Issue 139, Jan 2025

Roundup of major energy and electricity news and developments in South Africa: 6 Jan 2024 to 19 Jan 2025

1. Innovative 250 MW concentrated solar PV plant with thermal hydro storage in SA.

2. Fire at Sasol’s Natref plant disrupts liquid-fuel supply chain in South Africa.

3. BlackRock’s climate about-turn: implications for South Africa and the world.

4. Namibia’s oil ambitions face setback as Shell writes off R76bn exploration costs.

5. Government faces court action over Eskom emissions amid deteriorating air quality.

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1. Innovative 250 MW concentrated solar PV plant with thermal hydro storage in SA.

Photon Energy Group, a renewable energy developer listed on the Warsaw Stock Exchange in Poland, is said to be moving forward with the development of a 250 MW concentrated solar photovoltaic (PV) plant in Winterton, KwaZulu-Natal, South Africa. The project will incorporate 150 MW / 1.8 GWh of thermal hydro storage, utilising RayGen's Solar Hydro technology. The company has secured 1200 hectares of land, and is said to have received favourable grid connection terms that ensures full integration into the national grid. Collaboration with South Africa’s national electricity utility, Eskom, is apparently underway to design and implement technical solutions for grid integration, aiming to enhance grid stability and optimise energy distribution. The environmental impact assessment (EIA) is expected to conclude by the fourth quarter of 2025, with the project ready to commence construction by the second quarter of 2026. Photon Energy is also pursuing Strategic Integrated Project (SIP) status under South Africa’s Presidential Infrastructure Coordinating Commission to expedite development timelines. RayGen's technology integrates high-efficiency concentrated photovoltaic (PV) modules with hydro-thermal storage to provide reliable, dispatchable, on-demand renewable energy for periods exceeding 12 hours. Sunlight is concentrated using a field of mirrors onto a central receiver containing PV modules, converting approximately one-third of the sunlight into electricity and the remainder into heat. This heat is stored in insulated water pits, creating a temperature difference that drives an organic Rankine cycle turbine to generate electricity when needed. This system is said to provide long-duration energy storage, grid stability through synchronous generation, and a minimal environmental footprint, with a projected lifespan exceeding 30 years. Photon Energy holds a 5.44% equity stake in RayGen and has been in partnership since April 2020.

2. Fire at Sasol’s Natref plant disrupts liquid-fuel supply chain in South Africa.

A fire that broke out at Sasol’s Natref refinery in Sasolburg on 4 January 2025 has disrupted South Africa’s fuel supply chain including jet-fuel supply to Johannesburg’s OR Tambo International Airport. The blaze, which forced a partial shutdown, has left the country heavily reliant on a single operational refinery, and has heightened South Africa’s dependence on imported fuel. Sasol, a major player in South Africa’s energy sector, confirmed the incident, citing damage to critical units. While the company has pledged swift repairs, the timeline for restoring full operations remains uncertain. The temporary closure of the Natref facility – responsible for producing significant volumes of liquid fuels – has prompted concerns about supply shortages. Sasol issued a notice highlighting the operational constraints linked to damage sustained during the fire and subsequent equipment malfunctions. The notice, published on the company’s website, detailed the impact on production capacity and outlined contingency measures to address the disruptions. Although limited production resumed within days, the disruptions underscore the precariousness of South Africa’s domestic fuel production. “This incident highlights the urgent need for South Africa to diversify and fortify its energy infrastructure,” said a leading industry analyst. The fire has reignited debates about the resilience of South Africa’s energy framework, with calls for expedited investment in alternative fuels and renewable energy projects. Meanwhile, consumers brace for potential price hikes and logistical challenges as the country grapples with the liquid-fuel supply chain challenges. While Sasol has assured stakeholders that contingency plans are in place to mitigate disruptions, the incident has laid bare the vulnerabilities in South Africa’s energy ecosystem.

3. BlackRock’s climate about-turn: implications for South Africa and the world.

In a seismic shift, BlackRock – the world’s largest asset manager, and holder of the majority of Eskom’s foreign bonds – has softened its stance on climate action, signaling renewed interest in coal investments. This development aligns with the broader rollback of green commitments by US financial institutions, a trend gaining momentum ahead of Donald Trump’s imminent return to the White House. Recent announcements reveal that prominent US banks – JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs – have withdrawn from the UN-sponsored Net-Zero Banking Alliance (NZBA), citing concerns over profitability and regulatory overreach. Adding to the retreat, the US Federal Reserve has declared its exit from an international climate regulatory group, signaling a potential unraveling of global climate finance initiatives. For South Africa, the timing is significant. The country’s coal sector and embattled state utility, Eskom, have faced mounting pressure under international decarbonisation mandates. BlackRock’s policy pivot could inject much-needed capital into South Africa’s coal-dependent economy, providing a lifeline to industries grappling with transition costs and energy insecurity. Analysts suggest Trump’s pro-coal agenda and skepticism of climate regulations will embolden financial institutions globally to reassess their commitments to net-zero goals. “This could relieve pressure on South Africa to expedite a costly energy transition,” says a Johannesburg-based economist. “However, it risks delaying vital investments in renewable energy and prolonging Eskom’s reliance on outdated coal infrastructure.” Critics warn of a “climate backlash” if these trends gain traction, undermining years of work toward global emission reductions. For South Africa, the question remains: can short-term relief justify long-term environmental risks? As Trump prepares to re-enter office, the stage is set for a contentious global debate – one that could redefine the future of climate policy and energy investments worldwide.

4. Namibia’s oil ambitions face setback as Shell writes off R76bn exploration costs.

Namibia’s ambitions to become a major oil producer have hit a significant hurdle with Shell’s decision to write off R76bn in oil exploration costs in the Orange Basin. The energy giant deemed its recent oil discoveries commercially unfeasible, citing technical and geological challenges, casting doubt on the immediate viability of large-scale production in the region. The Orange Basin, shared by Namibia and South Africa, has been hailed as one of the most promising oil frontiers in recent years, attracting global energy heavyweights like Shell, TotalEnergies and QatarEnergy. Despite Shell’s disappointing results, Namibia’s Ministry of Mines and Energy remains optimistic, citing continued exploration efforts by other operators and the basin’s confirmed hydrocarbon potential. “Shell’s write-down reflects commercial challenges rather than a lack of resources,” the ministry stated, emphasizing that the Orange Basin remains a critical part of Namibia’s energy strategy. The potential impacts extend beyond Namibia’s borders. A successful oil industry could transform Namibia’s economy, creating jobs and reducing regional energy dependence. For the Southern African Development Community (SADC), it represents an opportunity to boost energy security and diversify from coal. However, Shell’s move signals the high risks and complexities involved in deep-water exploration and extraction. Energy analysts caution that Namibia should tread carefully, balancing its oil ambitions with environmental and economic considerations. Shell’s exit underscores the importance of diversifying energy investments, including renewables, to safeguard the region’s long-term energy future. As Namibia navigates this setback, the Orange Basin’s story is far from over, with stakeholders awaiting results from ongoing exploration campaigns to determine its ultimate promise.

5. Government faces court action over Eskom emissions amid deteriorating air quality.

The South African government is facing a legal showdown as environmental groups take it to court over Eskom’s repeated violations of air quality standards. This legal battle underscores growing tensions between South Africa’s commitment to environmental protection and its reliance on coal-fired power to address its electricity supply challenges. GroundWork and the Vukani Environmental Justice Movement in Action, supported by other advocacy groups, are challenging the constitutionality of a decision by the Minister of Forestry, Fisheries and the Environment last year allowing Eskom’s Majuba, Camden, Hendrina, Arnot, Tutuka, Kendal, Kriel and Grootvlei coal-fired power stations to deviate from South Africa’s minimum emissions standards. These power plants are among the world’s largest SO2 emitters, contributing to severe air pollution in Mpumalanga, Gauteng and beyond. The applicants argue that the government’s lax enforcement of emissions standards violates residents’ constitutional rights to a healthy environment. This legal action follows a December 2024 ruling that barred the government from approving new coal-fired power stations without strict compliance with air quality laws. While environmental advocates viewed the judgment as a significant precedent, Eskom’s attempts to circumvent pollution controls have reignited legal and public scrutiny. If the court rules against the government, the impact could be profound. Eskom may be compelled to upgrade its aging power plants to meet emissions standards, which would require billions of rands in investment. Conversely, failing to act risks exacerbating public health crises and could jeopardise South Africa’s climate commitments. As South Africa grapples with rolling blackouts and increasing pressure to transition to cleaner energy, this case highlights the delicate balance between economic, environmental and social imperatives. The outcome could set a critical benchmark for environmental accountability in the country.

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