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BLSA calls for single-minded focus to drive through energy reforms

Busi Mavuso is the chief executive of Business Leadership SA.

Busi Mavuso is the chief executive of Business Leadership SA.

Published Jul 4, 2022

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Business Leadership South Africa (BLSA) yesterday called for a single-minded focus on driving through the necessary energy sector reforms as South Africa’s businesses and economy bears the brunt of power utility Eskom’s inability to keep the lights on.

Eskom continued to implement stage 2 and stage 4 rotational power cuts throughout the weekend, as industrial action continues after wage talks at the Central Bargaining Forum on Friday did not conclude.

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Over the past week, the embattled utility has implemented the worst power cuts – stage 6 – the country has seen in more than two years as maintenance workers downed tools. More load shedding faces the country this week.

BLSA said the government and business needed to be aligned to deliver on the vision, saying South Africa must not rest until load shedding was a thing of the past.

“The load shedding of last week was devastating. I have been told of companies forced to lay off staff because they simply couldn’t open their doors. Those with generators couldn’t get diesel to fill them fast enough. Those on batteries found them running dead,” said Busi Mavuso, the CEO of BLSA in her weekly newsletter.

BLSA reiterated that South Africa must urgently diversify the sources of electricity in South Africa.

Mavuso said the country could not rely on a single state utility any longer.

“We have known this for some time, and had we acted more vigorously sooner, experiences like last week could have been avoided. We have the right ingredients – the private sector can now build plants of up to 100MW without a licence. The renewable energy independent power producers programme can procure far larger power production. Within a matter of years, we could substantially diversify the producers of electricity in South Africa.

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Mavuso said there was an acceleration in other private producers registering new plants with the National Electricity Regulator of SA, which has so far approved 18 amid an “avalanche” of applications.

The last approvals were done in 19 days from receipt of the application.

“That is a positive sign that red tape has been removed from the process of private generation,” she said. “The signs are clear then that the future electricity market will be a diverse one,” she said.

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Mavuso said the country had made progress, but it was too slow. However, she said one very good intervention had been the decision of Eskom to make available the vast tracts of land it owned in Mpumalanga to independent power producers.

“Much of this land already has the regulatory approvals needed to produce electricity and is close to grid connection points. A fortnight ago, (Eskom CEO Andre) De Ruyter announced the first 18 successful bidders for leases on this land. They will each put up 100MW plants, adding 1.8GW in capacity. Only 11 percent of the 36000 hectares available will be used by those first tenants, so there is much more potential from this source,” she said.

Mavuso emphasised that some more work was needed to be done.

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“Eskom must complete the unbundling of a separate system operator, one that will be able to buy electricity for the grid from the cheapest sources, only one of which will be Eskom. We need to put in place clear regulations and processes to facilitate wheeling through the grid – the process by which an electricity producer in one location can sell to customers in other locations through the grid. These additional steps will accelerate the rate at which private producers will enter the market,” she said.

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Related Topics:

EskomLoadshedding

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