The South African President, Cyril Ramaphosa has revealed that his administration has allowed the private sector to invest in electricity which resulted to 100 projects now at various stages of development, representing 10 000 MW of new generation capacity and R200 billion of investment.
Ramaphosa who made this known during the Presidency Budget Vote at the Parliament on Wednesday added that this vote is on the understanding of all share a responsibility to build a new nation, to serve the people of South Africa and to improve the lives of every South African leaving no one behind.
According to him, “Over the last few months, we have been having engagements with representatives of business, labour and other constituencies, where we have been dealing with the collective actions that need to be taken to address the various challenges that constrain our economic growth.
“This will enable us to focus on key issues, which pose an immediate threat to the economy. We have established three work streams between government and business focusing on energy, logistics, and crime and corruption.
“This will enable joint action, alongside other social partners, on these critical challenges. Our overriding priority now is to end load shedding and achieve energy security. In July last year, I announced a detailed plan to address the energy crisis.
“I have since established the National Energy Crisis Committee to ensure that this plan is fully implemented, and appointed a dedicated Minister in the Presidency to provide a single point of execution for the energy crisis response.
“Over the past nine months, we have made progress in implementing the measures that we outlined in the Energy Action Plan. First, in line with our economic reforms in network industries, we have allowed the private sector to invest in electricity generation projects of any size”.
He stressed that the exponential growth of private sector investment in electricity generation is proof that this reform is having a major impact. These investments will significantly close the shortfall in electricity supply.
Ramaphosa said, “What has been pleasing in this regard is that this reform process has attracted a variety of investors in the form of women-led businesses, black investors, local traditional investors as well as foreign investors from as far afield as China, the Middle East, United States, Canada, India, Turkey and Europe”.
the President pointed out that a province such as the Northern Cape has attracted no less than R100 billion in investments in renewable energy and is seeing exponential economic growth in the province with the resultant creation of jobs.
“Second, we have accelerated the procurement of new generation capacity. Three projects from the risk mitigation programme have entered construction, with a further five projects expected to reach financial close during this quarter.
“Project agreements have been signed for 25 preferred bidders from Bid Window 5 and 6 amounting to approximately 2800 MW, of which 784 MW is already in construction.
He further revealed that in the coming months, his administration will initiate the procurement of more than 10,000 MW of additional generation capacity from wind, solar, gas and battery storage, which will further contribute to closing the shortfall in energy supply.
“Third, we have enabled municipalities to procure power independently. Since we implemented this reform, a number of municipalities have embarked on processes to procure additional power of up to 1,500 MW.
“Fourth, we are driving progress on the unbundling of Eskom into separate entities for generation, transmission and distribution. Significant progress has been made towards the establishment of the National Transmission Company of South Africa as an independent subsidiary of Eskom”.
The President asked the Minister of Public Enterprises to ensure that an independent board is appointed for the new transmission company by the end of June 2023, so that it can be fully operational as soon as possible.
At the same time, he said his administration is making progress in decisively addressing Eskom’s debt burden. “The 2023 Budget introduced R254 billion in debt relief to Eskom, subject to strict conditions.
“This will relieve pressure on the utility’s balance sheet, enabling it to conduct necessary maintenance and supporting the restructuring of the electricity market. Finally, we are pursuing sweeping legislative reform to end the energy crisis once and for all, with the help of this house.
Ramaphosa stressed further that his administration have already introduced the Electricity Regulation Amendment Bill, which seeks to establish a competitive electricity market and support the unbundling of Eskom.
He said “This will fundamentally transform the electricity sector, as we know it, and will create a level playing field for multiple generators to participate in producing the energy that we need”.
Also, very soon the President said his administration will introduce another key piece of legislation, the Energy Security Bill, to streamline regulatory framework and accelerate the construction of renewable energy projects.
While called on the Members of this House, from all political parties, to pass this critical legislation in record time, while adhering to required Parliamentary processes. “We need to do so in months, not years. At a moment of grave crisis, we must pull together and place the interests of the people of South Africa above all else.
“We can all make a difference by switching off lights and appliances when not in use, reducing the temperature setting geysers to 60 degrees, installing a geyser blanket or geyser timer to save energy and reduce your electricity bill, and turn off unnecessary equipment like pool pumps.
“By taking these simple actions we can reduce demand by up to 1 000 MW, or one full stage of load shedding. We must reiterate that the risk of a national blackout remains extremely low. There are many safeguards in place to prevent such an incident from occurring. Load shedding allows Eskom to keep the system in balance at all times”.