18 TAPPSA JOURNAL | VOLUME 3 2013

Sappi serious about energy co-generation and savingSouth Africans are increasingly feeling the strain on our national electricity grid. On the one hand tariffs are continually rising, while on the other the supply of electricity struggles to keep up with demand. Alternative solutions, and partners, are needed to keep the lights on.

Sappi is one of South Africa’s major manufacturers that is actively working on providing tangible solutions to help solve our national power shortage, while reducing greenhouse gas (GHG) emissions in the process.

Sappi’s support isn’t new. Committed to sustainability, and valuing collaboration so as to achieve positive change, a number of years ago it interacted with government to develop a co-generation programme.

“Sappi is already generating additional electricity from its Ngodwana (in Mpumalanga) and Saiccor (southern KwaZulu-Natal) operations to assist Eskom with its power supply constraints – particularly this winter, as Eskom performs maintenance on its power stations,” explains Sappi’s regional energy manager, Guy Spindler. And now, the company’s plans to generate more electricity look even more promising following

recent discussions between the pulp and paper industry body, PAMSA, and the government under the umbrella of ‘800MW of co-generation’; an initiative included in South Africa’s national Integrated Resource Plan.

“Sappi also has a number of co-generation and renewable biomass projects in the pipeline that could be implemented relatively quickly should a positive power programme be implemented by government,” adds Spindler. This includes a biomass power plant located at its Ngodwana Mill. This mill is currently a nett exporter of power (see table above).

▲ Sappi Ngodwana (above) will further assist Sappi Saiccor, starting this winter, in supplying Eskom with power.

ENERGY CO-GENERATION ENERGY CO-GENERATION

On a national level, the Sappi Southern African region (consisting of seven mills) generates more electricity than they purchase, and they could become a nett exporter of power to the national grid with a potential additional 200MW of power generation projects in the pipeline.

In addition, Sappi is running a number of energy reduction programmes to ensure the optimal use of electricity and the sustainability of its operations. Its performance reductions to date, relative to the year 2000, have been significant. Specific Purchase Energy (SPE) has dropped by 18.59%, with further reductions of 24.84% and 27.5% planned for 2014 and 2015, respectively.

As a major manufacturer, and an Eskom customer since 1938, Sappi has further committed to energy conservation by becoming a proud member of the Eskom 49M initiative. This programme, endorsed by government and business partners, is spurring an urgent need for South Africa’s population of 49 million people to embrace energy savings as a national culture and to join the global journey towards a sustainable future. ■

▼A view of the specialised cellulose upgrade at Sappi Ngodwana Mill, Mpumalanga.

AFRICAN UTILITY WEEK REPORT BACK

'Delivering beyond tomorrow' with a decentralised gridBy 2015, seven of the world’s fastest growing economies will be in Africa – but why does the continent’s power sector not reflect this, with more than 70% of Africans still having no access to electricity? Heralded by the 13th Annual African Utility Week as a “serious handicap to sustainable economic growth”, the lack of sustainable and affordable power in Africa took centre stage at the conference, held in Cape Town’s International Convention Centre in May and attended by over 4000 delegates from across the world.

In the conference’s opening ceremony, Brian Dames (CEO of Eskom) explained that “this is a time of transition for Africa. We are balancing those important imperatives of access, security and sustainability.” The first step for South Africa in addressing these issues is to move from a national grid to a regional grid, which will facilitate private investment in emerging markets and, according to Dames, will double the rate of energy efficiency. Eskom highlights the emerging markets prime for private investment as follows:► a shift in investment focus from generation to

transmission, creating new power plants and enabling energy security;

► cost effective energy storage solutions, to further enhance the reliability of Africa’s energy supply;

► and gas, which Dames believes will be “an important game changer for South Africa” given that it is less carbon intensive and its infrastructure is quicker to construct.

Commissioner in Zuma’s National Planning Commission, Anton Eberhard, believes that the power sector can learn a lot from the ICT sector: its higher degree of private investment and competition has fast-tracked its technology developments, enabling cellphone towers and submarine cables to criss-cross Africa – a stark contrast to the continent’s vastly undeveloped power infrastructure and its unexploited large energy sources. He believes that we can accelerate private investment through Independent Power Projects (IPPs). There are currently 50 large IPPs in place across 17 African countries, including 2450 MW of renewable energy IPPs in South Africa. Eskom has helped support the renewable energy market by having an integrated energy plan in place for the next 20 years, along with a national target of 42% renewable energy.

Going forward, Eskom and private investors will need to keep in mind that a decentralised energy grid will create a new, hybrid market that is not without challenges. According to Eberhard, generation expansion falls through the cracks in a hybrid market, as there is uncertainty on whether state owned utilities must continue to map out national generation plans or if the private sector’s increased involvement gives them more say. A hybrid market also opens the country up to different sources of funding, in particular a greater Chinese involvement (with additional BRICS investment in the power sector to follow), and “with that comes a different way of looking at risk and finance”, says Eberhard. ■