South Africa’s big plan to fix Eskom and end load-shedding
President Cyril Ramaphosa has announced his plan to end load-shedding, including bringing skilled engineers back to Eskom, incentivising the uptake of rooftop solar, and buying surplus capacity from independent power producers.
He explained the plan during his address to the nation on Monday, 25 July 2022.
“The crisis that we are facing requires that we should take bold, courageous, and decisive action to close the electricity gap in our country,” he said.
“As government, we are announcing a number of interventions to overcome the immediate crisis.”
Ramaphosa’s plan included steps to improve Eskom’s generation capacity, remove barriers to private power investment, and explore new legislation to regulate private generation projects.
It also involves bringing skilled engineers back to the ailing power utility.
“One of the challenges that Eskom has faced has been the shortage of skilled personnel and engineers,” Ramaphosa said.
“The utility is now recruiting skilled personnel, including forming Eskom senior plant managers and engineers from the private sector.”
Ramaphosa also revealed plans for Eskom to add new capacity to the grid urgently.
“As an immediate measure, surplus capacity will be bought from existing independent power producers,” he said.
“As part of addressing the shortage of megawatts, Eskom will now also purchase additional energy from existing private generators such as mines, paper mills, shopping centres, and other private entities that have surplus power.”
Ramaphosa also said the power utility would import electricity from neighbouring countries through the Southern African power pool arrangement.
He added that the finance minister Enoch Godongwana would announce a plan to tackle the significant burden on Eskom’s ability to conduct maintenance — its near R400 billion debt.
“The National Treasury is working to finalise a sustainable solution to Eskom’s debt,” he said.
“The minister of finance will outline how government will deal with this matter in an effective manner when he presents the medium-term budget policy statement in October.”
The President also announced the establishment of a “special law enforcement team” to help Eskom tackle crime, corruption, and fraud at its power stations.
He added that the government’s decision to raise the licencing threshold to 100MW had unlocked a pipeline of more than 80 confirmed private sector projects with a combined capacity of over 6,000MW.
“We are already working together with industry to accelerate the most advanced projects, several of which are already entering construction,” Ramaphosa said.
Due to the enthusiasm with which the private sector received the invitation to produce their own power, Ramaphosa said government would remove the embedded generation threshold.
The plan aligns with those proposed by Eskom, various energy experts, and the National Planning Commission (NPC).
In early July, the NPC proposed that South Africa declare an energy emergency to allow time to construct 10,000MW generating capacity and 5,000MW battery storage.
Its suggestions included temporarily absolving companies from local content requirements for constructing and commissioning new generation and storage capacity and removing the 100MW embedded private power generation ceiling.
The NPC also advocated temporarily lifting local content requirements.
Proposals also included discarding Nersa’s registration process. However, Ramaphosa said that this would remain in place.
Eskom CEO André de Ruyter previously complained that local content requirements forced it to buy solar panels from a single supplier at 15% to 20% more than the market price.
De Ruyter also said that the supplier could only produce around 300MW of solar panels per year.
Energy expert Chris Yelland also previously outlined how South Africa could bring 10,000MW of renewable energy and 5,000MW of battery storage to the grid.
He explained that the capacity could be procured from the domestic, commercial, industrial, agricultural, and mining sectors and metropolitan municipalities.
Ramaphosa’s plan involves incentivising households and businesses to install rooftop solar with a feed-in tariff to sell power to Eskom.
“To incentivise greater uptake of rooftop solar, Eskom will develop rules and a pricing structure – known as a feed-in tariff – for all commercial and residential installations on its network,” he said.
Yelland gave his support for the President’s plan on Twitter.
“Well I am deeply impressed with the comprehensive message and plan of action by @PresidencyZA @CyrilRamaphosa,” he posted.
“Bringing an end to load-shedding with these plans is most definitely possible, in a national priority project.”
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