Exploration

Scatec will own 51% of the equity in the Mogobe BESS project. (SCATEC)

Scatec ASA has reached financial close for one of Africa’s first and largest standalone dispatchable battery energy storage system (BESS) called the Mogobe facility near Kathu, Northern Cape, which is close to high power demand centres

With an estimated capacity of 103 MW / 412 MWh, final preparations are ongoing before the beginning of its construction. Worth US$170mn of capex, the project's engineering, procurement, and construction (EPC) contracts that will be covered by Scatec, accounts for approximately 83%. Scatec will also provide operations & maintenance (O&M) as well as asset management (AM) services. 

Scatec will own 51% of the equity in the project with Perpetua Mogobe owning 46.5% and a holding company of the Mogobe Local Community Trust 2.5%. 

“This marks a new milestone for Scatec in South Africa and for the renewable energy transition in the country. The Mogobe BESS project is a first of a kind and reaffirms our standing as a leading renewable energy player in South Africa. We continue to see attractive growth opportunities in the market based on the need for growth in power generation, our strong position in the country and our strong and competent local team,” said Scatec CEO Terje Pilskog.

“We are showing and supporting that dispatchable energy and grid infrastructure are cornerstones to the sustainability of South Africa’s current and future energy system. By unlocking more grid capacity, we are enabling further electricity access, as well as enabling more renewable energy grid connections in years to come,” said Roar Haugland, executive vice-president, sub-Saharan Africa, Scatec.

Financing innovative energy solutions

Mogobe BESS was awarded a 15-year power purchase agreement (PPA) under the first bid window of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) in South Africa. As part of the PPA, Scatec will receive payments for making the storage capacity available for the National Transmission Company of South Africa (NTCSA) which will utilise the capacity to balance the grid.

The project will be financed by US$154mn of non-recourse project debt, with the Standard Bank of South Africa as mandated lead arranger, and the remaining by equity from the owners.

“Standard Bank is proud to continue our long-standing partnership with Scatec as the lead arranger for the groundbreaking Mogobe BESS project. This facility represents a significant step forward in South Africa’s energy transition, building on our successful collaboration on projects like Kenhardt. We’re committed to financing innovative energy solutions that drive sustainable development and economic growth in South Africa and across the continent,” said Rentia van Tonder, head of power - corporate and investment banking, Standard Bank of South Africa. 

Incidentally, South Africa remains one of the nine pilot countries – impacted by climate policies – which the European Investment Bank Global will support with its just resilience approach launched during the COP28. 

Centrifugal BCL compressor. (Image source: Baker Hughes)

Energy technology company, Baker Hughes, has been awarded a contract, to be booked in the third quarter, to supply advanced compression solutions to Saipem for TotalEnergies’ Kaminho Floating Production Storage and Offloading (FPSO) project in Angola

Baker Hughes’ centrifugal BCL compressor and Integrated Compressor Line (ICL) technology were selected because of their capacity to minimise emissions, eliminate routine flaring and reinject associated gas into the reservoir for storage. 

In July, tubular solutions provider Vallourec was onboarded to source 5,000 tonnes of OCTG solutions and associated services for the project.

All-electric project

The all-electric Kaminho project is the first large deepwater development in the Kwanza basin and comprises the conversion of a very large crude carrier (VLCC) to a floating production storage and offloading (FPSO) unit. With final investment decision (FID) on the project reached by TotalEnergies in May this year, production start-up is set for 2028 and is expected to reach 70,000 barrels of oil production a day.

“The all-electric Kaminho FPSO project in Angola is a key example of sustainable energy development whereby the project will provide critical energy supply to the country, leveraging proven technology to lower its overall carbon footprint,” said Alberto Matucci, vice president - gas technology equipment, industrial and energy technology at Baker Hughes. “Baker Hughes is proud to be contributing our vast experience in offshore and our leading low-emission compression technology to support TotalEnergies, Saipem and the Block 20/11 partners on this important project.”

This year, Baker Hughes was also awarded a major gas technology equipment contract in Algeria, further boosting its involvement in critical energy infrastructure projects across multiple geographies.

Petrofac will provide technical authority and discipline engineering support. (Image source: Petrofac)

Petrofac has bagged a new master service agreement (MSA) award from Marathon Oil in Equatorial Guinea

Under the agreement, Petrofac will provide technical authority and discipline engineering support, ensuring operational excellence, integrity and safety. It will support key onshore and offshore assets, including five offshore steel jacket facilities in the Alba Field and the Alba Gas Plant onshore.

This confirms Petrofac's further growth in Equatorial Guinea since April, when the company entered a five-year technical services contract worth US$350mn with GEPetrol on Block B asset. 

Growing interests in Africa

Alex Macdonald, managing director-Europe, Middle East and Africa, for Asset Solutions, said, “This award is testament to our growing reputation in the region as a safe and efficient service provider, delivering value for our clients. Africa is a key focus area for our business - we look forward to building our relationship with Marathon Oil, supporting its assets in Equatorial Guinea.”

Africa is a key focus for Petrofac’s Asset Solutions business, with Equatorial Guinea being the fifth country of interest, after its well-established operations in Ivory Coast, Ghana, and Senegal and Mauritania.

Emissions are set to almost halve by 2050. (Image source: DNV)

DNV has released its 'Energy Transition Outlook', which notes that 2024 will go down as the year of peak energy emissions 

Energy-related emissions are at the cusp of a prolonged period of decline for the first time since the industrial revolution. Emissions are set to almost halve by 2050, but this is a long way short of requirements of the Paris Agreement. The Outlook forecasts the planet will warm by 2.2 °C by end of the century.

The peaking of emissions is largely due to plunging costs of solar and batteries which are accelerating the exit of coal from the energy mix and stunting the growth of oil. Annual solar installations increased 80% last year as it beat coal on cost in many regions. Cheaper batteries, which dropped 14% in cost last year, are also making the 24-hour delivery of solar power and electric vehicles more affordable. The uptake of oil was limited as electrical vehicles sales grew by 50%. In China, where both of these trends were especially pronounced, peak gasoline is now in the past.

China is dominating much of the global action on decarbonisation at present, particularly in the production and export of clean technology. It accounted for 58% of global solar installations and 63% of new electrical vehicle purchases last year. And whilst it remains the world’s largest consumer of coal and emitter of CO2, its dependence on fossil fuels is set to fall rapidly as it continues to install solar and wind. China is the dominating exporter of green technologies although international tariffs are making their goods more expensive in some territories.

“Solar PV and batteries are driving the energy transition, growing even faster than we previously forecasted,” said Remi Eriksen, group president and CEO of DNV. “Emissions peaking is a milestone for humanity. But we must now focus on how quickly emissions decline and use the available tools to accelerate the energy transition. Worryingly, our forecasted decline is very far from the trajectory required to meet the Paris Agreement targets. In particular, the hard-to-electrify sectors need a renewed policy push.”

Striking shifts in energy mix

The success of solar and batteries is not replicated in the hard-to-abate sectors, where essential technologies are scaling slowly. DNV has revised the long-term forecast for hydrogen and its derivatives down by 20% (from 5% to 4% of final energy demand in 2050) since last year. And although DNV has revised up its carbon capture and storage forecast, only 2% of global emissions will be captured by CCS in 2040 and 6% in 2050. A global carbon price would accelerate the uptake of these technologies.

Wind remains an important driver of the energy transition, contributing to 28% of electricity generation by 2050. In the same timeframe, offshore wind will experience 12% annual growth rate although the current headwinds impacting the industry are weighing on growth.

Despite these challenges, the peaking of emissions is a sign that the energy transition is progressing. The energy mix is moving from a roughly 80/20 mix in favour of fossil fuels today, to one which is split equally between fossil and non-fossil fuels by 2050. In the same timeframe, electricity use will double, which is also at the driver of energy demand only increasing 10%.

“There is a growing mismatch between short term geopolitical and economic priorities versus the need to accelerate the energy transition. There is a compelling green dividend on offer which should give policymakers the courage to not only double down on renewable technologies, but to tackle the expensive and difficult hard-to-electrify sectors with firm resolve,” added Eriksen

The Outlook also examines the impact of artificial intelligence on the energy transition. AI will have a profound impact on many aspects of the energy system, particularly for the transmission and distribution of power. And although data points are currently sparse, DNV does not forecast that the energy footprint of AI will alter the overall direction of the transition. It will account for 2% of electricity demand by 2050.

*CO2 emissions from the combustion of coal, oil and gas