According to President Cyril Ramaphosa, the National Treasury is striving to complete a sustainable solution to Eskom’s enormous R400 billion debt.
The President said the debt remained to be a tremendous burden on Eskom’s ability to handle its various issues when speaking to the country on the energy crisis on Monday.
Over the past three weeks, the nation has faced intermittent power outages.
He said that the Minister of Finance would describe the government’s effective approach to handling this issue in his Medium-Term Budget Policy Statement in October.
He stated that the government would invest in the grid and repurpose power plants that had reached the end of their useful lives using climate financing supplied through the Just Energy Transition Partnership.
Komati, Majuba, Lethabo, among other power plants, will all host Eskom’s first solar and battery storage projects
. “These will contribute more than 500 MW to the system,” he claimed.
The South African Police Service (SAPS) has established a specialized law enforcement unit to assist Eskom in battling the rampant crime and corruption the power utility is facing.
“Several others are already being prosecuted for corruption and fraud related Eskom contracts,” said the latest arrests of a number of persons.
The President asserted that Eskom will be well-positioned to carry out its maintenance and investment programs with reforms to the regulatory environment and increased social mobilization.
There can be no more justifications, he said. These actions will enable us to restrict load shedding to less severe levels and lessen the likelihood of further instances of such extreme load shedding.
This involves prioritizing the need to create new capacity as soon as possible and adopting a pragmatic approach to the local content criteria for these projects.
The Independent Power Producers Office and the Department of Trade, Industry, and Competition will offer more information in this regard in the upcoming days, according to the President.
The government and business are already collaborating to promote the most advanced projects, some of which are now in the construction phase.
“These modifications have drastically altered the generational landscape. We will fully remove the license threshold for embedded generation when this reform is successful and the private sector responds with enthusiasm,” he said.
This will make it possible for private investment in electricity production to increase.
“All new generation projects will still need to register with the regulator, adhere to our environmental laws, and meet the technical standards for grid connection even if they won’t need licenses.
“The time it takes for any energy project to get the required permissions and start construction is one of our biggest problems when adding capacity to the system.
to lengthy regulatory procedures and bureaucracy, the entire process—from design to commercial operation—has frequently taken longer than three years, he said.
While the current situation “demand that we act forcefully and more quickly,” the current legislation may be adequate in normal circumstances.
According to him, the administration would quickly introduce special legislation in Parliament to overcome the legal and regulatory barriers to new generation capacity for a finite time.
The President brought up this issue on Monday during a meeting he had with the heads of political parties with representatives in the National Assembly.
There was broad consensus throughout this interaction that the procedure should be accelerated after the special legislation was introduced in Parliament.
“Wherever it is practicable to do so within the confines of current law, we will temporarily waive or streamline some regulatory requirements.
In places with low and medium environmental sensitivity, the regulatory requirements for solar projects may be lowered. It also means that Eskom can build new power lines and substations in low- and medium-sensitivity areas and along important electricity routes without obtaining environmental authorization.
In addition, he stated that the government was creating a single point of entry for all applications for energy projects in order to ensure coordination of the approval procedures across government.
The President declared that he has given agencies and organizations instructions to check all current deadlines and make sure that all applications are handled urgently.
These actions are better than announcing a state of emergency or even disaster, as some have recommended. These initiatives will enable us to take the required action to speed up new generation capability while maintaining the legal system and the rights of all South Africans.
Neither a national emergency nor a calamity, according to him, were required for the country to enact “common sense legislation that should help in resolving our energy crisis.”
“We want to make it possible for homes and companies to invest in rooftop solar. We should exploit South Africa’s abundant sunshine to produce electricity.
Installing rooftop solar and bringing this power into the grid is a major opportunity for homes and businesses, he said.
Eskom will create guidelines and a charge structure, known as a feed-in tariff, for all commercial and residential installations on its network in an effort to encourage wider rooftop solar use.
As a result, those who can and have solar panels placed in their residences or places of business will be able to sell Eskom any extra power they don’t use.
Restructuring at Eskom
In accordance with plan, the electricity utility was being divided into three entities: generation, transmission, and distribution.
He said that Eskom was on pace to split its generation and distribution operations by the end of 2022 because an independent transmission firm had already been founded.
Soon, boards will be chosen for the transmission and generating organizations.
The completion of the Electricity Regulation Amendment Bill will speed up broader reforms to create a competitive electricity market and encourage private sector investment. Future generations’ access to electricity will be drastically altered by these changes.
The President claimed that the changes would “diversify” the nation’s energy sources and increase supply security.
“These adjustments will boost competition between state-run and privately operated generators. The state will continue to own the grid.
Eskom will stay “the cornerstone of our nation’s energy sector as we increase its effectiveness, financial viability, and performance.”
Energy Crisis Committee of the Nation
The President has established a National Energy Crisis Committee, which will be led by the Director-General in the Presidency, to guarantee that the actions mentioned in Monday’s address are carried out in a coordinated manner.
All the departments and organizations concerned in the provision of electricity are brought together by it, he said.
The Committee will make use of the greatest experience offered by business, labor, professional engineering entities, and community-based organizations.
To guarantee prompt implementation, the appropriate Ministers will directly report to the President on a regular basis.
He explained that the measures weren’t merely meant to deal with the country’s urgent problems.
“Achieving long-term energy security will ensure that there will never be another electricity shortfall is our ultimate goal.
By stabilizing Eskom, enhancing plant performance, creating a competitive power market, allowing for private investment in additional generation capacity, and expanding our investment in renewable energy, we hope to achieve this. These actions are required to boost economic expansion and increase employment.
Making this crisis a chance for future prosperity and resilience, he added, “we will position our nation as a leading role in the transition to new and sustainable energy sources.”
The company was now hiring qualified individuals, including engineers and senior plant managers from the private sector who had previously worked for Eskom.
These knowledgeable workers will assist other staff members and work to restore top-notch operating and maintenance practices.