Clarification of the response to the NCOP by Deputy President David Mabuza on the matter of Independent Power Producers
The Office of the Deputy President has noted the media coverage on Deputy President Mabuza’s Oral Replies in the National Council of Provinces held on Tuesday 3 March 2020.
Reportage emanates from the response given on the role of the Independent Power Producers in energy production and supply to the grid to the National Council of Provinces. These reports have unfortunately been characterised by distortions and miscomprehensions by some about what was said in the replies.
Deputy President Mabuza was unambiguous that pitting the role of ESKOM against Independent Power Producers, is an unnecessary false dichotomy. In his response for instance, Deputy President Mabuza said, “in terms of our electricity, generation capacity as a country, we are falling short of the capacity to generate more and more energy and that is constraining the country from development. We are talking about all these renewable energies because we desperately want to expand our generation capacity and this process and this time will pass.”
This is a statement that recognises the role of the Independent Power Producers to the economy, whilst not negating the role of Eskom in energy generation.
Addressing the energy needs and pressing challenges of the country requires all workable solutions and practical interventions that will resolve prevailing energy challenges including facilitation of public-private partnerships as envisaged by the National Development Plan.
As stipulated in the Oral Replies, government interventions are informed among others, by the:
- National Development Plan, which states that “the country’s energy market will be more diverse, with greater opportunities for investors to provide innovative, sustainable energy solutions within credible and predictable regulatory frameworks.”
- Integrated Resource Plan 2019, as a guiding blue-print aimed at ensuring energy security by developing adequate generation capacity to meet the country’s electricity demand.
- An energy mix that involves the implementation of the Renewable Energy Independent Power Producer Procurement Programme.
Therefore, Deputy President’s emphasis on achieving operational efficiency and long-term sustainability of ESKOM, is about ensuring that the energy utility as a State Owned Company, plays its role in growing the economy, creating jobs and meeting the developmental goals of the country.
In the final analysis, the contribution of Independent Power Producers in their aggregated form, should be seen as complimenting what the public utility is generating and supplying to the market. The Deputy President fully understands that in a country like South Africa, the state must play a meaningful and leadership role in responding to prevailing development imperatives.
It is in this spirit, that ESKOM as a strategic asset of the state, must be stabilised in order for it to play its developmental role. Therefore, part of resolving the prevailing energy crisis, is to stabilise the entity and bring it back to operational efficiency, optimal performance and long-term sustainability.
The response to the question on Independent Power Producers, was therefore a reflection on the contribution to the base load that is needed to supply intensive energy users. This is in no way underplaying the role of Independent Power Producers to the economy as a complimentary effect to what ESKOM is producing in order to grow the economy and ensuring energy security.
The Department of Minerals and Energy is in talks with the independent power producers to explore available options to bring projects in Bid Window 4 on stream sooner than the originally expected date.
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