South Africa Energy Market Report - August 2017


Eskom announced Unit 1 of the Kusile power station project was brought into full commercial operation, adding 800MW to the national supply grid. The unit was completed ahead of its scheduled commercial operation date of July 2018. The Kusile project team formally brought unit 1 into commercial operation after finalizing all the phases of building the unit. The Kusile power station project is a green-fields coal-fired power plant which is located near the existing Kendal power station near eMalahleni in the Nkangala District, Mpumalanga.

Once complete, it will comprise six units, each producing 800MW for a total capacity of 4800 MW. Upon completion (planned for 2022), it will be the fourth-largest coal plant in the world. Kusile the first power plant in Africa to implement clean fuel technology such as flue-gas desulphurization - removal of oxides of sulphur, such as sulphur dioxide, from exhaust flue gases in power plants that burn coal or oil. This technology is fitted as an atmospheric emission abatement technology, in line with current international practice to ensure compliance with air-quality standards. The station has a total planned operational life of 50 years.


The South African Department of Energy has released the official petrol and diesel price adjustments for September 2017. Both grades of petrol - 93 and 95 (ULP & LRP) - will be increased by 67 cents per litre, whist the wholesale price of diesel will be going up by 44 cents a litre. The department confirmed that the price increases are due to the average international product prices of petrol, diesel and illuminating paraffin increasing during the period under review; 28 July 2017 to 31 August 2017. The Rand depreciated against the US Dollar during the period under review, on average, when compared to the previous period. The led to a higher contribution to the Basic Fuels Price on petrol, diesel and illuminating paraffin by 2.88c/l, 2.74c/l and 2.76c/l respectively. Further, the minister of energy also approved a retail margin increase of 4.6 c/l to be effected in the retail price structures of all octane grades of petrol with effect from 6 September 2017. This increase is necessary to accommodate the wage increases in pump attendants, cashiers and administrative staff at service stations.


South Africa is still implementing the first phase of the Greenhouse Gas Emission Mitigation system and needs to still allocate carbon budgets to companies that are significant emitters of greenhouse gases. South Africa has also not yet finalized the National Climate Change Adaption Strategy. Part of the reason South Africa has moved so slowly on this issue is because of how much fossil fuel companies are contributing to the economy. The WSSD (World Summit on Sustainable Development) where the Johannesburg programme of action was adopted for these things to occur was held 17 years ago. At that gathering, many companies made certain commitments, but now want to determine the pace of transforming green economies.

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