace activities.

The area around the South African mainland will be lodged as a partial submission and the area around islands will be submitted as part of a joint claim with France for an area around the Prince Edward and French Crozet islands which lie some 1000 km to the east. The combined area around the mainland and South Africa’s part of the joint claim around the Prince Edward islands is approximately 1.2 million km2.

Article 76 of UNCLOS makes provision states to extend their continental shelves 200 nautical mile Exclusive Economic maximum distance of either 350 nautical

Some 80 nations have potential claims and most, including South Africa are bound to lodge their submissions with the UN Commission on the Limits of the Continental Shelf by May 2009.

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for coastal beyond the Zone to a miles or to

Atlas in partnership with Sasol, Eskom, PetroSA, and Anglo American plc. The atlas is aimed at identifying potential sites for geological storage of CO2 as a mitigation measure for the lowering of greenhouse gas emissions from industrial sources that primarily utilise coal. CO2 would need to be captured from industrial flue gases and then geologically stored by compressing it into liquid form and injecting it into deep geological formations, such as saline reservoirs, coal seams, or depleted oil and gas fields. The Council for Geoscience (CGS) and the Petroleum Agency SA, a CEF subsidiary, will publish the initial assessment of storage potential in a user-friendly atlas by April 2010. The atlas will illustrate the distribution and ranking of potential geological CO2 storage reservoirs in South Africa, including estimated CO2 storage capacities, the main emission sources, location of industrial hubs, transportation pipelines and other factors that may have a bearing on storage feasibility. This information will provide guidance to direct further exploration should carbon capture and storage technologies be pursued in South Africa.


Mr Ndiafhi Tuwani (seated), Deputy Director of South Africa’s Designated National Authority (DNA) helped man the CEF Carbon booth at the World Carbon Expo held in Cologne, Germany, recently.

CEF launches new carbon hub in London In the face of mounting international concerns about climate change and the effect of carbon emissions, CEF Carbon SA (Pty) Ltd, in association with European partners GreenStream Network Plc, has launched a new carbon hub which will offer comprehensive CDM (Clean Development Mechanism) solutions to companies in South Africa and elsewhere on the continent. The joint venture which was launched in London will trade under the name CarbonStream Africa. A South African launch is also planned. Says Board member Arne Jakobsen of GreenStream Network: “Norway and the Nordic countries have for a long time had a close cooperation with South Africa on energy-related issues, and this joint venture is a fruit of that long-term relationship”. Located in South Africa, CarbonStream Africa is strategically positioned with a direct route to the African carbon markets.

The hub is an advisory company delivering comprehensive solutions and services for emission reduction projects, such as the CDM, Joint Implementation (JI) and Voluntary Offsetting. It is dedicated to helping project developers both in Africa and on a global basis to optimize and secure carbon revenue streams from emission reduction projects. It will take projects through the entire process from creation to sale of carbon credits. According to CEO Deven Pillay, the hub is a unique concept in the African CDM market and is committed to contributing towards building CDM expertise in South Africa and the rest of the continent.

“Although lagging behind Asia and Latin America in terms of registered CDM projects, African nations are in a position to benefit from the rapid expansion of the global carbon markets and the increasing demand for Carbon Emission Reductions,” says Pillay. “Our experts will create value for our clients at every stage of the CDM/JI project process. We focus on high quality in the entire project management cycle and our multicultural team of experts ensures excellence in project execution.” The hub brings international and local skills together. Its experts have a substantial track record of PDD development, carbon consultancy and advisory services. Contacts: kristian.gautesen@carbonstreamafrica.com nicole.algio@carbonstreamafrica.com www.carbonstreamafrica.com

Energy Journal

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The National Energy Efficiency Agency:

Less is More!

Established in March 2004 through a directive issued by the Minister of Minerals and Energy, the National Energy Efficiency Agency (NEEA) is located within the Central Energy Fund as a wholly incorporated division. Its prime mandate is to promote the efficient use of energy in South Africa, by whatever means possible. This crosses all sectors, be it electricity, transport, gas, liquid fuels etc, to create an energy efficient society, especially now, given the current energy crisis and environmental impact of our energy usage until now.

Barry Bredenkamp, acting General Operations Manager of the NEEA, explains some of the various ways in which these objectives are currently being pursued: One very important area the NEEA is focused on is public- or customer education, whereby consumers are informed about the many benefits, (mostly financial and environmental), that energy efficient behaviour brings about. Most energy-saving methods (such as solar heating and energy efficient light bulbs) are initially more costly to implement, however savings can be seen in the long run. In South Africa many consumers still tend to

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spend their money on a “first time cost” basis, therefore buying energy products that are immediately cheaper, but more expensive in the long run, as well as being less energy efficient. The NEEA endeavours to turn this trend around, by developing real financial incentives for more energy efficient practices. The NEEA is charged with founding and funding projects that are in need of financial assistance, and without which such necessary projects would not happen. Some of the NEEA’s current projects are very inspiring.

The Public Lighting Project will involve street lighting across all South African municipalities, from Cape Town all the way to Musina. Street lighting is a municipal responsibility that doesn’t generate any revenue. Commercial or residential property owners do not pay for the upkeep and servicing of these lights, thus public lighting in South Africa has deteriorated over time, with no new technology or maintenance having been applied. This has left public lighting across the country, generally inefficient.


The NEEA is currently working on a wall-to-wall public lighting retrofit with the latest, most energy efficient technologies available. A number of international and local donor agencies have been approached to help fund this initiative.

time stuck in traffic. Greenhouse gas emissions will be lowered significantly due to less time spent with engines running in bumper-to-bumper traffic and frustration and road-rage would be eased, adding to the general safety of our roads.

On top of that, the NEEA’s expertise has helped make many government buildings energy efficient, in order to set an example to the public. This includes the CEF’s new “Green Building”, which sets a high efficiency standard to all other institutions.

The nine host cities for the Soccer World Cup will be first to receive the new public lighting. This decision was supported by two reasons, says Bredenkamp. Firstly, the new lights will contribute much to the aesthetics of the host cities, and secondly, it has been proven that improved, adequate public lighting actually reduces crime levels. The energy savings from implementing the new technology will also be a huge benefit for the entire South African economy.

The NEEA is also involved in initiatives at school level, teaching learners how to use energy more efficiently, as well as the sustainable use of all our resources. To

It is also working closely with the Green Transport Programme, which looks at hybrid/electric vehicles as a solution to the high consumption of oil, and the large amount of greenhouse gas emissions that stems from our traditional, oil-driven vehicles. A recent campaign with Peugeot demonstrated fuel efficiency by the driving of a new, energy efficient car from the West Coast of South Africa to the East Coast, on just one tank of petrol. The NEEA will now take this case study and promote better fuel efficiency among others.

Another project high on the list of objectives is the implementation of energy efficient traffic lights. The objective is to install solar powered traffic lights at all major intersections so that, in case of a power failure or blackout, these traffic lights can operate without backup for up to five days. Smaller intersections will be provided with battery backup traffic lights, which can keep operate independently for up to eight hours. Once again, vast amounts of electricity will be saved through this initiative; also the social benefits of reliable traffic lights include a turnaround in the loss of productivity as a whole due to workers losing valuable

date there have been a number of different projects from various sources presented at schools, to the point that information overload has created some confusion with learners as to what to focus on when it comes to environmental awareness. Due to this factor, the NEEA is taking steps to consolidate all this information into one big schools programme throughout South Africa, on environmental sustainability and energy efficiency. The NEEA has already met with all role players such as Eskom, the World Wildlife Fund etc, and all parties seem keen to combine all their resources into one, more focused project, which will provide learners with a very good, straightforward education concerning their environment and how to best look after it. As a society we have become very wasteful when it comes to how we use resources, and it is best to focus on educating the young, as good habits learned early on, usually are carried through life.

Under the new Energy Act, the NEEA will be a subdivision of SANEDI, (South African National Energy Development Institute), and alongside SANERI, (National Energy Research Institute) will be able to gather reliable, independent information, which has been academically proven, with regards to energy efficiency. This ensures that the NEEA will be able to fulfil their mandate of being completely impartial and offer objective solutions for a more energy-conscious way of life for all South Africans. For tips on how you can become more energy efficient, visit www.savingenergy.co.za.

The NEEA also provides an advisory service to industrial and commercial buildings, on how to conserve energy.

Energy Journal

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Producing fuel from crops In recent times biofuels have become increasingly popular, with positive growth seen in bio-fuel industries, particularly focusing on bio-ethanol and biodiesel.

This trend owes its growth to a variety of factors such as high oil prices, the negative effects of fossil fuels on global warming and sustainability issues.

Dr Manny Singh, General Manager, Energy Development Corporation.

Biofuels, as a result, have seen growing investment in South Africa and many countries around the world. As South Africa is a country rich in under-used, high-potential arable land, it has maximum potential for producing fuel from crops.

Sugar beet, says S’bu Ngubane, a project manager at the EDC, is a very exciting crop. It has not been grown in this country on a commercial scale before, except within the boundaries of this particular project, which has included running sugar beet cultivation trials for more than a decade.

In December 2007 the Department of Minerals and Energy announced the proposed Bio-fuels Industrial strategy. The strategy recommends a 2% penetration level of biofuels in our national liquid fuel supply by 2013. This translates to approximately 400-million litres per annum.

Sugar beet is traditionally a crop grown in the Northern hemisphere, as it is more suitable to colder climates. However, a newly-engineered type, referred to as Tropical Sugar Beet, can be grown in warmer, less water-rich areas.

The proposed feedstocks are sugar cane and sugar beet for bio-ethanol, and sunflower, canola and soya beans for biodiesel.

A similar project introducing sugar beet to India in 2007 has already shown enormous socio-economic and environmental benefits.

The Energy Development Corporation (EDC), a division of CEF (Pty) Ltd, plays an important role in biofuels investment in South Africa. The division is involved in five biofuels projects all designed around strategic geographical locations.

Compared to the more traditional sugar cane, the sugar beet certainly holds its own as a feedstock for biofuel.

One very exciting project the EDC are focusing on is the Cradock Sugar Beet Ethanol Project. The location for this venture is Cradock in the Eastern Cape, where the EDC teamed up with other companies, among them Sugar Beet South Africa (SBRSA),

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for the combined research and development of this particular crop.

The sucrose (sugar) content from sugar cane is approximately 13%. This contributes 75 to 80 litres of bio-ethanol per tonne of feedstock. Sugar beet on the other hand, within a similar growing time, yields a sucrose content of 18%, which translates into a hundred-andeight litre bio-ethanol product per tonne of feedstock. The Cradock project may hold many long-term advantages for South Africa in the face of a looming global energy


crisis. The production of biofuels within our own borders is already a plus. It means increased stability for our economy, as fuel companies and consumers alike will be buffered from wild fluctuations in global fuel prices. In the Biofuels Industrial Strategy, the government recommends blending biofuels with fossil fuels, with a maximum of 2% biofuels acceptable ratio. This means that petrol would be blended with 2% ethanol. As a prime example of the successful use of biofuels, the Brazilian government has, over time, encouraged a bio-ethanol blend of up to 25%. With the introduction of flexi cars, which allow a choice of three fuels: petrol, ethanol-petrol blend, or gas, Brazilians are able to switch between fuels as fuel prices fluctuate. As ethanol is usually slightly less costly than the other fuels, this ethanol-fuel blend has gained enormous popularity. An increase in product demand now sees 95% of biofuels produced in Brazil, consumed within its own borders. In South Africa approximately 13 billion litres of petrol are used per annum. Currently 40 to 45% of this fuel requirement is produced within the country’s borders (7 to 10% derived from gas to liquids through PetroSA and 35% percent from coal to liquid), meaning South Africa is approximately 45% self-reliant).

Should South Africa go to the maximum allowable ethanol-petrol ratio of 10%, the country would be in the region of 55% self-reliance in petrol requirement. The economy would benefit greatly, as South Africa would be less at the mercy of high and volatile international fuel prices. The EDC is positive that, as the benefits of ethanolpetrol blends are observed, so the product demand and therefore the biofuels industry will grow from strength to strength. There are many clear advantages to biofuel production and its role in the future of South Africa’s overall well being. •

The country’s reliance on expensive imported fossil fuels will be greatly reduced, which in turn would have a stabilising effect on the economy.

The need for more sugar beet and sugar cane plantations, as well as ethanol production plants, will play a vital socio-economic role, in job creation and the upliftment of rural communities. (The Cradock sugar beet project alone foresees the creation of an estimated 3 000 jobs, and an investment of over R600 million into the Eastern Cape economy)

Biofuels are cleaner and more sustainable than fossil fuels. This will diminish the environmental impact from carbon emissions that contribute to global warming and help ensure more sustainable, affordable fuel sources as fossil fuel supplies invariably dwindle.

The by-products of producing biofuels can often be put to good use and therefore curb wastage. For example bagasse, the energy-rich, fibrous pulp left after the juice has been extracted from sugar cane, is burned as a fuel source and converted into electricity, which powers entire sugar cane processing plants, relieving the need for electricity from an outside source. In a 100 million-litre plant, for example, the conversion of bagasse into electricity can provide around 15 megawatts of electricity.

Also, Vinasse, sometimes called beerwash, is a byproduct of both sugarcane and sugar beet fermentation. It is highly nutritious and can be condensed through evaporation for use in fertilising crops or as a dietary supplement for livestock. The advantage to using sugar beet in ethanol production is that in our water-scarce climate, sugar beet has a high water content, which means that less water needs to be added during the production of ethanol.

Energy Journal

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Torbanite Project to contribute to security of energy supply

Through an initial search for an answer to high pollutant producing fuel, (which contributes significantly to air pollution), CEF (Pty) Ltd has uncovered a potential reserve of excellent grade torbanite, which is a high grade oil shale that can be used to produce high grade transportation fuels. Jabulani Shabalala, Special Projects Manager, EDC

Torbanite is a high-volatile oily coal with a high hydrocarbon content from which petrol and diesel can be extracted.

In 2006 a world-first in mining was achieved when advanced X-ray technology supplied to CEF proved successful in sorting run-of-mine coal and torbanite.

Pyrolysing (subjecting the feedstock to heat in the absence of oxygen) torbanite to release the volatiles or gases, then condensing these gases to liquid form, is how fuel is produced in this case.

With provisional results of a feasibility study at Mintek showing recoveries of up to 98% pure coal, Mikro-Sort Dual X-ray imaging opened up new possibilities for the commercially viable mining` of the high-value coal/torbanite seam near Kinross.

After the oil has been extracted from the torbanite, a low-volatile char remains, which can be used to produce electric power using a Circular Fluidising Bed (CFB) technology. CEF has rights to a large torbanite deposit in the Kinross area (Mpumalanga province) through its 49% interest in Baniettor Mining.

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This was the first time that coal and torbanite had been sorted with any measure of success. The 2,3 m thick seam at Kinross consists of a layer of torbanite sandwiched between two layers of A-grade export quality coal. Due to similarities between the overall rock density and surface properties of coal and torbanite, these layers cannot be sorted using dense media separation or optical sorting, and when contaminated, their value is severely compromised. It would also be uneconomical to mine them using the selective mining technique, according to CEF’s Special Projects Manager Jabulani Shabalala.


TORBANITE Approximately 114 million tons of coal and torbanite are estimated to be in the deposit, with about 60% or 70 million tons being usable material. CEF is currently completing a bankable feasibility study. With the volatility of oil prices throughout the world, torbanite seems to be a valuable resource, however it must obviously be financially viable to mine and beneficiate such a resource. At present the breakeven price of torbanite stands at around US$45 per barrel, thus when oil prices are high, as they have been in recent times, and the demand for oil increases, fuel from torbanite becomes a very attractive option. CEF is currently looking at producing approximately 10 000 barrels of fuel per stream day for the next 20 years.

The high-density diesel obtained from the torbanite is also of a superior quality, and Shabalala explains that it can be blended with other, lower density diesels in order to bring the latter up to standard. The cut composition of final products from torbanite oil would ultimately be approximately 50% diesel, 20% petrol, 10% jet fuel and the balance being heavy fuel oil. CEF is currently in negotiations with a major international oil company, which seems very interested in this fuel stock. Interest has also been expressed by other industry role players in upgrading the raw oil emanating from the retorts and turning it into an excellent feedstock for a refinery with the potential to attract around 1.25 to 1.3 times the current brent price. All in all, South Africa’s torbanite reserve holds a significant revenue potential. On the beneficiation side it will generate approximately 650 MW of electricity using the char by-product as feedstock. This, along with the production of oil and material handling, will create around a thousand jobs. The mining of the resource alone is expected to create about 750 jobs. Other positive spin-offs are the saving on foreign exchange, some measure of independence from foreign oil, training and skills development and revenue from the sales of this excellent high-grade fuel.

The benefit of this resource is that the price of fuel extracted from torbanite would be very stable when compared with regular oil prices.

EEnergy nergy JJournal ournal

23


Oil Pollution Control South LEADING FROM THE Africa are Everyday Heroes

FRONT IN MADIBA BAY

That we are largely an oil-driven society is a fact, and the transportation of oil comes with its own dangers. It is our duty as human beings, to ensure that the impact of our lifestyle on the natural world is minimal. South Africa’s coastline is arguably one of the most beautiful in the world. Should a major oil spill or pollution from an oilrig off the Western coast, or from an oil tanker in Southern African waters, suddenly threaten our seas and the precious life it sustains, Oil Pollution Control South Africa (OPCSA), a subsidiary of CEF, will be there to protect and prevent, minimising pollution effectively. OPCSA is a public entity that was established in 1992 in terms of the National Environmental Management Act. It has long been providing oil pollution prevention and control services along the South African coastline to among others, the oil industry, the Department of Environmental Affairs and Tourism, the National Ports Authority, the South African Maritime Safety Authority and other companies, to preserve our environment. An independent market survey two years ago, verified OPCSA as the best and most efficient oil pollution prevention company in South Africa. Pieter Coetzee, CEO of OPCSA, says this is due to a number of factors. Equipment plays a large role. With its 3 500 metres of rapid deployment, self-inflatable booms that can be set up in minutes to secure an oil spill, and the OPCSA’s highly specialised vessel, The Albatross, which is equipped with purpose-designed brush skimmers that clean up oil from the water’s surface, most spills can be dealt with very efficiently. OPCSA’s equipment is better than that of all other South African oil pollution control companies put together. According to Coetzee, it is always better to clean up the spill before it gets to shore, where the most environmental management occurs. However, should an oil spill reach the beach, causing pollution to the shoreline, OPCSA also has the equipment to clean the shoreline without causing unnecessary damage. All personnel are also trained to handle oiled sea birds, a specialised task in itself. In fact another key to OPCSA’s good reputation is the human factor. Employees are highly skilled, and have vast experience in this type of environmental management. Senior staff members in the field have international training and experience gleaned from many hours of learning from the “best of the best”.

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In recent years OPCSA has done much to unify pollutioncombating capacity along the Southern African coastline. Research commissioned by OPCSA showed that South Africa has a hazardous coastline, but was a long way off from having adequate pollution combating capacity. Oil companies said they could bring in overseas capacity to supplement South African oil-combating capability, but according to Coetzee, 36 hours would simply be too late. There is a National Oil Spill Contingency Plan in place, however due to the fragmented nature of the different laws governing oil pollution prevention and cleanup in South Africa, there used to be much confusion over who was responsible for what. Through OPCSA’s negotiation of a new joint venture with two other stateowned entities, the National Ports Authority and the South African Maritime Safety Authority, a lot of ground has been gained towards the ultimate goal of having an adequate national oil pollution company that is able to react quickly to any pollution threat along South Africa’s coastline. Apart from servicing crude oil carriers or VLCCs discharging or loading cargo, and providing a 24 hour emergency response service, (now also to Saldanha Bay through a deal recently signed), OPCSA also manages environmental liabilities inland, in Ogies in the Mpumalanga province. With crude oil having been stored in old mines in the area, although the mines have now been emptied, there is a possibility of the oil residue in these old storage facilities polluting aquifers if not managed properly, and therefore OPCSA is keeping a close watch and implementing preventative measures. With the OPCSA vision to be a leader and a partner of choice in the provision of oil pollution prevention and control services in South Africa, Africa and the Middle East, they are currently in negotiations for a joint venture with a Middle Eastern company, Lamor-Swire, which will hopefully result in a pollution prevention operation extending much further up the Southern African coastline. OPCSA is striving for continual growth in its operations, in order to shrink the impact of oil pollution on our precious environment.

CEF Group CEO Mputumi Damane (seated) with from left Prof Ernest van Dyk, Dr Chris Cooper and Prof Andrew Leitch.

CEF is studying the alternative energy capabilities of the Nelson Mandela Metropolitan University in Port Elizabeth with a view towards a possible partnership with the institution. Group CEO Mputumi Damane and CEF Corporate Planner Chris Cooper recently visited the university’s Centre for Energy Research to discuss their energy programmes, and to find out more about the research they are doing into solar PV and silicon purification. The University is one of the key role players in the country in the energy space, undertaking research into a number of renewable energy technologies. CEF has also signed a Memorandum of Understanding with the Nelson Mandela Bay Metropolitan Municipality to conduct a carbon footprint assessment. This is to identify carbon emission reduction projects that could be implemented throughout the Bay area. “The Metro Council and Executives understand the importance of growing the market for renewable energy technologies, and that this will be important given the challenges of climate change, as well as energy security. They have committed to reducing their Carbon footprint. This vision towards sustainable development will make the region a preferred place to settle in and visit, boost tourism, trade and social upliftment,” says Mr Damane.


SASDA: creating new Y opportunity In 1998 the Department of Minerals and Energy (DME) developed and published the Energy White Paper, which laid out the basis for broad-based economic empowerment and transformation in the Energy sector. In 2003 the DME instructed PetroSA as South Africa’s National Oil Company, to establish a supplier development pilot project. The results of the project were satisfactory, resulting in the broadening of the programme nationally.

oil companies - BP, Caltex, Engen, PetroSA, Sasol, Shell and Total SA.

It is against a background of seeking to establish more black-owned enterprises in the energy sector in order to grow the economy, that the South African Supplier Development Agency (SASDA) was established in March 2005, the key stakeholders being the South African Government represented by the Department of Minerals and Energy, and the South African Petroleum Industry Association (SAPIA), representing seven major

Its original focus was procurement opportunities in the oil industry. However when SASDA was incorporated into the CEF Group of Companies, the Minister of Minerals and Energy announced an expanded role for the organisation, which now includes state-owned enterprises and a particular focus on the development of rural communities, people with disabilities, women and the youth.

SASDA is a subsidiary of CEF (Pty) Ltd.

SASDA pursues its primary mission of developing black suppliers in the energy sector by assisting suppliers to the industry to be BEE compliant, developing black supplier skills to meet industry required standards, and capacity building through direct support and partnership with other developmental agencies. The Agency provides a number of diverse services to different companies, from financial support to management, providing guidance to skills development. One of its primary functions is to consolidate and manage the oil companies’ supplier database, as the need for one consolidated industry supplier database was identified as a key platform. The database is now functional and suppliers continue to register. The Minister of Minerals and Energy expects SASDA to be the leading development agency in the country and to extend its services to other sectors of the economy.

CEF LAUNCHES COMPUTER LITERACY PROJECT The project is run in conjunction with the Walter Sisulu University (WSU) and benefits thousands of disadvantaged learners from rural areas who otherwise would not have had access to computers. CEF has donated computer laboratories to a cluster of schools in the area, which is often referred to as one of the most impoverished regions in the country.

Learners at the Hitekani Primary School in Soweto, Johannesburg, make full use of their computer laboratory which was sponsored by CEF (Pty) Ltd.

As part of the company’s social responsibility initiatives, CEF has launched a major computer literacy project in the Greater Kei area.

CEF has also sponsored schools in Soweto and the Limpopo province with fully-equipped computer laboratories. A need was identified to train the teachers in basic computer literacy so that learners can derive maximum benefit from the computers. The training is conducted by the WSU which has a number of campuses in the area. The pilot project is probably the first in the country with the way it is structured. It departs from the norm in that its three-pronged approach ensures benefits accrue to tens of thousands of beneficiaries.

“At the first level we worked with the University to structure a special program for the teachers. It was a new experience for them to depart from their normal tuition to devise special modules for this specific intervention. They are already saying they will apply these learnings in other areas,” explains CEF spokesman Mandla Tyala. At the second level, the training of the teachers is invaluable in that it is not only professional selfdevelopment for them, but they can now go back to their schools and share the knowledge with their colleagues and members of the greater community. It’s a tremendous multiplier effect. Ultimately, the key beneficiaries are the pupils, who will not only receive effective computer training from the newly-qualified teachers, but will now also be able to share this knowledge with their peers in other schools and relatives at home.

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CEF building a model of energy efficiency

The new CEF building in Sandton, Johannesburg, has been modified to

include

efficiency will

significant

energy

interventions.

These

ensure

that

the

energy

consumption is below the average for similar office buildings.

The two most visible interventions will be the efficient lighting systems and the double glazing. The lighting system has three characteristics that ensure efficiency. The lights themselves are designed to reflect as much light into the room and use highly efficient tubes. Further there are both occupancy and ambient light level sensors to provide efficient light levels at all times. Double glazing reduces heat uptake through solar thermal insulation when it is hot outside and through radioactive heat losses when the outdoor temperatures are low. Further, a highly efficient air conditioning system was selected. Both lights and air conditioning will be strictly controlled to eliminate unnecessary energy consumption.

26 Energy Journal

The building has insulation under the ground floor, in cavity walls and under the roof to ensure that the building envelope is as thermally efficient as possible. The roof has been specially designed to accommodate solar PV panels. A highly energy efficient elevator has been installed, but staff and visitors are encouraged to use the stairs most of the time. All of the offices have glass panels to allow as much natural light to penetrate into the building. Plumbing fittings are all water efficient thus contributing to a more environmentally friendly new home for the CEF Group.

The new CEF building is located at 152 Ann Crescent, Strathavon, Sandton, Johannesburg.


Generating sustainable energy from landfill gas Where there is major human activity we can be sure of two things: there is a need for sustainable energy, and there is waste. In recent years two major global challenges have become apparent: first, that our world cannot take too much more of our mindless pollution, and second, that the energy resources we have taken for granted for so long, will run out. Fortunately for us there are many possible solutions to the imminent global energy and climate change crises. Putting our waste to good use in providing sustainable energy is one solution that brings good tidings all round. Dumping our waste in landfills is an age-old method of waste disposal still used in many parts of the world today, including many municipalities in South Africa.

Adding to safety are the stringent Environmental Impact Assessment surveys, which ensure minimal environmental impact and maximum safety. The benefits to the environment play an important part in the viability of these projects, as methane gas is burned out before it can contribute to negative climate change. Also, once the life cycle of the gas plant is complete, (approximately 15 years in larger plants), the land is rehabilitated and can be put to use in other ways. The Energy Development Corporation (EDC), a division of CEF (Pty) Ltd, is in the process of transforming a number of landfill sites across the country into energy production sites.

Waste in landfills is covered by a layer of earth and left to rot. This process is then repeated as waste decomposes and sinks. Simple and efficient.

Revenue is also to be obtained from selling the power generated from the productive use of methane gas. Before Carbon Financing, projects such as these would make little economic sense. Energy from landfills is more expensive than energy obtained from burning coal, however many landfill site projects will have to be developed and implemented in order to replace or support the more “traditional” methods such as coal. This new infrastructure would of course require extra revenue. Carbon financing helps make these ventures possible, as approximately 45% of revenue will stem from the sale of electricity from landfill sites and the rest will come from the sale of carbon credits due to the positive environmental impact.

However, a major by-product of these landfills are pockets of methane gas which form under the surface due to the decomposition of organic waste in the absence of oxygen (anaerobic degradation). Methane gas is one of the top 6 contributors to global climate change and 21 times more destructive than Carbon Dioxide. It is also a pollutant that can affect the health of people and animals in prolonged contact with it, as well as the fact that this gas can be highly explosive. The good news is that methane gas can be used very effectively as a source of renewable energy. Essentially, two to three gas wells per hectare are sunk into a landfill to a depth of approximately 20 m – much like drilling for oil – and gas is then extracted and collected in a common gas header. Next, the methane is purified and dried, then treated to obtain the right pressurisation, after which it is ready to either undergo a process called “flaring” (burning off), or it can be mixed with air and used to power a big reciprocating spark gas engine, much the same as a diesel engine, which in turn generates electricity. Flaring then safely burns off any excessive methane gas. Proven technology, currently used in more than 2 000 applications internationally, makes this process very safe and efficient.

The landfill projects that CEF is currently involved in, include a portfolio of projects that are being developed in conjunction with different municipalities and some of the large metropolitan councils. There are two strategies at work here. First, CEF develops and owns some projects entirely and independently, and secondly the company is involved in consortium deals with BEE partners and the various municipalities. There are two very good reasons for the sense of urgency to convert landfill gas into a viable energy source: to start reducing the damaging leakage of methane gas into the atmosphere; as well as to optimise the significant revenue streams. Due to carbon financing, in line with the Kyoto Protocol, South Africa is able to sell carbon credits to other countries.

As for the amount of energy produced, from larger Metro sites such as Cape Town and Tshwane, 2 to 3 megawatts per site can be expected. This figure at first will not make much of an impact on power supply in large cities, but aggregating and running a number of smaller sites, would increase the power generated to a more significant level. So, all things considered, the future looks brighter and cleaner due to these environmentally and economically sound methods of providing renewable energy. CEF recognises that these initiatives may be at an early stage, cumulative effect of these and similar projects which are gathering place will soon make a positive impact on our country’s needs.

Energy Journal

27


Putting “white elephant” of the past to good use.

With so many new developments in the Energy sector, the Strategic Fuel Fund (SFF), a section 21 company and subsidiary of CEF (Pty) Ltd, plays an ever-developing role in the South African energy industry. SFF is responsible for managing crude oil stocks on behalf of the South African government. It generates its income from the rental of storage facilities and the sale of storage options to private companies at home and abroad.

Tank farms around Cape Town also fell into disuse. The twenty tanks at Killarney, holding four million barrels, were sold to Caltex, and increasingly domestic and international clients are showing interest in the 39 tanks located at Milnerton.

It holds strategic stocks of about 10,5 million barrels of crude oil.

The six concrete tanks, built nearly three decades ago at a cost of R108 million, are still in perfect condition. The tank farm, which used to be one of the most secret installations in the country, has now become a significant foreign exchange earner for South Africa. For the first time in 15 years the installation is being used to its full capacity. International oil traders are now paying big money in order to use the Saldanha Bay facility to store their oil supplies.

Thanks to SFF the massive tank farm on the shores of Saldanha Bay in the Western Cape, which had threatened to become a “white elephant” of the apartheid era, has been turned around to become highly profitable.

International contractors use about 35 million barrels of storage capacity in the facility, while South Africa uses the remainder.

In the early nineties South Africa drastically reduced its approximately 170 million barrels of strategic fuel stocks by selling off supplies. The original stock was a buffer against the threat of an oil embargo, but with the demise of apartheid that threat no longer existed.

In 1995, when the Saldanha facility was first revealed as a potential storage facility for international oil storage, a few challenges pertaining to environmental impact had yet to be overcome.

After reducing the original fuel stock, the remaining 10,5 million barrels was held in case of any supply interruptions from major oil producers.

After many years of hard work by SFF, the international oil dealers are now operating at Saldanha in significant numbers, trading on the outlook of a much higher oil

With the change in the political climate South Africa also sold off and closed down oil storage facilities in Ogies in Gauteng, where strategic oil had been stored in the disused mine shafts at a depth of about 60 metres below ground.

28 Energy Journal

price. The tank farm at Saldanha has six huge concrete containers holding up to 7,5 million barrels of oil each. Its total capacity of 45 million barrels makes it by far the largest installation of its kind in Africa, and one of the biggest in the world.

South Africa is reaping benefits in the form of good foreign exchange and the Saldanha Bay community and economy are also positively influenced.


Hydro Power Options under Consideration South Africa is a country that has limited water supply when compared to the rest of the world. Consequently it has limited-to-moderate hydro-electric potential.

The largest hydro-electric plant in South Africa is the 1000 mega watt Drakensberg Pumped Storage Facility. This forms part of a larger scheme of water management that brings water from the Tugela River into the Vaal Watershed. In a pumped water storage scheme, water is pumped up to a dam. This uses some electricity, however it is only done during off-peak times, when extra electricity is not needed elsewhere. Then, during peak hours, water is released again from the dam through a turbine, which drives an electricity generator. In South Africa there are a number of government-owned dams, which if assigned to companies for development of hydro-electric projects, will ensure a much quicker uptake of hydro schemes.

CEF is in collaboration with the Norwegian government’s Department of Water Resources and Energy (NBE), as well as the South African Departments of Water Affairs, Minerals and Energy, and Environment and Tourism.

Despite the water challenges faced in this country, experts say that the establishment of small hydro-electric plants around South Africa could certainly help provide a sustainable future electricity supply.

The EDC is also negotiating with Eskom with a view to establishing collaboration on pilot areas. The shortterm aim is to have at least three hydro pilot areas demonstrating hydro-electricity.

In fact, the United States Department of Energy once estimated between 6 000 and 8 000 potential sites in South Africa, which are suitable for small hydro utilisation projects, with Kwa-Zulu Natal and the Eastern Cape regions offering the best prospects.

The EDC hopes to set a trend with independent power producer driven schemes, and encouraging the maximum utilisation of hydro-electric potential in South Africa The advantage of hydro-electric schemes is that they are driven by proven technology, therefore no re-invention of the wheel is necessary.

Large hydro-electric schemes are expensive and require the construction of large dams, which certainly have environmental impact. This makes smaller or minihydro projects so much more appealing. Mini hydroelectric plants are classified as delivering anything under

Energy from hydros is “green” and especially smaller hydros, if planned and applied properly, have minimal environmental impact.

20 megawatts of electricity.

there is limited electricity, a smaller hydro-electric

In 2004, then-Minerals and Energy Minister Phumzile Mlambo-Ngcuka in her report to parliament said: “The view from Africa is that if Africa is going to have security and access to energy, we cannot alienate any source of energy…”

In rural areas such as Northern Kwa-Zulu Natal, where plant that delivers, hypothetically, three megawatts of

The Energy Development Corporation, a division of CEF (Pty) Ltd, is currently looking into the development of the entire range of possible hydro-electric schemes, and focusing especially on the mini-hydro schemes.

The impact that mini hydro-electric plants in themselves might have in terms of the collective energy supply in South Africa may seem small and some have said insignificant, however CEF are of the opinion that every little bit helps.

power, can potentially make a big difference to local communities.

Therefore, hydro-electricity in South Africa, although often underestimated and sometimes even criticised, is now proving to be a promising addition to our future power supply.

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CEF (Pty) Ltd is involved in the search for appropriate energy solutions to meet the future needs of South Africa, the Southern African Development Community and the sub-Saharan African region. The Group manages specific energy interests for the Government and primarily acts as a catalyst for the development of new energy entities. Its mandate is to pursue commercially viable opportunities in oil, gas, coal, sustainable and renewable energy. CEF targets market sectors where there is insufficient private sector activity as well as areas where the Government, for strategic reasons, believes that State investment and development projects are required. For more information visit w w w. c e f g r o u p . c o . z a

PO Box 786141 Sandton 2146 152 Ann Crescent, Strathavon, Sandton, Johannesburg

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