Ramaphosa’s energy action plan ’15 years too late’ – analyst

President Cyril Ramaphosa’s announcement of “new emergency measures” to deal with South Africa’s electricity crisis was met with mixed emotions.

While many people welcomed the energy action plan, experts and business organisations questioned the implementation process and Eskom’s debt. Ramaphosa on Monday announced regulations would be changed to allow for fast-tracking new energy generation projects.

Energy analyst professor Anton Eberhard said while the interventions were positive, “implementation will be key”.

There was recognition for a massive upscaling of private investment in generation in three areas, he said:

• “Expanding existing utility-scale procurements by the Independent Power Producer Procurement Programme offices;
• “Further regulatory reform to accelerate private investment in distributed energy generation [no licences required, any size, one-stop shop to fast-track approvals, special legislation]; and
• “Massively expand roof-top solar through a predictable feed in tariff.”

Eberhard said if all the recommendations were implemented within six months, South Africans could expect load shedding to diminish and power cuts to end in three years.

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“Otherwise we’ll experience ongoing power cuts. Key to implementation will be how the national energy crisis committee operates,” he added.

“The president said government would access outside expertise. This is crucial.”

Furthermore, South Africa needed to “stop pretending transmission has been unbundled, because it doesn’t even yet have an independent board”, and was not operating as a separate company. However, transmission investments were critical for transporting electricity from new generation projects to consumers.

“We need to put transmission in the most favourable position to raise investment finance,” Eberhard said.

“If we don’t, we’ll have another family meeting and a new crisis committee in three years’ time around the failures in electricity transmission.”

Political economy analyst Daniel Silke said Ramaphosa’s plan was “15 years too late” and should have been formulated when load shedding first hit South Africa. Government, he said, has been “sitting on their hands for the last 15 years”.

“The position deteriorated, the maintenance, the oversight, the lack of procurement of new generation capacity has just been a failure for the past 15 years, so we are now trying to play catch-up in a very short period of time,” Silke said.

It was clear the ongoing blackouts were having a disastrous effect on the economy and also on the morale of South Africans, given the relative and increasing fragility of the ANC at the polls. The extended amount of load shedding potentially can undermine the party’s attempt to get over 50% of the vote at the next election, he said.

“So there is a real political urgency for the ANC now to try and salvage the parallel position. I think many of the proposals are welcome and what they indicate is there’s an admission the state has to get out of the way of energy procurement.”

Silke said there had to be a reduction in the regulatory environment, as the president indicated a much more flexible position on independent power producers and the ability to purchase excess energy from them.

“These are all to be welcomed, even at this very late stage. But I think there is still likely to be a clash within some of the measures outlined by the president,” he told The Citizen.

ALSO READ: At last! Ramaphosa’s load shedding plan more than just hot air

“A number of, what I would call, sort of ideological gatekeepers within the ANC prefer to see greater state control and greater regulatory burdens rather than a more reformed position as the president announced.

“So I think there are still administrative and political gaps which have to be thought about within the ANC to really get a proper buy-in on many of the proposals that have been put forward and hopefully [they] will not delay.”

Business Leadership South Africa said the measures announced should be implemented with urgency and purpose, as well as transparency, as it was willing to assist in driving the implementation of the new energy action plan.

“Stage 6 load shedding has been a real drain on business and ordinary South Africans,” Business Leadership South Africa’s Busi Mavuso said.

These were major steps and there was no need for the declaration of a state of emergency or disaster. However, it was also important to determine how Eskom would pay for the measures and tackle its debt burden.

“As the president said, the shortage of electricity is a huge constraint on our economic growth and job creation – it deters investment and it reduces our economy’s competitiveness,” Mavuso added.

“There’s lots of work ahead but we believe we are finally moving in the right direction.”

– reitumetsem@citizen.co.za