South African President H.E. Cyril Ramaphosa has announced a five-step action plan centered around addressing the country’s ongoing electricity crisis, of which a notable feature includes the removal of the licensing threshold for embedded power generation.
Following years of unstable grid networks, inconsistent supply and regular load shedding, the plan aims to urgently improve power generation, transmission and distribution, while incentivizing private sector participation across the power industry.
“The measures, together with the steps we have already taken, will hasten the end of load shedding,” stated H.E. Cyril Ramaphosa, adding that, “They will put our country on a clear path towards reliable, affordable and sustainable electricity supply. If we work together, if we hold each other to account, if we meet our deadlines and fulfil our commitments, we will end the energy crisis and create the conditions for growth and job creation.”
According to the President, the government will look at improving the performance of state-owned Eskom’s existing fleet of power stations; accelerate the procurement of new electricity generation capacity; massively increase private investment in generation capacity; significantly improve project take-off, development and supply; enable businesses and households to invest in rooftop solar and fundamentally transform the electricity sector, positioning it for future sustainability.
Over the next 12 months, Eskom will increase the budget allocated for critical maintenance to increase the reliability of its generation capacity; as an immediate measure, surplus capacity will be bought from existing independent power producers and generators; Eskom will increase power imports via the Southern African Power Pool; and the country will utilize climate funding to invest in the grid and repurpose power stations.
What’s more, relevant parties are working to ensure projects from Bid Window 5 of the Renewable Energy Independent Power Producer program are constructed per schedule; capacity procured through Bid Window 6 for wind and solar has been doubled from 2,600 MW to 5,200 MW; the government has removed the licensing threshold for embedded power generation entirely; introducing rules and a feed-in tariff for commercial and residential solar deployment; and finally, Eskom will be restructured into three entities, with its generation and distribution business now on track to separate by the end of the year, the transmission company having already been established.
Despite installed capacity sitting at 46,000 MW, only 60% of this capacity is available at any given time, leading to a shortfall of approximately 6,000 MW. Through the action plan, the government has prioritized increasing generation capacity in 2022 and beyond, aiming to achieve long-term security and end load shedding for good.