Parliamentary Q&A on energy procurement, offshore gas, finalising of Petroleum Bill, blasting in the Highveld etc.

 

You may have seen this already, but attached are some interesting Parliamentary Q&A on issues surrounding energy procurement, offshore gas, finalising of the Petroleum Bill, blasting in the Highveld, usage of hydrogen fuel technology currently being deployed, explosion at Engen refinery in Durban and others, for your interest.

 

Also interesting position on the IRP in relation to the nuclear build – saying that IRP is just a least cost planning (with adjustment), that it doesn’t pronounce on procurement, and how Nuclear build fits into all of this.

 

234. Mr M N Nxumalo (IFP) to ask the Minister of Mineral Resources and Energy:

 

Whether, with reference to the recent research by energy experts which found that there is currently 5000 MW that can be added to the grid and which can go a long way to stave off loadshedding, his department has plans to procure new capacity; if not, why not; if so, what are the further relevant details? NW237E

 

Reply:

The 5000 MW referred to in the question is in relation to potential from users generating their own power and not power available to be procured by the State.

With regard of procurement of additional power by the State, the Department is currently finalising the evaluation and appointment of preferred bidders for 2000 MW of power under the Risk Mitigation Independent Power Producer Programme.

The Department also plan to procure additional power in line with the already gazetted Section 34 Determination as follows:

 

427. Mr M N Paulsen (EFF) to ask the Minister of Mineral Resources and Energy:

What action has he taken to discourage seabed mining, as bulk sediment mining of the deep seafloor is likely to have a severe and negative impact on sensitive seabed habitats and the ecosystem services that they provide, and given that the competency to consider and approve mining licences lies with his department? NW482E

 

Reply

Although the primary aim lies along advancing development premised on the principles of sustainable development, where any proposed mining along and within seabed could potentially pose severe and/or irreversible damage to ecosystem in question even with mitigation measures in place such application cannot be granted or approved.

The provisions of section 48 of the MPDRA which list out area over which prospecting or mining is prohibited. If the area constitutes such an area as per the assessment made, the Minister can invoke the provisions of section 49 of the MPRDA and restrict or prohibit mining over such relevant seabed.

 

 

 

709. Mr K J Mileham (DA) to ask the Minister of Mineral Resources and Energy:

 

1)     Whether, with reference to the proposed new nuclear build, his department conducted any (a) feasibility studies and/or (b) business or financial case studies for new nuclear generation in the past two years; if not, why not; if so, in each case, what are the relevant details;

2)     In view of the fact that the Integrated Resource Plan 2019 (IRP 2019) makes no provision for the procurement of new nuclear generation as indicated on table 5 on page 42 of the gazetted IRP, on what basis has he committed to procure 2500MW of new nuclear generation by 2024 in his Ministerial Performance Agreement;

3)     Why is he prioritising nuclear power generation ahead of other generation solutions despite ESKOM’s admission that nuclear energy is neither a least-cost, nor a short-term solution to the electricity crisis in the Republic? NW828E

 

Reply

1)     Whether, with reference to the proposed new nuclear build, his department conducted any (a) feasibility studies and/or

The Department has in the past, conducted at least 13 feasibility studies towards a framework for the realisation of the Nuclear New Build Programme. These include amongst others the International Atomic Energy Agency’s peer review expert mission on Integrated Nuclear Infrastructure Review. As result of this, a number of studies and strategies were developed to address identified issues raised for preparation toward procurement of the 9600MW nuclear programme previously. These feasibility studies provided the necessary foundation from which to prepare for the procurement of the 2500MW nuclear new build programme. Some of the relevant feasibility Studies included:

1.      Study on comparative analysis of Shale Gas to power versus Nuclear Power in SA

2.      Benchmark of Procurement Framework

3.      Cost of Nuclear Power

4.      Owner-Operator and Financing Structures

5.      Finance Options Models Solutions

6.      Economic Impact of Localisation of Nuclear New Build Programme

(b) business or financial case studies for new nuclear generation in the past two years; if not, why not; if so, in each case, what are the relevant details;

Having those relevant studies as a basis, following the IRP2019 call for the smaller capacity of 2500MW the Department sought to update its information with the latest developments in the nuclear industry by testing the market appetite for the deployment of the Nuclear New Build Programme in South Africa. In June 2020, Department went out to test the market by issuing a non-binding Request for Information (RFI) for the 2500 MW of nuclear capacity. The process of finalising the RFI assessment is underway and this will culminate to into the implementation strategy, roadmap and procurement framework.

2)     In view of the fact that the Integrated Resource Plan 2019 (IRP 2019) makes no provision for the procurement of new nuclear generation as indicated on table 5 on page 42 of the gazetted IRP, on what basis has he committed to procure 2500MW of new nuclear generation by 2024 in his Ministerial Performance Agreement;

 

The Department has been implementing the IRP2019 since it was promulgated in 2019 to provide sustainable energy mix to address the country energy needs with various energy technologies that are being rolled out. The IRP does not pronounce on procurement. It is a plan for electricity that is based on least cost calculations and policy adjustments. There are a number of steps in the IRP development process, one of the final steps is policy adjustment. The policy adjusted decision of an approved Integrated Resource Plan of 2019, Decision 8 states: “Commence preparations for a nuclear build programme to the extent of 2500 MW at a pace and scale that the country can afford because it is a no-regret option in the long term”.  The Minister’s Section 34 Determination in terms of the Electricity Regulations Act No. 4 of 2006, as amended, is where provision for procurement of electricity generation is made.  The policy Decision 8 of the IRP2019 provides the basis upon which the Minister has   committed to procure 2500MW of new nuclear generation by 2024 in his Ministerial Performance Agreement;

 

The preparations leading to the procurement in 2024 have already started taking into account:

 

(i)     That the 2500 MW Nuclear Build Programme is contained in the DMRE 2020-2025 Strategic Plan and the Annual Performance Plan

(ii)    That the 2500 MW Nuclear Build Programme is contained in Policy Position 8 of the IRP 2019

(iii)   That the 2500 MW Nuclear Build Programme is contained in the Performance Agreement of the Minister.

(iv)   That the 2500 MW Nuclear Build Programme is contained in the 2019-2024 MTSF Priorities.

 

The preparation for nuclear power plant is long lead-time infrastructure project and takes up to about 12 years from the planning until the commission power plant to the grid to generate electricity.  These preparatory activities include but are not limited to design, siting, procurement, construction and commissioning of the nuclear power station beyond 2030. Most of the baseload coal fired power plants will be decommissioned beyond 2030 and based on the long lead times for a nuclear programme, starting the process early will yield a no regret option taking into account that nuclear is a clean baseload source of power.

 

3)     Why is he prioritising nuclear power generation ahead of other generation solutions despite ESKOM’s admission that nuclear energy is neither a least-cost, nor a short-term solution to the electricity crisis in the Republic? NW828E

 

The Department has a responsibility to implement the approved IRP in totality to ensure security of energy supply for the country. It is not true that nuclear is being prioritised. Since the promulgation of the initial IRP 2010-30 and the subsequent revised IRP 2019, the only other technologies to be commissioned in line with these plans have not included nuclear. We have procured more renewable energy technologies and we continue to do so and nuclear has not been one of those. Even with the section 34 determinations following the IRP 2019, Nuclear energy is being subjected to a robust public participation process prior to NERSA’s concurrence. It is therefore not true to imply that nuclear is brought in as short-term solution despite it having policy adjusted into the IRP post the modelling process. It must be noted that the IRP does not factor in a number of issues such as hidden costs including the grid costs, balancing costs, systems costs, job creation, local industry development, geopolitics, labour movement dynamics and other related aspects.  In addition, the IRP modelling process used the average capital cost of nuclear projects as US$5000/kWe whilst unlike other energy sources, nuclear projects have shown to have a wide range from as low as US$2000. After testing the market, we may arrive at a cost far lower than any other energy source possible, and this is the reason why it will be prudent to move forward with procurement of nuclear power. In addition, unlike most other energy sources which have lifetimes and loans suit limited private investor positions of short-term returns, nuclear power plants have lifetimes exceeding 60 years. Koeberg is a prime example of this and has shown to be the cheapest of all energy sources currently on the grid. Even after 20 years when a nuclear plant has been paid off (due to market limitations on loan durations), the plants will continue to generate electricity at the lowest operational cost. Each energy source must be looked at for its merits, and hence a balanced energy mix of all sources is good for South Africa. 

 

 

 

32. Mr K Ceza (EFF) to ask the Minister of Mineral Resources and Energy:

 

What steps has his department taken to address the complaints of the Clewer Community in the eMalahleni Local Municipality, Mpumalanga, as submitted to his department on 1 August 2020, with regard to the blasting operations and dust at the Anglo American Khwezela Colliery which causes cracks in houses in Clewer? NW34E

 

Response

The Department investigated the complaints. The outcomes of the investigation were that Khwezela Colliery air blast and ground vibration exceeded the limits of 125dB and 5mm per second, respectively. 

The Department issued Khwezela colliery with instruction to comply with the air blast limit of 115 dB and ground vibration limit 5 mm per second. Secondly, colliery was instructed to conduct a follow up structural survey on all the affected houses in proximity of the mine, determine if the damages to the houses were caused by blasting from the mine and fix all the houses that were damaged due to mine blasts. The mine must also review their blast design to ensure that they are able to comply with the air blast and ground vibration limits. The mine was also issued with an instruction to reduce the dust levels that were emanating from the dragline.

 

73.  Mr M N Nxumalo (IFP) to ask the Minister of Mineral Resources and Energy:

In light of the discovery of a second major gas find off the coast of South Africa that has put the Republic on the global energy map with even more discoveries expected in the future, how does his department intend to ensure that (a) it takes full advantage of the discovery and (b) the gas finds will be a significant boost for energy production in the Republic?                                 NW76E                                                             

 

Reply:

 

(a)    The department is finalising the Upstream Petroleum Bill to further augment the regulations governing the oil and gas sector.

(b)   As per the Integrated Resource Plan (IRP 2019), South Africa continues to pursue a diversified energy mix that reduces reliance on a single or a few primary energy sources. Natural Gas forms part of the country’s energy mix.

(c)    427. Mr M N Paulsen (EFF) to ask the Minister of Mineral Resources and Energy:

(d)    What action has he taken to discourage seabed mining, as bulk sediment mining of the deep seafloor is likely to have a severe and negative impact on sensitive seabed habitats and the ecosystem services that they provide, and given that the competency to consider and approve mining licences lies with his department? NW482E

(e)     

(f)     Reply

(g)    Although the primary aim lies along advancing development premised on the principles of sustainable development, where any proposed mining along and within seabed could potentially pose severe and/or irreversible damage to ecosystem in question even with mitigation measures in place such application cannot be granted or approved.

(h)    The provisions of section 48 of the MPDRA which list out area over which prospecting or mining is prohibited. If the area constitutes such an area as per the assessment made, the Minister can invoke the provisions of section 49 of the MPRDA and restrict or prohibit mining over such relevant seabed.

583. Mr J R B Lorimer (DA) to ask the Minister of Mineral Resources and Energy:

Whether the general public is able to view the locality of applications, rights and permits made and/or held in terms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002, via his department’s South African Mineral Resources Administration System; if not, (a) why not and (b) for how long has the View South Africa Geographic Information System facility not been available; if so, what are the relevant details? NW639E

 

Reply

(a)    The general public can view the locality of applications.  Members of the public will need to register as a user of the system, select relevant province and commodity/ies to able to view. 

(b)    The South Africa Geographic Information System facility has always been available.

586. Mr K J Mileham (DA) to ask the Minister of Mineral Resources and Energy:

With reference to the statements by the President of the Republic, Mr M C Ramaphosa, regarding hydrogen fuel cell technology and deployment in line with the Hydrogen South Africa Strategy, (a) which schools and hospitals are currently using hydrogen fuel cell technology to provide electricity, (b) what amount of electricity is generated in each case and (c) what are the future plans and timelines for implementation of hydrogen fuel cells at other government facilities? NW642E

 

Reply

(a)    As part of government’s response to combating the COVID-19 pandemic, a temporary fuel cell system was deployed at 1 Military Hospital in Gauteng, which is utilised to support the Department of Defence. There is also one installed at the Science Center in Comimvaba (Eastern Cape).

(b)    The Seven Hydrogen Fuel Cells temporarily deployed at 1 Military Hospital has a total installed capacity of 35kW. The fuel cells deployed at a Science Centre in the Eastern Cape has a capacity of 5kW.

(c)    Post  July 2021, the fuel systems currently at 1 Military Hospital will be redeployed as follows:

i)     One fuel cell system will remain at 1 Military Hospital for use by the Department of Defence (DOD) for training purposes;

ii)    One fuel cell system at Mandeni Local Municipality, ILembe District in KZN, with a connection to the Youth Centre and Small, Medium and Micro Enterprises (SMMEs) Stalls;

iii)  One fuel cell system at MINTEK with a connection to the Home Affairs offices in Randburg;

iv)  One fuel cell system at Masia Village in Limpopo;

v)   One fuel cell system at the Department of Science and Innovation;

vi)  One fuel cell system at the Trevenna Building, Department of Mineral Resources and Energy.

There is also ongoing work to incorporate the deployment of fuel cells in public buildings through the existing policy instruments, which include Energy Efficiency and Demand Side Management (EEDSM) grant programme and the Public Works and Infrastructure Green Building Policy.

614. Mr M N Paulsen (EFF) to ask the Minister of Mineral Resources and Energy:

 

What steps has his department taken to ensure that Engen is held liable for the damage caused to homes and loss of property in Wentworth after the explosion at its oil refinery in Durban South in December 2020? NW730E

 

Reply

The matter referred to in the question should be addressed to the Department of Environmental Affairs, Forestry and Fisheries who handle Environmental impact issues, as well as the Department of Employment and Labour as the responsible Department for the investigation of industrial accidents.

 

726. Mr J R B Lorimer (DA) to ask the Minister of Mineral Resources and Energy:

 

Whether, as part of the mechanisms to combat corruption and state capture and thereby increasing the attractiveness of the mining industry of the Republic to investors, he intends to apply for the Republic to be an implementing country of the Extractive Industries Transparency Initiative; if not, why not; if so, what are the relevant details? NW847E

 

Reply

 

No.

South Africa has not taken a decision to be part of the Extractive Industries Transparency Initiative.

 

 

 

 

 

Dear Colleagues

 

Attached please find abovementioned replies.

 

Dept of Mineral Resources and Energy:

 

	19 MARCH 2021
	32	NW34E	Mr K Ceza	EFF
	73	NW76E	Mr M N Nxumalo	IFP
	182	NW185E	Mr A N Sarupen	DA
	234	NW237E	Mr M N Nxumalo	IFP
	427	NW482E	Mr M N Paulsen	EFF
	583	NW639E	Mr J R B Lorimer	DA
	586	NW642E	Mr K J Mileham	DA
	589	NW645-E	Prof C T Msimang	IFP
	614	NW730E	Mr M N Paulsen	EFF
	622	NW738E	Ms P Madokwe	EFF
	677	NW795E	Mr L J Basson	DA
	709	NW828E	Mr K J Mileham	DA
	726	NW847E	Mr J R B Lorimer	DA
	801	NW958E	Mr N Singh	IFP

 

Dept of Trade, Industry and Competition:

 

	19 MARCH 2021
	466	NW522E	Mr M J Cuthbert	DA
	524	NW580E	Mrs N I Tarabella Marchesi	DA
	595	NW65E	Inkosi R N Cebekhulu	IFP
	598	NW654E	Inkosi R N Cebekhulu	IFP
	689	NW807E	Mr S Ngcobo	DA

 

 

 

Regards

 

 

Philby L Petersen Procedural Assistant: NA Table
Tel: 27 (21) 403 2329 Fax: 27 (21) 403 3638 Cell: www.parliament.gov.za