Firing Up South Africa’s Peakers

Stefano Borsarelli
Ansaldo Energia
Vice President of Sales, New Units, Africa

Headquartered in Italy and South Africa, Ansaldo Energia is one of the world’s leading suppliers, installers and service providers for power generation plants and components, with an installed capacity of over 194 GW in more than 90 countries. Vice President of Sales, New Units, Africa, Stefano Borsarelli, talks to Africa Energy Series- South Africa about the company’s activities throughout the continent.

What is the extent of Ansaldo Energia’s activity in Africa?

Ansaldo Energia has been present in Africa since the 1990s and has a long-term commitment to the African market: it has more than 16,000MW installed in several countries in Africa and a new office was opened in Lagos, Nigeria, in March 2018. In 2015 and 2016 Ansaldo Energia commissioned two large gas turbine power plants in South Africa – Avon, near Durban, and Dedisa, near Port Elizabeth – for a total of 1,000MW of electric peaking power.

The Avon and Dedisa peaking power plants, which are the first Independent Power Producer (IPP) thermal plants in South Africa, were developed by Engie, with minority shareholding held by Mitsui and local South African companies. The turbines used in the plant are liquid fuel fed, operate on a dual-fuel basis and can operate on diesel or gas. As the original equipment manufacturer (OEM) supplier, Ansaldo Energia manufactured, supplied, installed, commissioned and maintains the turbines in operation at these Speakers.

Where are the turbines manufactured and what is the potential for manufacturing locally?

We design and manufacture gas and steam turbines and electrical generators in Italy, as it is currently too difficult to manufacture them locally from a technological and feasibility standpoint. The high cost of components, metals, and coatings utilized requires us to develop economies of scale to remain competitive.

Despite this, we see localization as an opportunity that supports our competitiveness in the marketplace. We source some of the accessories locally, within proximity of the plants, to the extent that it is possible to do so. In addition, we select local vendors for civil works and erection, and we locally source manpower. The manpower profile that we have onsite throughout the construction phase changes, but the manpower peaked at 2,500 people, and the overwhelming majority, more than 95%, were South Africans, fulfilling and exceeding the Black Economic Empowerment requirements.

What has been the differentiating factor that has enabled you to penetrate sub-Saharan Africa?

From a purely commercial perspective, our competitiveness lies in the fact that we do not have as many overheads as larger companies, and so our fixed costs are lower. Being a relatively leaner medium-sized company in the power generation business, with about 4,400 employees, we are able to remain flexible during the execution of the project.

It is part of our culture as well since from a plant construction point of view we always try to find a way to satisfy the customer with a suitable, jointly discussed and customised technical solution. We do not try to impose a standard solution on the client. Italian companies have always been like this in the manufacturing business: we tend to custom make the overall products.

2019 is a ‘new dawn’ for the entire South African energy sector, as rising commodity prices, increased demand and an overall improvement in investor sentiment is spurring growth. Africa Energy Series – South Africa 2019, gathers the policy and decision makers in one of the continent’s most dynamic energy markets to produce the definitive resource for investors. The book is launching soon.