Business fraternity hails Ramaphosa’s energy crisis plan

A general view at dawn of the Jeffreys Bay Wind Farm. Image, EPA, NIC BOTHMA.

A general view at dawn of the Jeffreys Bay Wind Farm. Image, EPA, NIC BOTHMA.

Published Jul 26, 2022


The wider business community in South Africa has welcomed President Cyril Ramaphosa’s plan to liberate the nation from load shedding imposed by the suffering power utility, Eskom.

President Cyril Ramaphosa last night said South Africa needed to urgently add much, much more capacity to the grid to end load shedding as Eskom has an electricity shortage of up to 6 000MW.

The plan to import electricity from countries such as Zambia and Botswana was among the measures he presented.

Business Leadership South Africa (BLSA) said on Tuesday that the major steps that the president has taken means there is now no need for the declaration of a state of emergency or disaster.

“The news that Eskom will over the next year increase its maintenance budget to increase the reliability of its power stations is positive, as is cutting red tape to allow the utility to procure parts and equipment more easily is the sensible thing to do,” BLSA said.

Some of the actionable steps Ramaphosa announced are:

  1. Fix Eskom and improve the performance of our existing fleet of power stations;
  2. Accelerate the procurement of new capacity from renewables, gas and battery storage;
  3. Accelerate greater private investment in generation capacity;
  4. Enable businesses and households to invest in rooftop solar; and
  5. Transform the electricity sector and position it for future sustainability.

BLSA warned that it was important to determine how Eskom would pay for these measures and tackle its debt burden.

“BLSA is pleased with the announcement that Finance Minister Enoch Godongwana will deal with the issue of Eskom’s debt in his medium-term budget policy statement in October. We are particularly pleased that the president is involving the private sector in his interventions in that companies will now be able to build power plants of any size without needing to obtain a licence and will be able to sell power to the grid. Even owners of buildings and homes will now be permitted to sell power from rooftop solar panels,“ BLSA further said.

Meanwhile, the South African Wind Energy Association (SAWEA) has said it applauded the interventions that the president and his team have set out to tackle the country’s energy crisis head-on.

“The Association views the plan as being sharply focused on the key areas of concern, encompassing the improvement of Eskom’s energy availability factor (EAF) with maintenance; bringing all available energy into the system quickly; accelerating new generation capacity; addressing bureaucratic blockages and liberalising the energy system,” SAWEA said in a statement.

“To deliver on the required generation capacity, as outlined, we’d like to highlight the necessity to urgently address and prioritise the grid capacity challenges, as solutions will need to be advanced to ensure that the areas with the best wind and solar PV resources are unblocked,” commented Niveshen Govender, SAWEA CEO.

Niveshen Govender, SAWEA CEO.

“While we understand that these are temporary policy adjustments to overcome the effects of the energy crisis, we see this as the right steps to creating an open energy system that will attract more investment, create jobs and benefit the South African economy,” added Govender.

The Democratic Alliance said on Tuesday that it would oppose any further taxpayer-funded bailouts to Eskom should Finance Minister Enoch Gondongwana announce such measures in the Medium Term Budget Policy Statement to be tabled later this year.

Investec’s economist, Annabel Bishop, said the energy crisis came to a head in July on stage 6 load shedding, prompting last night’s presidential announcements on a set of actions.

“Regulatory hurdles, and the extremely slow pace of state bureaucracy has impeded the development of the private energy sector and a large-scale crowding in of private sector generation is rapidly needed, which the president has now given strong support for, along with the need for a severe clampdown on theft and criminal activity, payment of services, stabilising Eskom and improving its plant performance. A competitive energy market is envisioned, along with a strong increase in renewable energy investment,” Bishop said on Tuesday.

Investec chief economist Annabel Bishop. Photo: Supplied

Trade union Solidarity welcomed the government's plan to tackle the power crisis, saying that it represented an anxious leap in the right direction.

Solidarity chief executive Dr Dirk Hermann said the government's move towards a more decentralised system for power generation was the only workable and sustainable solution to South Africa's power crisis.

"As also outlined in Solidarity's earlier plan, the encouragement and facilitation of small-scale power generation on a large scale is of crucial importance to stabilise our power grid," Hermann said.

The solar PV industry body SAPVIA said the Association and its members stand ready to answer the call for the private sector to unite and contribute to ending energy scarcity in South Africa by leveraging the multiple benefits of solar power to the grid, the country, and its citizens.

SAPVIA’s CEO Rethabile Melamu, said, “The interventions named demonstrate a willingness to confront the issues of the Electricity Crisis with the necessary resources and political will. SAPVIA maintains that the fastest power on the grid has always been to build solar photovoltaic power plants that can be located at any point on the network and “wheeled” across the grid, or co-located at the customer’s site, directly alleviating pressure on the surrounding network.”