Minerals Resources and Energy Minister Gwede Mantashe on Tuesday said that the lack of grid capacity was the single challenge the country faced.
“The single-most challenge we face to address the energy crisis is the grid unavailability,” Mantashe said speaking at the tabling of his department’s budget vote in Parliament.
He said despite the country struggling with the grid capacity and load shedding roll-outs, connectivity and universal access to electricity for citizens was important.
Mantashe said, notwithstanding, the headwinds, the department remained steadfast in setting objectives that it should meet in its program to ensure universal access to electricity for the poor.
He said the department aimed to connect 917 000 households to the grid.
“Today, 673 946 households are connected to the grid, the remainder of 24 354 will be connected in this financial year. We have been given advice, and one of those was that we should not be connecting more people because there is a shortage of electricity,” Mantashe said.
“Our view is that connectivity and universal access to electricity are necessary, it can’t wait for the grid. We must deal with the grid problem but connect our people.”
Mantashe said the department's budget for the 2023/24 financial year was R10.7 billion.
“You can notice that it’s one of the smallest budgets in our budget, confirming that we are not investing enough in revenue-generating departments,” he said.
Mantashe said requests for proposals for the procurement of a combined 10000MW of renewable energy in bid windows seven and eight would be issued in the second and fourth quarters of this financial year.
He said other requests for proposals in the pipeline were for the procurement of 1 230MW of battery storage, also in the second and fourth quarter of the financial year ending on March 31, 2024.
A request for proposals for the procurement of 3 000MW of gas-to-power energy would be issued in the second quarter and 2500MW of nuclear energy in the fourth quarter, he said.
Mantashe said lobby groups which are mostly foreign-funded were blocking development in the country.
“I don’t think the issue is either climate change or development. You do development with responsibility, but you don’t block development,” he said.
“I was excited about the developments in Namibia, the only thing that was not mentioned was that the companies making developments in Namibia were chased here because we want to be a close clean space in a world that is developing.”
Last year, a court in Makhanda upheld a ban imposed on the energy company Shell from using seismic waves to explore for oil and gas off the Indian Ocean coast after communities of the Wild coast and environmentalists took the company to court.
Meanwhile, Mantashe said the mining industry contributed meaningfully to the gross domestic product.
“The sector created 23 552 jobs between December 2021 and December 2022, resulting in the overall employment of 472 088 workers. According to Sars (SA Revenue Service), the mining sector contributed R89 billion in corporate tax in the 2021/22 financial year,” Mantashe said.
He said this was a clear indication that mining remained a strong pillar of the country’s economy.
“Mining would contribute better to the economy if the constraint in load shedding, rail, and port system bottleneck is urgently resolved,” he said.
In response to the tabled budget, Niveshen Govender, the CEO of South African Wind Energy Association (Sawea) said, “Public procurement of this magnitude should be weighed up against the value of a consistent pipeline of smaller consecutive bid windows.
“In particular, we would like to see the various stakeholders considering what the best option is to ensure the biggest impact balanced between new generation capacity and socio-economic benefit.”
To ensure success in the public procurement programme, Sawea called for a co-ordinated approach, collectively working on various aspects including: regulatory and technical solutions to support the co-location of Wind, Solar PV and Battery Energy Storage Systems, streamlined environmental processes with concessions applied equally as well as practical and realistic forecasting requirements all while ensuring grid access and continuous development, Sawea said.
BUSINESS REPORT