President Cyril Ramaphosa. Picture: GCIS
In the days leading up to President Cyril Ramaphosa’s 2021 State of the Nation (Sona) address, South Africa experienced yet another bout of controlled black outs and load shedding.
This as the economy tries to recover from the hard and soft lockdowns imposed by the Covid-19 pandemic.
Part of South Africa’s economic recovery plan, Ramaphosa said, is to rapidly expand the country’s energy generation capacity.
As such the work done at the state-owned power utility Eskom to create three separate entities for generation, transmission and distribution “will lay the foundations for an efficient, modern and competitive energy system”.
He reported that Eskom was making “substantial progress” with intensive maintenance and “operational excellence programmes” to improve the reliability of its coal fleet.
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“We are working closely with Eskom on proposals to improve its financial position, manage its debt and reduce its dependence on the fiscus,” Ramaphosa said.
“This requires a review of the tariff path to ensure that it reflects all reasonable costs and measures to resolve the problem of municipal debt.”
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In December 2020, the Eskom Social Compact was signed, kickstarting what actions are needed to be taken for it to meet the needs of the country both now and in the future.
Ramaphosa said the Department of Mineral Resources and Energy will soon announce the successful bids for 2,000 megawatts of emergency power.
There are also regulations being put into place for municipalities to diversify their energy sources by buying power from independent power producers.
There will also be an additional 11,800 megawatts of power, due to come from renewable energy, natural gas, battery storage and coal, in line with the country’s 2019 Integrated Resource Plan (IRP).
However, he said that Eskom will still fall short of between 4,000 and 6,000 megawatts of power over the next five years while older coal-fired power plants reach the end of their life.
READ MORE: Load shedding ‘likely’ until December, says Eskom
Proposals for an additional 2,600 megawatts from wind and solar energy will come on board soon to address this shortfall.
Easing the licensing for new energy generation projects could also see this shortfall bolstered by an additional 5,000 megawatts, which Ramaphosa said, would help ease the impact of load shedding.
Within the next three months, Schedule 2 of the Electricity Regulation Act will see an increase in the licensing threshold for embedded generation, he added.
The increase in renewable energy forms part of the country’s commitment to the Paris Agreement, which includes reducing greenhouse gas emissions caused by fossil fuels such as coal.
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“Eskom, our largest greenhouse gas emitter, has committed in principle to net zero emissions by 2050 and to increase its renewable capacity.
“Eskom will be looking to partner with investors to repurpose and repower part of its coal fleet.”
He said reforms to include more diverse energy portfolio is needed to for new investments, a competitive market in the energy space, and to allow for new participants to enter the market.
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