President Cyril Ramaphosa has used his weekly letter to the nation on Monday (25 April) to outline the government’s plan to end load shedding in South Africa.
The country experienced stage 4 load shedding for much of last week as state power utility Eskom battled to meet rising electricity demand amid breakdowns at its power stations.
“Load shedding costs our economy dearly. It causes great frustration among all South Africans and creates hardship for households and businesses,” Ramaphosa wrote.
“A stable and reliable supply of electricity is essential for almost every aspect of our daily lives and a necessary condition for economic growth. That is why we are focused on achieving energy security as one of our foremost priorities.”
Policy missteps and state capture
The President said the root causes of the current energy crisis lie in “policy missteps,” especially a delay in commissioning new generation capacity about two decades ago, and state capture.
He added that the new power stations, Medupi and Kusile, have been beset by delays, cost overruns and design defects – “with many of these challenges linked to allegations of corruption.”
Other reasons he cited include lack of maintenance of existing power stations in the past, lack of technical skills needed to operate and maintain power plants, Eskom’s debt burden, and “billions of rand [being] diverted from critical operational requirements at Eskom into private pockets” through state capture.
Ramaphosa urged South Africans to support Eskom’s board, management and employees as they work towards ending load shedding. “It may be difficult to imagine a future without load shedding, but the steps we are taking now will ensure that we get there,” he added.
How government will end load shedding
The President outlined several policies the government is implementing to bring in new electricity capacity and end load shedding. These include:
In 2018, the government revived the Renewable Energy Independent Power Producers Procurement Programme (REIPPP) that had been stalled since 2015. As a result, much of 2,205MW from Bid Window 4 has now been connected to the grid.
“A further 5,200MW of solar and wind power is being procured through Bid Windows 5 and 6. This additional generation capacity is due to connect to the grid from late 2023. The Integrated Resource Plan 2019 provides for a further 3,000MW of gas and 500 MW of battery storage to be procured from independent power producers,” Ramaphosa explained.
100MW licensing threshold
The government the licensing threshold for new generation projects from 1MW to 100MW in 2021. “This means that private investors do not require a license to build generation facilities up to this size and can produce their own power or sell it across the grid to other buyers,” the President said.
He further revealed that construction of 58 such projects – with a combined capacity of 4,500MW – will start later this year.
Draft Electricity Regulation Amendment Bill
The government published the draft Electricity Regulation Amendment Bill in February this year for public comment. “The Bill provides for the establishment of an independent transmission and system operator,” Ramaphosa said.
“This means that while the national grid will remain owned and controlled by the state, there will be competition among multiple generators selling power to distributors and customers. The introduction of a competitive electricity market will unleash new investment in generation capacity and will be a key driver of economic growth.”
The President concluded that while it is difficult to convince South Africans to remain patient amid load shedding, “the reality is that the energy landscape is being transformed, the problems at Eskom are steadily being addressed and substantial new energy generation capacity is being built.”