President Cyril Ramaphosa has put renewables at the core of government’s plans to end load-shedding.
Yesterday, Ramaphosa addressed the nation on actions to address the country’s electricity crisis.
This, as embattled power utility Eskom, which provides the majority of South Africa’s power needs, has over the years struggled to maintain a steady power supply, thereby putting the economy at risk.
Said Ramaphosa: “During the past three weeks, severe load-shedding has disrupted all of our lives and caused immense damage to our economy.
“The daily power cuts we have been experiencing have inconvenienced millions of households and have presented huge challenges for businesses. After more than a decade without a reliable electricity supply, South Africans are justifiably frustrated and angry. They are fed up.
“We have therefore developed a set of actions to respond to the crisis.”
The president said one of the first steps government took to address the electricity shortfall was to revive the renewable energy procurement programme in 2018.
According to Ramaphosa, since then, over 2 000MW of solar and wind power has been connected to the grid through Bid Window 4 of the programme.
A further 2 600MW of capacity has been procured through Bid Window 5, which will begin to add capacity from early 2024, he added.
“We have started to diversify generation by allowing parties other than Eskom to generate electricity. In June last year, we raised the licensing threshold for new embedded generation projects from 1MW to 100MW.”
This removed the licensing requirement for generation projects up to 100MW that are connected to the grid.
Ramaphosa pointed out this measure enabled these generators to have the ability to sell electricity to one or more customers, such as factories, mines or data centres.
“We also changed the regulations to allow municipalities to procure power independently. A number of municipalities are already in the process of doing so.”
Purchasing additional power
He noted Eskom recently made land available next to its power stations in Mpumalanga for renewable energy projects, which will unlock 1 800MW of new capacity.
Eskom recently said it has identified additional land that will be released for this purpose.
As part of addressing the shortage of megawatts, Eskom will now also purchase additional energy from existing private generators, such as mines, paper mills, shopping centres and other private entities that have surplus power, the president said.
He added that a number of our neighbouring countries in Southern Africa, such as Botswana and Zambia, have more electricity capacity than they require, and Eskom will now import power from these countries through the Southern African Power Pool arrangement.
Eskom will also use interim power solutions, such as mobile generators, to supplement current generation capacity for a limited period.
It will implement a programme that encourages efficient-energy use by consumers to reduce demand at peak times, Ramaphosa said.
“We have spoken in the past about Eskom’s huge debt, which stands at close to R400 billion. The debt continues to be a huge burden on Eskom’s ability to address its many challenges. The National Treasury is working to finalise a sustainable solution to Eskom’s debt.”
According to the president, the minister of finance will outline how government will deal with this matter in an effective manner when he presents the Medium-Term Budget Policy Statement in October.
“We will use climate funding provided through the Just Energy Transition Partnership to invest in the grid and repurpose power stations that have reached the end of their lives.”
He also stated Eskom will be constructing its first solar and battery storage projects at Komati, Majuba, Lethabo and several other power stations. These will result in over 500MW being added to the system.
“There can be no longer any excuses. These steps will allow us to limit load-shedding to lower stages and reduce the risk of such severe load-shedding in future. To end load-shedding, however, we need to urgently add much, much more capacity to the grid.
“Our second priority is, therefore, to accelerate the procurement of new capacity from renewables, gas and battery storage. The relevant government departments are working together to ensure all projects from Bid Window 5 of the renewable energy programme can start construction on schedule.”
This includes taking a pragmatic approach to the local content requirements for these projects, prioritising the need to build new capacity as quickly as possible, said the president.
Doubling up capacity
He also stressed the amount of new generation capacity procured through Bid Window 6 for wind and solar power will be doubled from 2 600MW to 5 200MW.
“We will release a request for proposals for battery storage by September this year, and a further request for gas power as soon as possible thereafter.”
To ensure effective planning, Ramaphosa noted the country’s Integrated Resource Plan is being reviewed to reflect the need for additional generation capacity and climate commitments.
He pointed out SA is accelerating greater private investment in generation capacity.
“Last year, we announced the raising of the licensing threshold to 100MW. This move was widely welcomed. It has unlocked a pipeline of more than 80 confirmed private sector projects with a combined capacity of over 6 000MW.
“We are already working together with industry to accelerate the most advanced projects, several of which are already entering construction. These changes have fundamentally changed the generation landscape.”
Following the success of this reform and the enthusiasm shown by the private sector, he said the country will remove the licensing threshold for embedded generation completely.
“This will enable private investment in electricity generation to rise to higher levels.”
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