Following commitments made in the State of the Nation Address in February, the government has now gazetted ministerial determinations that will enable the development of more than 11,800 megawatts (MW) of additional power generation.

“To give a sense of the scale of this development, South Africa currently has in the region of over 30,000 MW of electricity available on the national grid each day,” President Cyril Ramaphosa said in a statement on Monday (28/09/2020).

This signals government’s clear intention to move ahead with one of the key reforms that is needed to unlock the growth of the economy and attract much-needed investment, he said.

“This new energy will be procured from diverse sources, including solar, wind, gas, coal and storage. While meeting our energy needs well into the future, this new capacity will also help us meet our international obligations to reduce carbon emissions.

“This electricity will be procured through a transparent tendering process that prioritises competitiveness and cost-effectiveness,” Ramaphosa said,

Most importantly at a time when energy supply is severely constrained, new generation projects that can be connected to the grid as soon as possible will be prioritised, he said.

“The next step, which will be following soon, is to initiate various procurement bidding windows including opening Bid Window 5 of the renewable energy independent power producer programme.

“This is in addition to the 2,000 MW of emergency power that is being urgently sought through the Risk Mitigation Procurement Programme to meet the country’s current energy shortfall.”

Removing restrictions

In an effort to facilitate electricity self-generation and as part of the reform process, Ramaphosa said that government have removed the licensing requirement for self-generation projects under 1 MW.

So far 156 self-generation facilities under 1 MW have been registered, with a total installed capacity of 72 MW, he said.

“For facilities that can generate above 1 megawatt, the National Energy Regulator of South Africa is improving its licensing processes to improve turnaround time.

“So far, five such facilities, with total installed capacity of 25 megawatts, have been licenced. Further work is being undertaken to reform the regulatory environment to ensure that we make fuller use of the great potential in this country for self-generation among commercial and industrial users.”

“As part of regulatory reforms, draft amendments to regulations that would enable municipalities in good standing to procure their own power from independent power producers will soon be gazetted.”

Eskom and load shedding

The president said that government is working to restore Eskom’s operational capabilities and restructure the power utility to fundamentally change the way in which the government generates and transmits electricity in the country.

“Our vision is to lead South Africa though a just transition which ensures that as many people as possible benefit from the investment, growth and job-creation that we can achieve through expanding our electricity generation capacity,” he said.

Ramaphosa said that government is making progress in overcoming the challenges that Eskom has been facing over a number of years.

“As part of the necessary restructuring process, separate governance structures in the form of boards have been appointed for the power utility’s generation, transmission and distribution divisions, as we announced at the State of the Nation Address.

“Improvements are continuing in municipal debt collection. Despite recent challenges we have faced with load shedding, maintenance work is continuing at power stations.”

The president said that concerns that have been raised about energy policy uncertainty are being addressed on an ongoing basis through the reform process that is at the centre of our national economic recovery effort.

“The progress we are making in the area of energy policy reform isn’t just critical to fixing the current power supply crisis. It will begin to reduce the impact of electricity interruptions on businesses.

“It will create investment possibilities – and upstream and downstream industrialisation opportunities – as we build new generation capacity and expand the electricity grid in the years ahead,” he said.