Rich with renewable energy resources and yet plagued with inconsistent power supply, the South African government has devised an urgent five-step action plan to address the ongoing energy crisis.
Improving Power Station Performance
With delayed maintenance and unplanned outages at power stations countrywide as well as extensive theft, fraud and sabotage continuing to disrupt supply, H.E. President Cyril Ramaphosa announced that the government is “fixing Eskom and improving the performance of the existing fleet of power stations.”
It has been decided that over the next 12 months, Eskom will increase the budget allocated for critical maintenance to increase the reliability of its generation capacity.”
Additionally, the utility will be recruiting skilled personnel that will help to ensure world-class operation and maintenance procedures while the South African Police Service has set up a special law enforcement team to help Eskom confront crime and corruption.
Accelerating New Generation Capacity Procurement
Meanwhile, in addition to improving power station performance, H.E. President Ramaphosa announced that “Eskom will take additional actions to add new generation capacity to the grid on an urgent basis.” This will be done via surplus capacity bought from existing independent power producers such as mines, paper mills, shopping centers and other private entities, as well as through increased imports from neighboring countries including Botswana and Zambia via the Southern African Power Pool. What’s more, “Eskom will be constructing its first solar and battery storage projects at Komati, Majuba, Lethabo and several other power stations. This will result in over 500 MW being added to the system.”
Increasing Private Investment
Addressing the electricity crisis will require significant levels of new capacity to be brought online, with the private sector playing a key role in this regard. Accordingly, the government is prioritizing the procurement of new capacity through renewables, ensuring projects from Bid Window Five of the Renewable Energy Independent Power Producer Procurement program are constructed as per schedule and increasing the amount of new generation capacity for Bid Window Six from 2,600 MW to 5,200 MW.
Additionally, the government has removed the licensing threshold for embedded power generation, accelerating private sector participation and incentivizing renewable adoption countrywide; will be tabling special legislation in Parliament on an expedited basis to address legal and regulatory obstacles to new generation capacity; and has established a single point of entry for all energy project applications to ensure coordination and fast-tracked approval processes.
Incentivizing Commercial and Residential Solar Adoption
H.E. President Ramaphosa has also stated that the government “intends to enable businesses and households to invest in rooftop solar.” Owing to the significant potential for both commercial and residential solar adoption, Eskom has developed rules and a pricing structure (feed-in-tariffs) to introduce such connections to the network. This way, households and businesses will be able to install their own solar panels, selling surplus energy to Eskom via the national grid itself.
Transforming the Electricity Sector
Finally, the government is focused on transforming the South African electricity sector, ensuring a more sustainable future. At the forefront of this transformation will be the restructuring of Eskom, whereby the entity will be split into three separate entities – a generation entity, transmission entity and a distribution entity. To date, only the transmission entity has been established, with the following two expected to be formed by the end of 2022. Additionally, broader reforms are anticipated with the finalization of the Electricity Regulation Amendment Bill.
