President Cyril Ramaphosa says government’s immediate priority in the next year is to restore energy security in the country.
Delivering his State of the Nation Address (SONA) on Thursday evening, the President acknowledged the dire effects of the electricity crisis, which has plunged normal life and business operations into disarray.
“We are in the grip of a profound energy crisis, the seeds of which were planted many years ago. [As] we outline our agenda for the year ahead, our most immediate task is to dramatically reduce the severity of load shedding in the coming months and ultimately end load shedding altogether.
“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. What we can do is to fix the problem today, to keep the lights on tomorrow and for generations to come,” President Ramaphosa said.
He highlighted that the Energy Action Plan (EAP), announced last July, is the plan spearheading government’s approach to overcoming the energy deficit.
The EAP’s five points of action are:
- Fixing Eskom’s coal-fired power stations and improving the availability of existing supply.
- Enabling and accelerating private investment in generation capacity.
- Accelerating procurement of new capacity from renewables, gas and battery storage.
- Unleashing businesses and households to invest in rooftop solar.
- Fundamentally transforming the electricity sector to achieve long-term energy security.
“During the last six months, we have made important progress in implementing the plan. We have taken steps to improve the performance of Eskom’s existing power stations so that the coal-fired power stations that provide 80% of our electricity produce the amount of electricity for which they were designed.
“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. 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,” President Ramaphosa said.
Added to this, the President said Eskom is rebuilding skills and recruiting skilled personnel, and sending them to power stations which are not performing up to par.
“The Engineering Council of South Africa has offered to give as much assistance as required by deploying engineers to work with the management teams at power stations.
“We have deep skills and expertise right here in South Africa – we just need to use them,” he said.
Adding capacity to the grid
President Ramaphosa announced that government will also be forging ahead with several measures to address the strain on the national power grid.
“In his Budget Speech, the Minister of Finance will outline how households will be assisted and how businesses will be able to benefit from a tax incentive.
“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.
Regulatory reforms related to private energy generation are already bearing fruit, with private projects expected to add some 9 000MW of energy over time.
Other sources of energy expected to add to the grid over time are:
- At least 2 800MW from projects under the renewable energy programme.
- Eskom procurement of emergency power that can be deployed within six months.
- Investing in new transmission lines and substations.
“All of these measures will result in a massive increase in power to the grid over the next 12 to 18 months and beyond.
“This power will be in line with our diverse mix of energy sources, including our current coal-fired power stations, solar, wind, gas, nuclear, hydro and battery storage,” he said.
Turning to Eskom’s pressing financial challenges, President Ramaphosa said government is prepared to assist the power utility to address some critical areas of concern.
“National Treasury is finalising a solution to Eskom’s R400 billion debt burden in a manner that is equitable and fair to all stakeholders, which will enable the utility to make necessary investments in maintenance and transmission.
“Government will support Eskom to secure additional funding to purchase diesel for the rest of the financial year. 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.