A large part of the “action plan to end load-shedding” as announced by President Cyril Ramaphosa on Monday night rests on fixing the struggling state-owned power utility and on expanding and fast-tracking the state’s own renewable energy procurement processes.
To address the current crisis — which led to SA, over the last month, experiencing the deepest power cuts, run over the longest continuous period yet — Ramaphosa said that the immediate focus would be “fixing Eskom and improving the performance of the existing fleet of power stations”.
Ramaphosa said that out of 46,000MW of installed generation capacity, only about 60% (about 28,000MW) was available at any one time due to planned outages, for maintenance, and unplanned outages due to breakdowns.
This was not sufficient to meet peak demand of about 32,000MW.
Apart from “fixing Eskom”, the strategy announced by Ramaphosa also called for faster procurement by the state of renewable energy, gas and battery storage by, for example, “maximising” the capacity of wind and solar that can be procured through bid window 6 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
Bid window 6 was initially set to produce 2,600MW of new generation capacity but Ramaphosa said this would be doubled to 5,200MW.
The government would also release a request for proposals for battery storage by September this year, and a further request for gas power “as soon as possible thereafter”.
In addition, the minister of mineral resources & energy will issue a determination for the remaining allocations in the Integrated Resource Plan (IRP) 2019. So far, in terms of delivering in the IRP 2019, the department has issued procurement notices for only about a quarter of the total envisaged new generation capacity, including about 6,800MW of renewables.
Ramaphosa also announced that the licensing threshold for independent power producers, which was raised from 1MW to 100MW last year, will be removed completely. “While [private investors] may not require licences, all new generation projects will still have to register with the regulator and comply with technical requirements for grid connection and environmental legislation.”
More new interventions announced by Ramaphosa included increasing Eskom’s budget allocated to critical maintenance. The government will also cut red tape that has made it difficult for Eskom to purchase the spares and equipment needed to perform maintenance and repairs.
To address the shortage of skilled personnel, Eskom will recruit former plant managers and engineers from the private sector.
The utility will undertake additional actions “to add more megawatts to the grid” by purchasing surplus capacity from independent power producers. Eskom will purchase additional energy from existing private generators such as mines and from neighbouring countries.
Ramaphosa said that National Treasury would outline a “sustainable solution” to Eskom’s almost R400bn debt burden during the medium-term budget policy statement later this year.
In line with the suggestions that had been made by the Presidential Planning Commission, the DA and Business Unity SA to scrap or temporarily suspend local content requirements for new renewable energy projects, Ramaphosa announced that the state would adopt a “pragmatic approach” to these requirements for projects under bid window 5 of the REIPPPP.
An additional measure will be to streamline the regulatory requirements for energy projects. Ramaphosa said government would “waive or streamline certain regulatory requirements where it is possible to do so within existing legislation” including reducing the regulatory requirements for solar projects in areas of low and medium environmental sensitivity.
Already, last week forestry, fisheries & environment minister Barbara Creecy announced initiatives aimed at streamlining the environmental assessment process for renewable energy projects in SA that will exempt developers from obtaining environmental authorisation for certain listed or specified activities for the development of solar facilities. This, according to a statement published by the department, will reduce timeframes to receive the necessary approvals from, in some cases, 300 days to about 60 days from inception of the project.
To ensure that these measures are implemented “in a co-ordinated manner”, the president announced the establishment of a National Energy Crisis Committee that will be chaired by the director-general in the presidency.
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