The national energy crisis committee, set up about six months ago to push through a plan to end power cuts, aims to significantly cut red tape, a senior official in the presidency has said.
Bureaucracy can hold up the construction of renewable energy generation projects by up to 1,000 days.
“When we went through our own analysis, we discovered it could take up to 1,000 days for somebody to fully go through the permitting process before they start constructing a new plant,” said Phindile Baleni, the head of the committee and the director-general in President Cyril Ramaphosa’s office.
After initial work to optimise permitting, one independent power producer managed in 2022 to navigate the process in just six months.
It is too early to commit to the six-month timeline, said Baleni, because this application may have been an outlier. “We first have to see if we can replicate it and do it a few times.”
Her comments to Business Day came as the rollout of critically needed new electricity generation faces headwinds. These include the failure of bid window 6 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) because of the shortage of power lines.
The programme is one of the cornerstones of the response plan announced alongside the establishment of the national energy crisis committee by Ramaphosa.
The president told ANC delegates last week that SA’s energy transition must be “just and inclusive” and that it must be executed at a pace “in concert with the developmental needs of our country”.
The committee — which is made up of the minister in the presidency and ministers of mineral resources & energy; public enterprises; finance; trade, industry & competition; and forestry, fisheries & the environment — has made some progress on “fixing Eskom”.
Baleni, who stressed the importance of crucial processes such as public consultations, said the committee is aware that the “quickest way to get megawatts on grid” is “to fix Eskom’s plant performance”.
The committee has one workstream dedicated to sorting out power plant performance. It has been able to pull in a group of 12 industry veterans who previously worked at Eskom and are now volunteering their time to serve as mentors for new station managers.
“Most of the station managers are young. They have come through the ranks but they came as engineers, and they are now managing — management is a whole different story.”
Another workstream includes law enforcement bodies working with Eskom to tackle problems such as criminal syndicates operating within Eskom and its supply chains.
One option the committee is considering is the establishment of a special court to prosecute these crimes. Criminals, Baleni said, have held parts of Eskom ransom, making it impossible for the utility to move forward.
“We are focused on getting the private sector to invest [in generation],” Baleni said.
This, she added, signals a change in attitude for the government, which has previously viewed private participation in the energy sector from the vantage point of having an energy surplus in the country.
In the early 2000s, the country had surplus electricity, which meant there were many hurdles and regulations that made it hard for private sector investment in energy generation. But given the current electricity shortage, the government is now “doing the opposite and opening the floodgates” by “accelerating the process of bringing in new capacity from renewables”.
Disappointment
The renewable energy industry was disappointed to learn last year that out of 6,800MW of renewable energy that should have been procured through bid windows 5 and 6 of the REIPPPP, about 50% had not yet been concluded or awarded.
Only 1,760MW has been contracted to proceed to building and another 1,700MW has been awarded preferred bidder status but has yet to close.
This means that 3,340MW remains either not contracted or not awarded.
The greatest disappointment for the industry was the decision announced by the department of mineral resources & energy in December to award no winning bids for the 3,200MW of wind power that was set to be procured through bid window 6.
According to the department, bid responses for the wind energy component were located in the Eastern Cape and Western Cape supply areas, where Eskom has no grid capacity available to connect any of the proposed projects.
After the announcement Niveshen Govender, CEO of the SA Wind Energy Association (Sawea), said he was not convinced by the reasons given for not awarding bids to any new wind projects. The recently published Generation Connection Capacity Assessment clearly indicated grid availability in the provinces where wind projects were developed for public procurement, he said.
Despite those hurdles faced in the rollout of the REIPPPP, the wind and solar power industry associations told Business Day the government had been able to achieve “definite improvements” in the processing of regulatory requirements for new renewable generation projects.
Santosh Sookgrim, senior technical adviser at Sawea, said the industry had seen many improvements in the regulatory space in the past 10 years.
“There are still challenges, but what is heartening is that they are different challenges to those we faced 10 years ago, and this shows progress. We believe that the grid constraints are the biggest challenge facing the sector and should be prioritised for intervention,” Sookgrim said.
Bureaucracy
He added that while they are encouraged by policy developments and changes, there is still much space for improvement in the implementation of policy and the bureaucracy around the processes.
“We need predictable, consistent and continuous public procurement, clear and shortened registration processes for private offtake projects, and clear guidelines on various permits and applications.”
Rethabile Melamu, CEO of the SA Photovoltaic Industry Association, said while there has been a streamlining of environmental approval processes as well as the registration for private projects with the National Energy Regulator of SA, the addition of technical and forecasting requirements in the REIPPPP bidding process has made it more complex.
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