Home Opinion and Features Ramaphosa commends Energy Action Plan as saving SA from worst-case scenario

Ramaphosa commends Energy Action Plan as saving SA from worst-case scenario

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President Cyril Ramaphosa said that although load shedding had continued, the government had managed to avert a worst-case scenario by stabilising the performance of Eskom’s power stations and reducing demand.

President Cyril Ramaphosa. File picture: Phando Jikelo, African News Agency (ANA)

PRESIDENT Cyril Ramaphosa has commended the “sustained improvement” shown by Eskom’s generation fleet, a year after the government launched the Energy Action Plan to resolve the load shedding crisis.

In his weekly newsletter, Ramaphosa said on Monday that although load shedding had continued, the government had managed to avert a worst-case scenario by stabilising the performance of Eskom’s power stations and reducing demand.

Ramaphosa said Eskom’s generation fleet had continued to show sustained improvement as unplanned losses had been reduced to less than 16,000MW in the last two months, down from more than 18,000MW previously.

He said planned maintenance had been reduced during the winter period, with Eskom having undertaken significant maintenance in the months preceding winter.

“Since the launch of the Energy Action Plan, we have worked to add as much power as possible to the grid,” Ramaphosa said.

“Eskom has unlocked close to 400MW from companies with extra available capacity, and a further 600MW is currently in the contracting process. We have sourced an additional 400MW from Cahora Bassa in Mozambique.

“We are fast-tracking the procurement of new generation capacity from renewables, gas and battery storage.

“Later this year, the first three projects from the emergency power programme are expected to connect to the grid. Also later this year, around 2,300MW from the most recent bid windows of the renewable energy independent power producer programme should be in construction.”

Ramaphosa also hailed the regulatory changes aimed to boost private investment in new generation capacity which have enabled private investment in electricity generation, with a pipeline of more than 10,000 MW of new capacity that will begin to connect to the grid later this year.

He said the government was also implementing fundamental reforms to create a competitive electricity market and an independent national grid operator to ensure that the country never experiences power shortages again.

The recent update to the Energy Action Plan notes new legislation has been tabled in Parliament to create a competitive market for electricity – the Electricity Regulation Amendment Bill.

Among others, this will allow consumers to choose which energy supplier they want to buy power from and enable competition and efficiency from multiple electricity generators.

The Energy Action Plan has also seen the amount of rooftop solar capacity doubling and increasing to more than 4,000MW, helping to reduce load shedding over the winter months.

The Minister of Electricity has said the “single point of entry” was planned to quicken connection to the grid with regulatory approval currently “all over the place” at different government departments.

Also, the National Electricity Regulator of South Africa (Nersa) last week approved the operating licence of one of the three companies Eskom will be unbundled into, the National Transmission Company of South Africa (NTC).

Investec chief economist Annabel Bishop, however, said while load shedding had proved less severe in July and parts of June than expected, a meaningful number of renewable energy projects had been hampered by a sharp rise in interest rates, which had added noticeably to operating costs.

“The competition for renewable energy project approvals has seen high competition, resulting in reportedly thin margins, meaning that tariff pricing sometimes turned out to be unsustainable. SA’s repo rate has more than doubled since 2021 to 8.25% from 3.50%,” Bishop said.

“The prime lending interest rate rose to 11.75% from 7.00% over the same period. The reported narrowness of the margins on the renewable energy projects meant many were unable to absorb the jump in borrowing costs and other shocks.”

Meanwhile, the National Union of Mineworkers (NUM) on Monday reiterated its stance that a procedurally fair process of Just Energy Transition should embrace all stakeholders in the value chain.

NUM deputy general secretary Mpho Phakedi said they were engaged with various unions across the world to understand how they were dealing with their coal power stations to address the issues of the energy transition and the challenges of climate change.

“We are noting with concern the amount of pressure for South Africa to end and close down power stations,” Phakedi said.

“We want to put it categorically clear that no amount of pressure or manipulation will shift our position with regard to the future of coal mining and affected communities.”

– BUSINESS REPORT

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