Electricity
The electricity crisis is one of the greatest threats to economic and social progress. In the last few days, government has once again been reminded of the fragility of the electricity system. Loadshedding continues to have a huge impact on the lives of all South Africans, disrupting business activities, and placing additional strains on families and communities.
Due to the aging power stations, poor maintenance, policy missteps and the ruinous effects of state capture, the country has a shortfall of around 4 000 megawatts (MW) of electricity. During the past year, government has taken firm steps to bring additional generation capacity online as quickly as possible to close the shortfall.
As a result, several new energy generation projects will be coming online over the next few years. This includes:
- Over 500 MW from the remaining projects in Bid Window 4 of the renewable energy programme, which are at advanced stages of construction.
- 2 600 MW from Bid Window 5 of the renewable energy programme, for which the preferred bidders were announced last year.
- up to 800 MW from those risk mitigation power projects that are ready to proceed.
- 2 600 MW from Bid Window 6 of the renewal energy programme, which will soon be opened.
- 3 000 MW of gas power and 500 MW of battery storage, for which requests for proposals will be released later this year.
- an estimated 4 000 MW from embedded generation projects in the mining sector.
- approximately 1 400 MW currently in the process of being secured by various municipalities.
In addition to closing the energy supply shortfall, government is implementing fundamental changes to the structure of the electricity sector. Eskom has established a separate transmission subsidiary and is on track to complete its unbundling by December 2022.
The utility has continued with its intensive maintenance programme to reverse many years of neglected maintenance and underperformance of existing plants. To regulate all of these reforms, on 9 May 2022 Cabinet approved amendments to the Electricity Regulation Act, 2006 (Act 4 of 2006) for public comment.
These far-reaching amendments will enable a competitive market for electricity generation and the establishment of an independent state-owned transmission company.
Hydrogen SA Strategy
Over the past year, government has built on its successful Hydrogen SA strategy to make major strides in positioning South Africa as a global leader in this new market. This includes the development of a Hydrogen Society Roadmap for the next 10 years as well as a Green Hydrogen Strategy for the Northern Cape, supporting the development of a green hydrogen pipeline worth around R270 billion.
Green economy
Renewable energy production will make electricity cheaper and more dependable, and will allow South Africa’s industries to remain globally competitive. Investments in electric vehicles and hydrogen will equip South Africa to meet the global clean energy future.
Government will be able to expand the mining industry in strategic minerals that are crucial for clean energy like platinum, vanadium, cobalt, copper, manganese and lithium. Government also has a unique opportunity in green hydrogen, given the country’s world-class solar and wind resources and local technology and expertise.
All of these measures – from structural reforms to support for SMMEs, investments in infrastructure and the emergence of new sectors – will drive a turnaround in economic growth driven by the private sector growth over the coming years.
“We know, however, that even with the best business environment and much faster rates of economic growth, it will take time for the private sector to create enough jobs for the millions of South Africans who need them. Our intent is to leave no one behind. That is why we are expanding public and social employment.” – President Cyril Ramaphosa, SoNA, 10 February 2022, Cape Town City Hall.
Related links
- Department of Forestry, Fisheries and the Environment
- the dtic
- Department of Minerals and Energy
- Renewable Energy Independent Power Producers Procurement Programme bids
- Speeches and statements - Hydrogen
Source: State of the Nation Address Highlights [PDF]
