President Cyril Ramaphosa announced Thursday that his administration had declared a national disaster to tackle the energy crisis.
In his State of the Nation Address, Ramaphosa also said the government would not be introducing new plans but would focus on following through and accelerating its existing strategy to end load-shedding.
This includes fixing Eskom, procuring new capacity, encouraging private investment, “unleashing” rooftop solar, and transforming the electricity sector.
“We are not presenting new plans, nor are we outlining here the full programme of government,” Ramaphosa stated.
He said South Africa is in the grip of a profound energy crisis, the seeds of which were planted many years ago.
“We cannot undo the mistakes that were made in the past, the capacity that was not built, the damage that was done to our power plants due to a lack of maintenance, or the effects of state capture on our institutions,” said Ramaphosa.
“What we can do is to fix the problem today, to keep the lights on tomorrow and for generations to come.”
Ramaphosa doubled down on the energy action plan he announced in July 2022.
“This [plan] was to address the electricity shortfall of 4,000 to 6,000 MW,” he said. The plan outlines five interventions:
- Fix Eskom’s coal-fired power stations and improve availability of existing supply
- Enable and accelerate private investment in generation capacity
- Accelerate procurement of new capacity from renewables, gas, and battery storage
- Unleash businesses and households to invest in rooftop solar
- Fundamentally transform the electricity sector to achieve long-term energy security
“Experts agree that this plan is the most realistic route to end load-shedding,” Ramaphosa said.
Energy experts MyBroadband spoke to said the only part of the plan that had any hope of providing short-term relief was incentivising the mass rollout of rooftop solar.
Ramaphosa said finance minister Enoch Godongwana would, in his budget speech later this month, outline a tax incentive for businesses and how government would help households.
“National Treasury is working on adjustments to the bounce-back loan scheme to help small businesses invest in solar equipment, and to allow banks and development finance institutions to borrow directly from the scheme to facilitate the leasing of solar panels to their customers,” he said.
The president also said the restructuring of Eskom continues, and the National Transmission Company will soon be operational with an independent board.
“Later this year, we will table the Electricity Regulation Amendment Bill to transform the energy sector and establish a competitive electricity market.”
Provided South Africa’s electricity grid can be upgraded to handle it, this could allow small-scale independent generators, such as homes and businesses with rooftop solar, to sell their excess into the grid.
Regarding improving the reliability of Eskom’s coal-fired fleet, which provides 80% of South Africa’s electricity, Ramaphosa said progress had been made.
“Under its new board, Eskom is deploying people and resources to improve the reliability of the six power stations that have contributed the most to load shedding,” he said.
“Eskom is urgently fast-tracking construction of a temporary solution to bring back three units at Kusile power station following the collapse of a chimney stack last year, whilst simultaneously repairing the permanent structure.”
It should be noted that Eskom previously said it would take around a year to bring these three Kusile units back online.
“We are rebuilding the skills that have been lost and have already recruited skilled personnel at senior levels to be deployed at underperforming power stations,” said Ramaphosa.
“We have deep skills and expertise right here in South Africa — we just need to use them.”
He also said that National Treasury is finalising a solution to Eskom’s R400 billion debt burden, enabling the utility to make necessary investments in maintenance and transmission.
Ramaphosa assured this would be done equitably and fairly for all stakeholders.
Regarding the criminality and reports of syndicates still operating within Eskom, Ramaphosa said the security cluster was tackling the issue.
“The South African Police Service has established a dedicated team with senior leadership to deal with the pervasive corruption and theft at several power stations that has contributed to the poor performance of these stations,” the president said.
“Intelligence-driven operations at Eskom-related sites have so far resulted in 43 arrests.”
On the topic of diesel supplies for Eskom’s crucial open-cycle gas turbine (OCGT) power plants, Ankerlig and Gourikwa, Ramaphosa said government would support the utility to secure additional funding.
“This should reduce the severity of load shedding as Eskom will be able to use its diesel-run plants when the system is under strain,” he said.
Rampahosa’s statement on Eskom’s diesel supply issue follows a report from energy experts Chris Yelland and Mariam Isa.
Late last year, Eskom revealed that it had run out of money for diesel to power its OCGTs.
After some scrambling, the government made it sound like it had helped Eskom secure interim diesel supplies.
However, the report revealed that Eskom had received no support from government and had, in fact, been forced to reallocate money from its budget to buy diesel from PetroSA at above-retail prices.
Ramaphosa said that in the next 12 to 18 months “and beyond”, the measures he spoke about in his speech would deliver a massive increase in power to the grid.
“Eskom will procure emergency power that can be deployed within six months to close the immediate gap,” he promised.
In addition to rooftop solar and fixing Eskom, Ramaphosa also mentioned embedded generation and independent power producers.
“One of the potent reforms we have embarked upon is to allow private developers to generate electricity,” Ramaphosa said.
“There are now more than 100 projects, which are expected to provide over 9,000 MW of new capacity over time.”
He said several companies had participated in the renewable energy programme and would soon enter construction, delivering 2,800 MW of new capacity.
In addition, he assured Eskom was building out its transmission grid, which has become saturated.
This means there is no more space on the grid to wheel wind or solar electricity from where it’s generated in the remote regions of the Cape provinces to elsewhere in the country.
“We are investing in new transmission lines and substations, especially in areas such as the Eastern Cape, Northern Cape and Western Cape,” he said.