Uncategorised

Open Source Design

Getting started with Form2Content Lite

Open Source Design

Getting started with Form2Content!

In the below steps we will show you how to create your own Joomla articles via Form2Content.
http://documentation.form2content.com/f2c-getting-started/32-getting-started-f2c-step-by-step

What type of articles do you want to create?

The installed demo content type is an example of a blog. Each time a F2C form is filled out a Joomla article is created. In the content type manager you define permissions, in which category the Joomla article is saved and article settings like show/hide title, intro etc.

http://documentation.form2content.com/f2c-content-types

Define the fields to collect the article data

In the F2C Content Type manager you will find the link to the F2C Fields Manager (cog icon in the second column). In the field manager you define the data you want to collect via a range of different fields. In our blog example we have used single-select list, multiline text field, an editor, image upload etc.

http://documentation.form2content.com/f2c-field-types

Define the article template (layout with placeholders)

Now that we can collect the article data we need to create a template to display this data within the Joomla article. Each created article will look teh same since we use the same layout (template).

The Form2Content rule: Form fields data + template layout = Joomla article html

Please see our other example article about where the F2C article templates are located and how the placeholders for the data work.

http://documentation.form2content.com/f2c-templating

When all works in the back-end, create a menu link to the front-end

When you can create Joomla article via Form2Content in the back-end you can add the front-end access and let your website users add Joomla articles with great ease … and they all look the same!

http://documentation.form2content.com/f2c-front-end

Source: Form2Content Documentation

Author: Patrick Faasse, Julien Brouns – creators of Form2Content Joomla CCK

Open Source Design

Article templates, the true strength of Form2Content

Open Source Design

In the Joomla back-end under components you can find the link to Form2Content. One of the links is to the Form2Content Template manager.

The F2C article templates are used to render the form data into the layout of your Joomla article. Probably the easiest way to understand this is to have a look at the two files we have included to generate the BLOG demo articles.
The two files can be seen in the F2C Template Manager or via FTP:

< root >/media/com_form2content/templates

blog_intro_template.tpl
blog_main_template.tpl

Use of Smarty Templating and Template parameters (placeholders)

In the two F2C article templates included we have added extra documentation to show what you can do with them. This will hopefully get you to grips with the syntax quickly!

PLEASE read all the documentation on Form2Content templating here!

 

 

Source: F2C Documentatation on article templates

Author: Patrick Faasse, Julien Brouns – creators of Form2Content Joomla CCK

Members Overview

1. Manufacturer of Wind Turbines
2. Independent Power Producer/Utility
3. Development Finance Institution
4. Developer
5. Construction/Installation/Grid Connection
6. Operations and Maintenance
7. Consultancy
8. Sustainable Development/ED/SED expert
9. Transport/Logistics
10. Academia/Research
11. Professional Services
12. Financial Services
13. Non-Governmental Organization
14. Other
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/1-red-cap-investment|width=60%|height=70%}Red Cap Investment{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/3-siemens-ltd|width=60%|height=70%}Siemens Ltd{/modal} x
Suzlon x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/5-globeleq-south-africa|width=60%|height=70%}Globeleq South Africa{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/6-innowind|width=60%|height=70%}Innowind{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/7-biotherm-energy-pty-limited|width=60%|height=70%}BioTherm Energy (Pty) Limited{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/9-south-africa-mainstream-renewa|width=60%|height=70%}South Africa Mainstream Renewable Power Development{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/10-arup-pty-ltd|width=60%|height=70%}Arup (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/11-stellenbosh-university|width=60%|height=70%}Stellenbosh University{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/14-obelisk-group|width=60%|height=70%}Obelisk Group{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/15-gdf-suez-energy-southern-afric|width=60%|height=70%}GDF SUEZ Energy Southern Africa{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/16-eskom|width=60%|height=70%}Eskom{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/13-juwi-renewable-energies|width=60%|height=70%}juwi Renewable Energies{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/153-bjorn-jochems|width=60%|height=70%}Bjorn Jochems{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/154-wind-energy-enercon-south-afri|width=60%|height=70%}ENERCON GmbH{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/18-african-clean-energy-developme|width=60%|height=70%}African Clean Energy Developments{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/19-goldwind|width=60%|height=70%}Goldwind{/modal} x
ULTRA-FLOW x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/118-felix-bielefeld|width=60%|height=70%}Felix Bielefeld{/modal} x
3E x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/24-arcelor-mittal|width=60%|height=70%}Arcelor Mittal{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/25-dnv-gl|width=60%|height=70%}DNV GL{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/26-lm-wind|width=60%|height=70%}LM Wind{/modal} x
Jiska de Groot x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/204-duncan-ayling|width=60%|height=70%}Duncan Ayling{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/29-sagit-energy-ventures|width=60%|height=70%}Sagit Energy Ventures{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/30-umoya-energy-rf-pty-ltd|width=60%|height=70%}Umoya Energy (RF) (Pty) Ltd{/modal} x
Sondereind Wind Energie (Pty) Ltd x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/32-wind-prospect|width=60%|height=70%}Wind Prospect{/modal} x x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/33-mott-macdonald|width=60%|height=70%}Mott MacDonald{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/34-sawea|width=60%|height=70%}SAWEA{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/35-cennergi|width=60%|height=70%}Cennergi{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/37-altgen-recruitment|width=60%|height=70%}Altgen Recruitment{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/39-nordex-energy-south-africa-pty|width=60%|height=70%}Nordex Energy South Africa (Pty.) Ltd.{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/40-copper-development-association|width=60%|height=70%}Copper Development Association Africa{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/41-arcus-consultancy-services-ltd|width=60%|height=70%}Arcus Consultancy Services Ltd{/modal} x
Khana x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/117-rainmaker-energy|width=60%|height=70%}Rainmaker Energy{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/44-saretec|width=60%|height=70%}SARETEC{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/47-kouga-wind-farm-rf-pty-ltd|width=60%|height=70%}Kouga Wind Farm RF (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/48-chris-nivison|width=60%|height=70%}Chris Nivison{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/49-hytorc-industrial-tools-sa-pty|width=60%|height=70%}HYTORC INDUSTRIAL TOOLS SA (PTY) LTD{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/53-just-energy|width=60%|height=70%}Just Energy{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/54-aurecon-south-africa-pty-ltd|width=60%|height=70%}Aurecon South Africa (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/57-ensafrica|width=60%|height=70%}ENSafrica{/modal} x
Michael Manson-Kullin x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/59-iris-wink|width=60%|height=70%}Iris Wink{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/60-richard-fyvie|width=60%|height=70%}Richard Fyvie{/modal} x
Gerald Nienaber x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/62-windlab|width=60%|height=70%}Windlab{/modal} x
Andrew Greeff x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/65-k2-management|width=60%|height=70%}K2 Management{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/66-3-energy-renewables-pty-ltd|width=60%|height=70%}3 Energy Renewables (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/68-southern-african-institute-of-|width=60%|height=70%}Southern African Institute of Steel Construction{/modal} x
Rob Short x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/125-monsson-south-africa|width=60%|height=70%}Monsson South Africa{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/70-g7-renewable-energies-pty-ltd|width=60%|height=70%}G7 renewable energies (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/73-consolidated-power-southern-af|width=60%|height=70%}Consolidated Power Southern Africa{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/158-edplatform|width=60%|height=70%}EDPlatform{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/75-capeafrica-renewable-energy-pt|width=60%|height=70%}CAPEAFRICA Renewable Energy (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/77-industrial-development-corpora|width=60%|height=70%}Industrial Development Corporation of South Africa{/modal} x
Diane Naidoo-Ngcese x
Tony Duarte x
vuyani ngcuka x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/139-wkn-windcurrent-sa-pty-ltd|width=60%|height=70%}WKN-Windcurrent SA (Pty) Ltd{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/140-general-electric|width=60%|height=70%}General Electric{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/160-azari-wind|width=60%|height=70%}Azari Wind{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/148-kpmg-inc|width=60%|height=70%}KPMG Inc.{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/149-dawid-pretorius|width=60%|height=70%}Dawid Pretorius{/modal} x
DCD Wind Towers x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/133-council-for-scientific-and-ind|width=60%|height=70%}Council for Scientific and Industrial Research{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/109-wendy-mccallum|width=60%|height=70%}Wendy McCallum{/modal} x
Boris Wanschura x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/227-gajog-investments|width=60%|height=70%}Gajog Investments{/modal} x
Mbuyamba Tshibanda x
Berchtwald Rode x
Southern-African German Chamber of Commerce x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/120-karen-versfeld|width=60%|height=70%}Karen Versfeld{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/102-enel-green-power-rsa-pty-ltd|width=60%|height=70%}Enel Green Power RSA (Pty) Ltd{/modal} x
North West University, Potchefstroom x
Harambee Youth Employment Accelerator x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/127-sudashon-naidoo|width=60%|height=70%}Sudashon Naidoo{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/129-dorper-wind-farm|width=60%|height=70%}Dorper Wind Farm{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/130-rhonda-millikin|width=60%|height=70%}Rhonda Millikin{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/138-aurora-wind-power-rf-pty-ltd|width=60%|height=70%}Aurora Wind Power (RF)(PTY) LTD{/modal} x
Acciona Energy South Africa Global (Pty) Ltd t/a A… x
Charlotte Higgins x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/151-gesa-marie-mackeprang|width=60%|height=70%}Gesa Marie Mackeprang{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/208-ignatuis-burger|width=60%|height=70%}Ignatuis Burger{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/193-britta|width=60%|height=70%}Britta{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/165-woesa|width=60%|height=70%}WOESA{/modal} x
ESIL x
Knowledge Pele x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/170-bioinsight-pty|width=60%|height=70%}Bioinsight Pty{/modal} x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/1-business/171-sany-southern-africa-pty-ltd|width=60%|height=70%}Sany Southern Africa (Pty) Ltd{/modal} x
Christo van der Merwe x
Dipolelo Elford x
{modal https://sawea.org.za/index.php/click-here-to-join-sawea/2-individual/183-valerie-bischof|width=60%|height=70%}Valerie Bischof{/modal} x
Centriq Insurance Company Limited x
Devash Appalraju x

Enabling wind turbines to operate at high wind speeds

Wind turbines are typically designed to shut down when wind speed reaches a level which could result in damage to the turbine. In high windspeed and gale prone areas this means a regular curtailment of production. New developments allow reduced operation under these conditions rather than complete curtailment, with associated advantages for network stability and energy production.

At very high wind speeds, typically above 25 km/h, most wind turbines cease power generation and shut down. The wind speed at which shut down occurs is called the cut-out speed, or sometimes the furling speed. Having a cut-out speed is a safety feature which protects the wind turbine from damage. Shut down may occur in one of several ways. In some machines an automatic brake is activated by a wind speed sensor. Some machines use furling to twist or “pitch” the blades to spill the wind. Still others use “spoilers”, drag flaps mounted on the blades or the hub which are automatically activated by high rotor revolutions, or mechanically activated by a spring loaded device which turns the machine sideways to the wind stream. Normal wind turbine operation usually resumes when the wind drops back to a safe level [1].

Shut down using any of the mechanisms can have negative effects including:

  • A sudden loss of generating power: If several windfarms, or a large number of turbines are affected, the sudden loss of output could result in network stability problems.
  • Loss of income from the wind farm: In high wind speed areas this can be significant.

To prevent frequent shutdowns and restarts, which contribute to fatigue loading of the turbine, hysteresis is often applied, so that the wind turbine starts up only when the average wind speed reaches a value lower than the shutdown wind speed, i.e. the turbine will only restart after the wind speed has fallen below a level less than the cutoff speed by several m/s. This is not a problem where wind speeds rarely exceed the cutoff speed, but can be problematic in areas of high wind speeds dominated by short gusts of wind above the cutoff speed and high turbulence [2]. The net result is a loss of production as the turbine switches in and out of operation. The effect of hysteresis on a typical power curve of a modern wind turbine is shown in Fig. 1.

Fig. 1: Effect of high wind speed shutdown hysteresis [1].

Fig. 1: Effect of high wind speed shutdown hysteresis [1].

The wind turbine will shut down when the average wind speed reaches a certain value denoted V4 in the figure. The typical shutdown wind speed is 25 m/s. When the average wind speed drops below the shutdown value to value V3, the wind turbine starts again. Energy production is lost in the transition between V4 and V3.

Operation above cut-out speed

Wind turbines are enabled to operate at speeds above the cut-out speed by derating. Derated operation is the ability of a wind turbine or an entire wind plant to operate below its maximum capacity during times of high wind speed. Derating uses a range of control methods, from pitch control of blades to generator torque control in order to operate a wind turbine at below its maximum capacity. Solutions to this problem allow the turbine to continue generating at wind speeds higher than the cut-off but at reduced levels. All approaches use a smooth ramp control of power with increasing wind speed. Two approaches are possible:

  • Ramp rate control: In this system the output is gradually reduced in accordance with a preset method as wind speed increases to zero output at wind speed with zero probability. This eliminates the hysteresis effect as operation continues backwards and forwards as wind speed increases and decreases. Ramp rate control is illustrated in Fig. 2.
  • Dynamic control: Instead of predefined wind-power ramp control a dynamic approach is used that relies on the wind turbine state estimation and worst case wind speed prediction. The algorithm assesses all wind speeds with defined characteristics and chooses the one that produces the maximal loads. Wind turbine power or rotor speed setpoint is then adjusted to ensure that even in such an extreme event design driving loads will remain in the predefined envelope [1].

Fig. 2 shows the difference between the two approaches.

Fig. 2: Comparison of soft cut-out strategies [2].

Fig. 2: Comparison of soft cut-out strategies [2].

Control mechanism details

Systems use blade pitch-control systems to achieve a smooth ramp-down of power when winds get to speeds of about 25 m/s and threaten to overload a turbine. By pitching the blades away from the wind, the turbines can keep operating at a lower power until the storm-force wind subsides.

The maximum wind speed is determined by the controls of the wind turbine. Above the rated speed the blade speed is controlled by varying the pitch. The maximum speed is the wind speed at which it no longer becomes possible to maintain the blade speed at maximum power. Control above the maximum wind speed is affected by varying the pitch to reduce the blade speed, i.e. operating in a non-optimal configuration which still generates some power, and gently ramping up and down until the point is reached where even this is no longer possible and turbine is stalled.

Advanced system controls use a combination of blade speed and torque control. This type of control is only applicable to double conversion systems where the output frequency is not dependant on rotational speed. Reduced output is achieved by slowing rotational speed, which reduces the output power of the alternator, allowing the blade speed to be controlled to a manageable value.

Fig. 3: High wind ride through controls [3].

Fig. 3: High wind ride through controls [3].

Examples

Siemens “high wind ride through” system

With high wind ride through, the wind turbine will gradually reduce power output instead of shutting down completely. This results in a more stable power output at high wind speeds. As a result, the operating range of the wind turbine at high wind speeds is extended, while remaining load neutral. This is achieved by intelligently pitching the blades out of the wind as soon as the rated power output is reached and by limiting rotational speed in proportion to the increase in wind speed and turbulence intensity. The gradual derating eliminates abrupt cutouts, which significantly improves grid stability. This is an advantage, especially for larger wind farms where commitment to a certain level of energy production is often required.

Enercon “storm control”

The Enercon system ramps down speed using pitch angle control to vary blade speed. The power curve diagram showing operation with storm control (Fig. 4) demonstrates clearly that the wind turbine does not shut down automatically when a certain wind speed is exceeded, but merely reduces power output by slowing down the turbine’s rotational speed.

Fig. 4: Enercon’s “storm control” [4].

Fig. 4: Enercon’s “storm control” [4].

This is achieved by slightly pitching the rotor blades out of the wind. Once the wind speed drops, the blades turn back into the wind and the turbine immediately resumes operation at full power. This prevents yield-reducing shutdown and start-up procedures.

Retrofitting

As the systems are primarily based on the control portion of the turbine, it would appear that the function could be retrofitted to existing wind turbines.

References

[1]    L Horvath: “The influence of high wind hysteresis effect on wind turbine power production at Bura-dominated site”, www.ewea.org/ewec2007/allfiles2/498_Ewec2007fullpaper.pdf
[2]    M Jelavic: “Wind turbine control beyond the cut-out wind speed”,https://bib.irb.hr/datoteka/619383.EWEA13_clanak.pdf
[3]    Siemens: “High wind ride through: providing more predictable output”,www.energy.siemens.com/br/pool/hq/power-generation/renewables/wind-power/Flyer-WindPower.pdf
[4]    Enercon: “Wind energy converters”, www.enercon.de/p/downloads/EN_Productoverview_0710.pdf

iheartwind Uploads

The South African Wind Energy Association (SAWEA) has launched an #iheartwind campaign, celebrating people’s love for wind energy across South Africa.

The campaign is based on the international hashtag #iheartwind which encourages people from around the globe to participate. Please join our South African campaign using these 4 easy steps:

  1. Print the #iheartwind poster here
  2. Write why you love wind power
  3. Take a photo of yourself with the sign – (you can even get creative and take your photo in front of a wind farm, or with the child that you hope to protect from pollution)
  4. Post it on Twitter, Facebook, or Instagram with the hashtag #iheartwind and @_sawea
  5. Upload it to our dedicated page at https://sawea.org.za/iheartwind-posts by using the form below.

Medupi vs Wind Farm

Graph shows: Capacity factor/availability of plant: Wind Farm vs Medupi

 

 

Year

Capacity factor/availability of plant (Medupi)

Capacity factor/availability of plant (80MW Wind Farm) assuming construction commenced with Medupi in May 2007

Construction starts

0

 

 

 

1

0%

0%

Wind farm commissioned after about 18-24 months

2

0%

0%

 

3

0%

25%

 

4

0%

35%

 

5

0%

40%

 

6

0%

40%

 

7

0%

40%

 

8

0%

40%

Medupi unit 1 synchronised

9

14%

40%

 

10

14%

40%

 

11

14%

40%

Medupi unit 2 synchronised

12

28%

40%

Medupi unit 3 synchronised

13

42%

40%

Medupi units 4 & 5 synchronised

14

70%

40%

Medupi unit 6 synchronised

15

84%

40%

 

16

84%

40%

 

17

84%

40%

 

18

84%

40%

 

19

84%

40%

 

20

84%

40%

 

21

84%

40%

Wind farm reaches end of life – rehabilitated or can be repowered

22

84%

0%

 

23

84%

0%/40%

 

24

84%

0%/40%

 

25

84%

0%/40%

 

26

84%

0%/40%

 

27

84%

0%/40%

 

28

84%

0%/40%

 

29

84%

0%/40%

 

30

84%

0%/40%

 

Contact Us

Contact Details

Tel: +27 (0) 11 214 0664

Email: admin@sawea.co.za

Office Hours: Mon-Fri, 8am to 5pm

Address Details

RE Hub
53 Dudley Road
Corner Bolton Avenue
Parkwood
Gauteng
2193

Will Nene lift SA out of Fragile Five? On these pronouncements, unlikely

Click here to view this clip

Funny how life works out. During his days as trade unionist, South Africa’s new Finance Minister Nhlanhla Nene reputedly organised the first ever strike in the country’s financial sector. Now he has to deal directly with consequences of a platinum mining strike whose knock-on effect hampers Treasury’s ability to meet commitments without increased borrowing or hiking taxes. Having served for five and a half years as widely admired Pravin Gordhan’s deputy, the initial reaction to Nene’s promotion was muted. He’s positioned as a “technocrat”,  a safe pair of hands.

 My own close-up experience with the new Minister left room for doubt about his assessment of the only people sector capable of lifting SA’s economy out if its self-inflicted funk. But for this capital hungry developing country, what we see from inside means little when compared with perceptions from abroad. South Africa is one of what Morgan Stanley’s James Lord famously dubbed the “Fragile Five” – the most economically vulnerable nations on earth. The key to exiting this dubious collection is clear: “We always look for the rise of new leaders with a pragmatic understanding of economic reform and a mass base to push it through.” Ahead of the Election, Morgan Stanley told its clients: “Among the five, the prospects for reform look particularly fragile in South Africa.”  In this segment from Friday’s CNBC Power Lunch, I asked two experts to assess Nene’s pronouncements in an interview with the channel. From their response, don’t bet on him delivering what the nation’s foreign funders are looking for. – AH

ALEC HOGG: The South African economy has been plagued by weak economic data, which has sparked fears that we’re heading into a recession. Well, whether that’s true or not, we’ll certainly be finding out in the next few minutes. We have the first, I suppose, public pronouncement since his appointment as Finance Minister on the economy, by Nhlanhla Nene, the new Finance Minister. To help us to interpret this, Chris Hart who is Chief Strategist at Investment Solutions and Rowan Williams, who’s Director at Nitrogen Fund Managers are with us in the studio. We’re going to then look at three clips, watch them with us and we’ll ask our two experts to give us some insights. Let’s take a look at the first of these, the reality of where the South African economy is right now. Nhlanhla Nene: this is his view.

MINISTER NHLANHLA NENE: Part of those realities is actually built on that situation because we actually are not fully recovered. We have seen a period of low employment in the country or rather, high unemployment. We also have had slow growth, and we’ve also seen challenges in our mining sector. We’ve also seen issue that relate to the rest of labour unrests, but it’s been a number of those challenges. However, we see all these things. We know what the problems are. How does this government respond to those problems?

BRUCE WHITFIELD: We see what these problems are. It’s ‘how does this government respond to those problems’.

MINISTER NHLANHLA NENE: Look, since the beginning of the previous administration, this government set about to put together the country’s plan, a long-term vision, a practical and workable intervention, so that plan is now in place. It has gone through and was accepted by everyone.

ALEC HOGG: All right, Mr Hart. ‘A period of unemployment’. How long is he talking about…20 years…15 years?

CHRIS HART: Unemployment is structurally high. It’s unusually high and it’s not because of outside factors. It’s because of inside factors. Our stagnation since 2008 is not because of the outside world. That obviously had an effect, but it’s because of internal factors. Whereas we’re trying to deal with poverty, inequality, and unemployment, what’s happening is government policy is dealing with poverty and inequality through the way they tax and apply the tax. In other words, if you earn well, your income is taken down and then we redistribute the actual in the proceeds. In that process, what you’re doing economically is you’re shifting resources to consumption. To deal with unemployment, which is then poverty reduction (not poverty alleviation) you need to be shifting resources to investment. When we look at the economy, we have the growth drivers in households very weak. The government’s finance is a little bit in tatters – that’s weak. The global economy’s cabinet’s not going to be a driver of growth internally in South Africa. The only strong lever you can pull is in fact, to drive investment to get us out of this hole.

ALEC HOGG: That’s really well put there, Chris. From your side Rowan, Bruce asked Nhlanhla Nene what the government’s doing about it and he reverted back to type on the National Development Plan. Now surely, there comes a time when people like you, who manage capital, say ‘look, we don’t actually buy this anymore. We’ve been hearing this. We’ve seen this movie too many times. Let’s rather look elsewhere’?

ROWAN WILLIAMS: You’re absolutely right, and I think what’s been happening from an investment perspective is we obviously go where the opportunities are. Chris was outlining how the government has really been focusing on consumption and fuelling that side of the economy. That’s where investors have been putting capital. If you look at the retail sector – the more consumer driven sector – those have until recently, with the more difficult environment we’re currently in – have performed exceptionally well. Compare that to for example, the sectors that would benefit from increased investments such as the construction sector. It’s had its ups and downs and I think a lot of optimism every time the government and Zuma make a State of the Nation Address but really, no delivery from the government. The capital and the investment opportunities are going where the money has been going. From an investment perspective again, people have disappointed on the construction side, because the capital’s not going there and I don’t think we see the government in the short-term really addressing the issue in terms of their capacity constraints.

ALEC HOGG: You’ve laid the table. You’ve now explained the rational response to it. Let’s get to our next clip because he spoke about current infrastructure plans. Remember, this is what government keeps telling us is going to drive the economy forward and what the impact of the ratings agency downgrading might have on this infrastructure plan. Here’s Finance Minister Nhlanhla Nene.

MINISTER NHLANHLA NENE: I don’t think it’s only talking, as I said. Implementation is actually being stepped up as we speak. If you look at the amount of infrastructure that has been rolled out in the past five years, it exceeds the infrastructure in this country that was rolled out in the past 20 years. That has made a significant and huge impact on the lives of the people. In creating an environment that is conducive for the private sector to come in as well. As you seen also with our energy program, the IPP’s… I keep saying that we’ve seen a tremendous amount of government working with business in something that is of mutual benefit to both the public and the private sector. That is being stepped up and a lot of money has gone into it. Three years going forward, we’re actually looking at close R1tr again, going into that infrastructure.

BRUCE WHITFIELD: However, we get closer Minister, to ratings in downgrades to junk bond status. All of these plans come to nil, don’t they, if we can’t afford to borrow money?

The key graph from the Fragile Five report - The top left quadrant is where you DON'T want to be

Key graph from Fragile Five report – Top left quadrant is where you DON’T want to be – high inflation and big deficits.  SA is there alongside Turkey, India, Brazil and Indonesia

MINISTER NHLANHLA NENE: I don’t think they come to nil. I think they just present us with an opportunity of actually stepping it up. If you look at – as I said earlier – the areas of focus, it doesn’t matter how much our economy grows if we actually haven’t addressed the issues of energy. The economy will choke and therefore, we need to focus on the critical areas without necessarily chasing the numbers. The numbers will actually tell, once we have reached a point where… That’s why the acceleration and completion of Medupi is at the top of our agenda. The proper sequencing also of our entire energy mix, because it’s not only coal. We also need to look at renewable energy and that’s why I’m saying the IPP’s have been a major success. The rollout, unlocking the bottlenecks, roads infrastructure, the ports (as we speak), a number of our parastals have actually put in money where it matters most, and we are seeing significant investment going in that area. The consequences will actually show in due course.

ALEC HOGG: All right, well there’s quite a lot in that, Chris Hart. Let’s start off with the first one. He says we spent more in this economy in the last five years than in the previous 20 years.

CHRIS HART: Well, amounts of money is not particularly useful because when you start to get the financial repression that’s coming through with a lot of the so-called ‘investment-making Gautrain’ being one of them and World Cup stadiums being another: a lot of the investment is dead capital. In other words, you invested in something but if there’s no return on that capital to generate the next lot of investments to draw more money out. We are capital-deficient, so they’re not dealing with a macroeconomic mismatch of trying to invest at a rate much higher than what they are, and with the savings rate much lower than what we are. That macroeconomic mismatch has put us in the Fragile Five. The other problem with the investment is that it’s ‘one for the price of four’ or ‘one for the price of two’, which is a very bad deal. Whether it’s a Gautrain freeway and foot-proving program, which was a ‘one for the price of three’ kind of thing where you get one and pay three times the price of what it should be. Medupi, which is now how many years behind schedule, and we don’t know whether they’ve built a power station or a pipe bomb – one’s not sure in that sense – at huge cost overruns. It doesn’t mean that because we invested… What it means is that you’re actually taking scarce resources and pushing them in areas where it’s not optimal.

ALEC HOGG: Is this new Finance Minister deluded, is he just poorly informed, or does he not understand?

CHRIS HART: I don’t think he’s deluded, but these are problems that I don’t hear being debated.

ALEC HOGG: But he’s telling us everything’s cool. He’s telling us ‘we’re spending money and spending more than we did in the past’.

CHRIS HART: If you look at how South Africa’s underperformed since 2008, we’re making what I call the triple mistakes to deal with the triple problems. Triple mistakes of striking our way into prosperity, regulating our way into prosperity, and taxing our way into prosperity – there are your three mistakes. We cannot be taxing capital formation when you’re capital deficient with huge unemployment. You can’t be taxing investment viability. Investment is going to be…and it has to be properly directed investment – and I do apologise. There’s investment into what I call ‘the wealth-consuming sectors’ and there are ‘the wealth-producing sectors’. You can have teachers, nurses, and policemen, but only if you have manufacturing, mining, and agriculture to pay for it. Those are the wealth-producing sectors and the wealth-consuming sectors.

ALEC HOGG: Rowan, let’s pick up on a lot of those points. Perhaps the one specific there was that the IPP’s have been a great success.

ROWAN WILLIAMS: Yes, he’s clearly talking a political agenda. He’s obviously got to lay out the positive side.

ALEC HOGG: So this is a politician, rather than an economist.

ROWAN WILLIAMS: Yes, at this point. They obviously have to show that they are delivering. There’ve been little pockets of success, but if we look, we still have a major energy crisis in this county so they can’t really have been a success because we’re not filling the hole. Medupi’s been a major failure and if you look at the S & P commentary on the downgrade, the finance pressure that Eskom is putting in terms of government finances is creating some of the issues in terms of the downgrade as well. Obviously, in terms of the economy, it’s starting to have a major impact. This is part of the government’s lack of ability to deliver and these are structural issues, as Chris also mentioned.

ALEC HOGG: Let’s see our last clip, because this talks to the economic outlook for the next ten years. Can we believe the new Finance Minister perhaps a bit more on this one? Watch closely.

MINISTER NHLANHLA NENE: Well, that is explained by the fact that we are… At times, we would like to classify ourselves as a large economy, so those vulnerabilities actually also come from the size of our economy as well as our exposure to the global environment, but I would want to believe that our expedition of the implementation of our National Development Plan, – which I said earlier is not only a plan – it is at the implementation stage. It is key to actually addressing most of our challenges as we move forward.

ALEC HOGG: So we’re back to politics again – implementation of the National Development Plan. It’s a mantra that is being expressed by Zuma. Just one little point there: ‘as a large economy’. South Africa’s not a large economy.

Another telling table from the Fragile Five report showing how heavily SA has benefitted from foreign fund flows

Another telling table from the Fragile Five report showing how much South Africa (ZAR) has benefitted from foreign fund flows – and how much it needs them for economic growth.

CHRIS HART: We’re not a large economy and that’s a mistake. We’re deluded that we’re big fish in a small pond. We should be emulating Mauritius, to try to make ourselves the easiest place to do business, and not the most difficult. We’re not like China where you can put the barriers up but there’s such deep potential behind the barriers that people are prepared to climb those barriers. Our mistake is in the global context.

ALEC HOGG: If we were an American State Chris, do you know that we’d rate 17th?

ROWAN WILLIAMS: Seventeenth? I would not be surprised.

ALEC HOGG: We’re one-sixth the size of Texas.

CHRIS HART: The big thing is in the National Development Plan, one of the things that I think is a good thing because you don’t get growth without investment; they need to raise the investment rate from 19 percent currently, to 30 percent. Nineteen percent will buy you a two-and-a-half to three percent long-term growth rate. Thirty percent can get you to five or six percent or even more, but how do you fund it? You won’t do it unless you get your savings rate up to a similar order. If you don’t that, the macroeconomic mismatch will get wider, our credit ratings will continue to go down, we’ll become more fragile – the most fragile in the fragile five -, and that’s the critical thing: to get the savings rate up, to actually fund the investment rate. That’s critical. I don’t care what political party it is. Anything else is a magic wand.

ALEC HOGG: It sounds, from what Chris has said now – well, unpacking this – that this really is a lot of politics, but what about this mantra: the National Development Plan? It’s almost ‘well, abdicate responsibility for everything because it’s in the National Development Plan’. Is it being implemented, and is it being implemented in its entirety?

ROWAN WILLIAMS: Yes, they’ve been talking about the plan for the last five years. Certainly, for the first part of Zuma’s term and the second part. What we are seeing is an increase in terms of its profile in terms of some of the government commentary, so I think it gives you some optimism that they will now be following through with it. I think to date it has been a plan and is a plan. Some of the aspects in terms of Medupi and the big power plants…I think they were part of the National Development Plan, so they would argue that although they’re not complete, they have started some implementation.

ALEC HOGG: But if we implement as poorly in other areas of the plan as we’ve done – and Medupi is a great example – then my goodness, this 2030 deadline that we’re looking at Chris Hart, might be, maybe in 2060.

CHRIS HART: The National Development Bill failed on one ground. There are two aspects. There’s the economic ground and there’s a social ground. If they tried to lead the National Development Plan with the social side, you won’t have the resources to pay for the social side. It has to be led by the economic side.

ALEC HOGG: Is there a realisation of that?

CHRIS HART: I don’t think so, because the loony left. Remember, this National Development Plan: if you put it into a European context, is a social democrat plan. It’s a centre-left plan. Economics in South Africa is discussed between the centre-left and the loony-left. Fortunately, with the loony-left exiting the government, the government can actually start shifting more to the centre, but that’s part of our problem in the last five years. There hasn’t been a single bit of legislation that has been investment of business-friendly. It’s all been anti-business and anti-investment, which is why we with the problem here.

ALEC HOGG: And then we saw in the State of the Nation Address where President Zuma talks to business. ‘Come, we have to pull together in the same way’. I suppose that if you beat your dog for long enough, one day he’s going to bite you.

ROWAN WILLIAMS: I think government is missing a major opportunity. If you look at the private sector and the business sector, there’s a deep well of skills there. If you look at the success I’ve had not only in South Africa, but on the global stage as well, I think the government could do very well to tap those resources and that skill set, because that’s one of the things we lack – and clearly, the government also lacks – is that ability to deliver.

ALEC HOGG: Business plays nice. Business plays too nice maybe, and then quietly takes its business elsewhere.

ROWAN WILLIAMS: We have seen business voting [unclear 0:16:18.5] and then taking its skills offshore, as you say. That is, I think, a lost opportunity for South Africa.

ALEC HOGG: Yes, but this is really frustrating. A last word from you, Mr Hart.

ROWAN WILLIAMS: That’s a myth. South African business has been leading investment in this country for the last 20/30 years. Two-thirds of all investment that takes place in South Africa, is private sector that you can get out of the Reserve Bank Bulletin for nothing. The government thinks they’re the leading investor. They’re the ones who led us to electricity shortage and rail shortage etcetera because the private sector investment overtook their lack of investment.

ALEC HOGG: Fascinating insights. Thank you for once again being so diplomatic, Chris Hart and Rowan. It’s good to have you in the studio for giving us the investment side. Chris is the Chief Strategist at Investment Solutions and Rowan Williams is the Director at Nitrogen Fund Managers. There were also snippets from an interview that Bruce Whitfield did with the Finance Minister, Nhlanhla Nene.

 

Follow by Email
Facebook
Twitter
YouTube
LinkedIn