Energy sector

An Expert's View about Energy in South Africa

Posted on: 28 Sep 2012

The South African energy sector is the largest in Africa, with the power sector constituting 40% of the continent’s power generation capacity.

Energy sector in South Africa The South African energy sector is the largest in Africa, with the power sector constituting 40% of the continent’s power generation capacity. South Africa’s power generation is heavily reliant upon coal, which makes up close to 90% of the energy mix. Market overview After years of underinvestment, South Africa’s electricity generation environment has an extremely tight supply-demand balance. The country’s power generating capacity can no longer meet demand and plans are in place to boost South Africa’s power capacity. South Africa’s power utility company, Eskom, is undertaking a £36 billion capital expenditure programme aimed at bringing an additional 17,000MW of power on stream by 2018 in order to alleviate the electricity supply challenges. Further to this, the Integrated Resource Plan for Electricity (IRP) 2010, which is the country’s electricity strategy, outlines plans to add 41,346 MW of new electricity generating capacity over the next two decades. The plan shows a heavy ongoing reliance on coal-fired power, with coal expected to account for 45.9% (41,071MW) of South Africa’s electricity in 2030. The second largest component of the country’s energy mix in 2030 will be nuclear power which, at that stage, will represent 12.7% (11,400MW) of the total. The plan envisages the introduction of additional nuclear capacity from 2023, with a total of six tranches added by 2030 (9,600MW). The final go ahead has yet to be given for the nuclear programme, but it is estimated that the overall cost of the project will be between £29 - £70 billion. The IRP also includes the introduction of significant renewable power by 2030, including wind power, concentrated solar power, and photovoltaic solar power. Together, these three sources will therefore contribute 21% of South Africa’s total energy in 2030. ξ Infrastructure plays a central role in the South African Government's development agenda with a four year capital expenditure programme of £90 billion. ξ South Africa is the economic powerhouse of Africa, contributing more than 40% of all industrial output and accounting for 50% of the continent’s spending power. Key opportunities ξ Specialised Engineering Services ξ Education, Training and Skills ξ Supply of Hi-Tech Equipment ξ Transmission and Distribution ξ Nuclear Energy opportunities in areas such as: ξ New nuclear construction ξ Advisory and consultancy services ξ Specialised or technical products ξ Financial and legal services ξ Waste management, decommissioning and disposal Latest export opportunities in the Energy sector Latest export opportunities in South Africa Getting into the market Much of South Africa’s legal, economic and business practices and legislation is based on the UK equivalents. This makes operating in South Africa less problematic and alien than in other international markets. Regulatory standards also tend to mirror EU equivalents and the cultural and historical links are broadly positive in the UK’s favour. In return, the UK receives 4 out of every 5 South African investment projects in Europe. South Africa does operate a policy of Broad Based Black Economic Empowerment to redress the imbalances to black employment under the apartheid regime. More about doing business in South Africa Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. Jonathan Giliam Trade & Investment Adviser UKTI Johannesburg +27 (0)11 537 7225 E: Mandisa Ramotsho Trade & Investment Officer UKTI Johannesburg +27 (0)11 537 7226 E: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in the Energy sector Major Events Power Gen Africa Date: 6th - 8th November 2012 Website address: Africa Energy Indaba Date: 19 – 23 February 2013 Website address: Africa Utility Week Date: 14 - 15 May 2013 Website address: Useful links More about OMIS and other UKTI services for exporters
Posted: 28 September 2012

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