FOCUS OVERVIEW
Energy Policy decisions hold the key to stabilising power supply.
The open-cycle gas turbine plant at Shakaskraal in KwaZulu-Natal.
T
he decision in May 2019 that power projects generating less than 10MW do not have to get licences from national government has given hope to independent power producers and city governments across South Africa that a new era in energy policy has begun. These smaller projects can go ahead (up to a total of 500MW) outside of the country’s Integrated Resource Plan but the next step – allowing companies to sell any excess power they generate to the grid – will be a real game-changer. South Africa’s vaunted Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) attracted about R200-billion in committed investments in just five years but it was limited to large projects. An example of the potential that lies within companies is Tongaat Hulett. This company’s sugar mills are producing between 12MW and 14MW of power. The company believes that the national sugar industry could generate between 700MW and 900MW. The same could be said for Sappi’s wood and fibre mill and all of the country’s breweries. Most mining companies are now investigating (or have started) generating power for their own use. Discussions about feed-in tariffs will have to be finalised before the huge energy-generating potential of these sectors can be fulfilled. If SOUTH AFRICAN BUSINESS 2020
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SECTOR INSIGHT Small-scale independent generation could be a game-changer.
national utility Eskom is broken into separate business units then the likelihood of the tariff discussions taking place will greatly increase. In his first medium-term budget policy statement in late 2018, new Finance Minister Tito Mboweni, expressed an opinion on the unbundling of Eskom. Mboweni said, “Restructuring of the electricity sector is underway. This must include a long-term plan to restructure Eskom and deal with its debt obligations.” Eskom runs electricity genera-
