EDITORIAL: Ramaphosa must make promising power plan happen

The energy action plan, which President Cyril Ramaphosa has at last unveiled, has been widely praised and welcomed, so it may be churlish to point out how many of its ingredients have been on the table for some time now.

If they sound familiar that is a good thing, to the extent that it reflects that the president has listened to the calls from business and energy experts — and Eskom itself — and incorporated their proposals into his plan. The risk is that this is by no means the first plan, nor is the national energy crisis committee he plans to appoint the first such committee. The crucial missing ingredient is, therefore, a clear plan of who will implement it and by when. “A clear execution plan, set against hard deadlines and accountability for delivery,” in the words of Business Unity SA.

Until we see that it will be hard to tell whether the president and his colleagues will indeed bring the laser focus and decisiveness we were promised on Monday night.

There can be no doubt, however, that if this plan is implemented with the necessary urgency, it will transform SA’s electricity industry. Over time it should even end load-shedding. And it will attract significant private investment to the economy, not only directly into new electricity infrastructure, but also indirectly into projects that will become viable if SA can deal with its power crisis.

Ramaphosa made some bold new announcements that stand to make a real difference to new generation capacity in the medium term. The complete lifting of the licensing requirement for embedded private generators was one; the expansion of the bid window for renewable energy projects another. So, too, were plans to incentivise businesses and households to install their own small-scale systems, which could feed into the grid. And the promise to focus on removing the rules and red tape blocking new generators from coming online was perhaps the most encouraging signal of all.

Whether the president has the full support of his ministers and senior officials is the big question. It is why it will be so important to detail deadlines and responsibilities so that those who are meant to deliver can be held to account.

The upside could be very material —  the Minerals Council SA points out that mining alone has a pipeline of 73 projects from 24 mining companies that cumulatively would generate R65bn of investment and bring 5,100MW onto the grid — but so far the bureaucracy has registered just 295MW.

In the short term, the most important action the government can take to deal with the load-shedding crisis is to ensure Eskom itself can be fixed. The president’s recognition of that is welcome, as is the detailed sense of what the personnel and procurement obstacles are, and the plans to remove them.

In the longer term, however, if this plan is implemented to its full extent, SA would radically reduce its dependence on Eskom over time and would move from a state-controlled industry to something closer to a power market that would attract extensive private sector capital and expertise into the sector. That can only be to SA’s benefit. We will have to see whether the government and the governing party can in the end sufficiently overcome their desire to control to allow that to happen.

Ramaphosa’s plan ticks several of the most important boxes. But it also neglects some really crucial issues; there is hardly a mention of the transmission grid that needs huge investment if all this new generation is to come online  — the president rather cavalierly seems to expect the Just Energy Transition partnership’s mooted $8.5bn will provide — nor of the wheeling framework needed for all this power to be transported. Absent too is any mention of the ailing municipal infrastructure that is also holding back private generators from getting new power onto the grid.

After a full 10 days of consultations, the president has made up his mind on a plan that could make a big difference. Now he has to make it happen.