South Africa’s emergency power plan — including solar and short-term powerships
President Cyril Ramaphosa is expected to announce plans to remove barriers to private power generation investments and speed up government’s procurement of gas and renewable power, News24 reported.
Citing a leaked presentation shown to political parties on Monday, the report stated that the plan does not suspend legislation, impose a state of emergency, or a state of disaster.
Instead, the Presidency presented a plan to improve Eskom’s capacity, remove red tape, and explore new legislation to regulate private power generation projects.
To achieve this, government reportedly proposes:
- Bringing back former Eskom employees to ensure the right skills and leadership are in place
- Ensuring Eskom has enough budget for maintenance
- Stabilising diesel supplies by improving storage and logistics
- Allowing Eskom to procure excess energy from own-power and independent power producers with a standard offer
- Allowing Eskom to procure emergency power on a short-term 2–3 year basis
- Adopt a “pragmatic” approach to local content requirements for renewable energy projects
Its proposal to allow Eskom to procure short-term sources of emergency power could enable a deal with controversial Turkish powership supplier Karpowership.
However, this would still be contingent on the company obtaining the necessary environmental approvals.
Eskom has also asked energy regulator Nersa to clarify the formula that it will use to calculate LNG prices in South Africa.
The Presidency’s proposals are in-line with those brought by Eskom itself, energy experts, and the National Planning Commission (NPC).
The Commission is chaired by Minister in the Presidency, Mondli Gungubele, and includes a panel of independent experts to help make informed decisions on South Africa’s future.
To bring this power onto the grid and end load-shedding within two years, the Commission highlighted several obstacles that must be removed.
At the start of July, the NPC suggested that South Africa declare an energy emergency and enable the swift construction of 10,000MW generating capacity and 5,000MW battery storage.
These include lifting the 100MW limit on embedded private power generation, scrapping Nersa’s registration process and replacing it with a quick online system, and streamlining environmental and water use approvals.
It also advocated temporarily lifting local content requirements.
Energy expert Chris Yelland previously explained that Hulamin shut down its local aluminium extrusion and anodising lines.
Therefore, bidders for South Africa’s renewable energy procurement programme couldn’t comply with local content requirements on the aluminium frames for photovoltaic solar modules.
Eskom CEO André de Ruyter also previously complained that they were forced to buy solar panels from a single supplier, causing them to pay 15% to 20% more than the market price.
De Ruyter said that this supplier could only produce around 300MW of solar panels per year.
Chris Yelland, managing director of EE Business Intelligence
Yelland also previously provided a breakdown of how South Africa could bring 10,000MW of renewable energy and 5,000MW of battery storage to the grid.
He said the capacity could be procured from various sectors, including domestic, commercial, industrial, agricultural, mining, and metropolitan municipalities.
Ramaphosa’s plan reportedly includes incentivising households and businesses to install rooftop solar with a feed-in tariff to sell power to Eskom.
Eskom has proposed a scheme to give customers with solar power a discount on their electricity bills.
The power utility would calculate the customer’s credit using its proposed Homeflex 1 tariff — the same tariff it charges customers.
However, with last year’s proposal for a feed-in tariff, Eskom also wanted to substantially increase its fixed capacity fee from R218 to R932 per month.
This is part of its initiative to develop a cost-reflective tariff that separates the cost of the grid connection from the cost of electricity generation.
It should be noted that Eskom has publicly questioned the source and accuracy of this figure.
This is curious, as Eskom itself provided the figures MyBroadband reported in response to questions about its plans to adjust its tariff structure.
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