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The energy to change things for the best outcome

According to World Bank data, some 84.4% of South Africans had access to electricity in 2020. In 1996, that figure was 57.6%, so there has been a marked improvement thanks to sustained public sector investment, particularly in terms of municipal electrification projects, which deliver the final product.

However, keeping pace with demand is becoming increasingly challenging, given significant population growth, urban migration, and our unique and complex socio-economic history. This has been compounded by continued and unscheduled breakdowns within the Eskom power station fleet.

Towns and cities are further faced with the need to upgrade their distribution networks. Across the board, electrification infrastructure is aged and straining. Moving forward, addressing this will require a collective intervention effort from business, government and the community.

This was the essential message during President Cyril Ramaphosa’s energy action plan address on 25 July 2022. Broadcast to the nation, the plan acknowledges the extent of the electricity crisis and the immediate steps needed to prevent the undermining of South Africa’s socio-economic objectives. The primary short-term goal is power security, alongside a progressive transition away from coal-fired to green energy.

A renewed call for private participation

In parallel with additional funding support for critical maintenance at Eskom power stations, the action plan embraces full-scale participation by the private sector. That ranges from households and general businesses with rooftop solar, to specialist independent power producers (IPPs).

To fast-track the process, the unlicensed threshold – previously capped at 100 MW for IPP embedded generation projects – is being scrapped. Projects will still need to be registered with and meet the National Energy Regulator of South Africa’s requirements. However, the fact that the sky’s now the limit is a major milestone.

Red tape and renewables

Historically, one of the key obstacles to infrastructure implementation has been the public procurement process. This is now also being addressed to speed up the phased execution of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which commenced with Bid Window 1 in 2012.

In the latest round, Bid Window 5 projects are due to achieve commercial operation from early 2024, adding a further 2 600 MW to the grid. Given the long lead times for completion, government has committed to ensuring that Bid Window 5 projects commence construction as scheduled.

Affordability and climate change

As we focus on keeping the lights on, IPPs, municipalities and government must factor in the social cost. Power must be an enabler that sustains our communities, environment and economy. It must therefore be efficiently supplied, equitably shared and priced at competitive levels that are affordable.

The Just Energy Transition Partnership (JETP) is a key step along the way. Concluded between South Africa and the governments of France, Germany, the UK, USA and EU – following the 26th UN Climate Change Conference (COP26) – it paves the way for exciting development opportunities. In terms of the JETP, around US$8.5 billion (R144 billion) has been committed in the first phase to support South Africa’s shift to renewables. As this starts to bear fruit, South Africa’s future will be a bright one.

Alastair

www.infrastructurenews.co.za

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