Replies by President Cyril Ramaphosa to questions for oral reply in the National Assembly
Question 13 – Load shedding and electricity supply
The Leader of the Opposition (DA) to ask the President of the Republic:
With reference to his recent assertion that the ongoing electricity blackouts, which are being implemented more frequently and at more severe stages by Eskom, do not constitute a looming crisis, and in light of the challenges that these rolling blackouts present to learners studying for examinations and vulnerable businesses trying to remain operational after almost two years of economic lockdowns due to the COVID-19 pandemic, what are the relevant details of
(a) the Government’s urgent plans to reform Eskom and the Republic’s energy market to address the electricity crisis and
(b) any further emergency measures the Government will undertake to augment the Republic’s electricity supply in order to shield the economy and citizens from the Government’s failure to generate sufficient electricity?
Reply
Honourable Members,
The recent load shedding – which has disrupted daily life for millions of South Africans and caused great damage to our economy – is a stark reminder of the severe and intractable challenges in our electricity system.
Load shedding is always the last resort where demand for electricity is greater than what can be produced. It is necessary to prevent the collapse of the power grid and a complete blackout.
At its core, load-shedding is the inevitable consequence of the age of many of Eskom’s power plants and its inability over many years – due to debt, lack of capacity and state capture – to service its power plants.
Eskom has to undertake the fundamental maintenance that is necessary to improve the reliability of our electricity supply.
As it continues with maintenance, load-shedding will remain a possibility for the immediate future.
But we are not simply waiting for the inevitable. We are working hard to fix this problem.
As Eskom has been implementing a generation recovery plan to improve the availability of generating capacity and minimise the risk of load shedding, we have been undertaking measures to fundamentally change the trajectory of energy generation in our country.
As part of Eskom’s Roadmap, Eskom is currenty being restructured into three subsidiaries for transmission, generation and distribution.
The legal separation of the transmission entity is planned for 31 December 2021 and legal separation of generation and distribution is scheduled for December 2022.
The Electricity Regulation Act and Electricity Pricing Policy is being amended to reflect the new structure of the electricity industry.
The restructuring of Eskom will transform the sector, and will enable greater competition and investment in new generation capacity.
Some of our municipalities are already getting ready to take advantage of what flows from this transformation and have declared the clear intention to generate power for their residents.
This will also remove the risk of relying on one entity that has the sole monopoly on power generation.
This reform will have a significant positive impact on economic growth, and will improve the reliability and efficiency of our electricity supply.
Over the last year, we have put in place several additional measures to address energy constraints.
- We have amended Schedule 2 of the Electricity Regulation Act to exempt embedded generation projects up to 100MW from having to apply for a license. This will allow for more private sector investment in electricity generation capacity without any public funding and will reduce the risk of load shedding.
- Eight preferred bidders have been appointed for the 2,000 MW Risk Mitigation IPP Procurement Programme. These are for projects that can deliver electricity into the grid within 3 to 12 months from approval.
- We have revitalised the Renewable Energy Independent Power Producer Procurement Programme, with 25 preferred bidders announced in the fifth round of the programme. Together, they are expected to produce around 2,600 MW of wind and solar photovoltaic electricity.
- From the renewable energy Bid Window 4 projects, 1,600 MW had been connected to the grid as at the end of June 2021 and over 400 MW is to be connected by the end of the year.
While we can anticipate that substantial new generation capacity will come onto the grid in the near future, there are still many challenges that we need to address to secure a stable and reliable supply of energy.
These include the management of Eskom’s debt, overcoming the skills deficit within the company, steadily improving municipal revenue collection, further improving Eskom’s maintenance capabilities, addressing procurement challenges and rooting out all forms of corruption and criminality.
There are no easy solutions to load shedding.
However, we have developed a roadmap towards a revitalised Eskom within a transformed energy industry.
We are making significant progress in implementing the roadmap, and are determined to persevere – regardless of the difficulties and obstacles – until we have achieved energy security in this country.
I thank you.
Question 14 – Just transition partnership
Mr J S Malema (EFF) to ask the President of the Republic:
What are the (a) terms and conditions of the R131 billion loan by the partnership of the European Union, Germany, France, the United Kingdom and the United States for the Republic’s transition from coal to clean energy that was announced by the President of the United States of America at the Climate Change Conference of the Parties 26 and (b)repayment terms of loans that will be secured from the amount that was pledged?
Reply
Honourable Members,
Climate change is an existential crisis.
As a country, we are a signatory to the Paris Agreement to Combat Climate Change and as such have obligations to contribute our fair share to reducing greenhouse gas emissions.
The same Paris Agreement places an obligation on developed economies that are responsible for some 76 per cent of historical emissions, to provide support to developing economies to adapt to the effects of climate change and transition to a lower-carbon future.
The Political Declaration announced at COP26 in Glasgow gives effect to some of these obligations, both our own obligations and those of developed economies.
In terms of the Political Declaration, the US, UK, Germany, France and the EU have offered and I wish to underline, that this initial amount of US$ 8.5 billion – which is equivalent to around R131 billion has been offered – to support South Africa’s just transition efforts.
This support will take the form of various financial instruments, ranging from grants to concessional loans at a lower interest rate.
This funding will be mobilised over the next three to five years, with a view to longer-term engagement.
This is an initial commitment, which may increase as discussions progress and further funds are identified.
This commitment from international partners does not mean we need to accept the offer as such, nor do we need to accept any unfavourable terms, especially if the financing arrangements could impact negatively on the public fiscus.
The political declaration is in line with the obligation on the part of developed economies – as historical beneficiaries of high carbon emissions – to provide support to developing economies to transition to a lower-carbon future.
The pace and extent of decarbonisation in South Africa will be determined by the financial support available and will take account of the country’s social and economic challenges.
We will continue to chart our own developmental path and continue to affirm our right to develop our economy in a sustainable and inclusive manner. This is certainly not a blank cheque - we have to take into consideration or own context.
A significant proportion of funding is expected to be used for Eskom’s just transition plans, which includes decommissioning, repowering and repurposing of old coal-fired power stations in line with the Integrated Resource Plan 2019.
Funding will also be allocated towards the development of new sectors such as electric vehicles and the implementation of the Green Hydrogen Sector Master Plan.
More importantly, the Declaration recognises that a transition to a lower carbon economy must also address the needs of workers in affected industries and communities.
Funding offered through the Political Declaration will be used for targeted programmes of reskilling and up-skilling, creating employment and providing other forms of support to ensure workers, women and youth are the major beneficiaries of our shift to a greener future.
Achieving our Nationally Determined Contribution targets and implementing the IRP 2019 requires significant investment.
A negotiations team will be established between South Africa and the partner group of countries and we will have our own top class finance people drawn from the public and private sectors as well as trade unions to discuss these matters, if it even gets there.
This process is expected to be finalised over the following months.
I thank you.
Question 15 – Strengthening local government
Mr S S Somyo (ANC) to ask the President of the Republic:
Given that the 2021 Local Government Elections produced a scenario where we are confronted as a nation with 70 hung municipal councils, and noting that the history of our democratic local government, with a few notable exceptions, suggests that hung municipal councils tend to produce instability and become a significant threat to service delivery and compromise management of local government responsibilities, how can the Government create a predictable political and administrative interface and environment for communities under such councils to ensure that they enjoy stability, service delivery and regulatory accountability?
Reply
Honourable Members,
The current situation in local government – including the unprecedented number of councils where no party has an outright majority – is the product of a democratic process.
On the 1st of November, the people of South Africa freely and fairly, and in conditions of peace and stability, voted for the people and parties they want to represent them in municipalities.
This is the will of the people and we must accept it.
While there are certainly particular challenges associated with so-called ‘hung’ municipalities, these challenges are by no means insurmountable.
And while the country’s experience of coalition or minority government at a local level has not always been favourable, it is essential that we nevertheless make these councils work, for the sake of the people of these municipalities.
We must ensure that these councils provide the services that people need and create an environment conducive to the growth of businesses and the creation of employment.
Ultimately, this will depend on the political will, commitment and capabilities of the parties and individuals running these municipalities.
As national government, we are firmly committed to support all municipalities in ensuring that they fulfil their responsibility to the people they were elected to serve.
We will be establishing a Unit in the Presidency that will allow to have a closer focus on local government.
It is significant that on the same day that the local government elections were held, the Municipal Structures Amendment Act No 3 of 2021 came into effect.
The interventions that were introduced through these amendments will go a long way towards addressing many governance challenges that have been experienced by municipalities, and to ensure improved and sustained service delivery to all our communities.
The Amendment Act strengthened the Code of Conduct for Councillors and makes it mandatory for all municipal councils to establish Municipal Public Accounts Committees.
The purpose of these Committees will be to review various reports and thereafter make recommendations to the municipal council.
The Ministry of Cooperative Governance and Traditional Affairs, National Treasury and SALGA will, soon after all municipal councils have been constituted, embark on an intensive councillor induction programme.
This aims to ensure all our newly elected councillors, especially those who are serving for the first time, receive the appropriate orientation to effectively perform their duties as councillors, and where appropriate, the specific roles and responsibilities that are entrusted to municipal office-bearers, such as Speaker, Mayor, Executive Mayor or Whip.
We are confident that these interventions that we are making will help to strengthen governance at a local level.
However, the achievement of stable well-managed municipalities that provide quality services to all residents depends on effective collaboration between all political parties, all local stakeholders and the different spheres of government.
I thank you.
Question 16 – Renewable energy
Mr M P Galo (AIC) to ask the President of the Republic
In light of the United States of America, the United Kingdom, France, Germany and the European Union committing a total amount of R131 billion to boost the Republic’s renewable energy stream, and in view of the fact that he set up the Inter-Ministerial Committee on Energy and assesses the performance of energy line-function portfolios, how does he intend to realign the outdated Integrated Resource Plan 2010-2030 policy, which still places coal at 46% of the Republic’s energy security by 2030, in comparison to nuclear that is placed at 13% and wind at 11% of the Republic’s energy security by 2030?
Reply
Honourable Members,
The Integrated Resource Plan 2019 is the guiding document for energy supply planning between now and 2030.
In developing the IRP 2019, the energy planners take into account security of electricity supply, protection of the environment and the need to reduce carbon emissions.
The reduction of carbon emissions as envisaged in the IRP 2019 is aligned with the emissions trajectory in our updated Nationally Determined Contribution, which sets a target range for a reduction in our greenhouse gas emissions by 2025 and 2030.
It is projected that full implementation of IRP 2019, along with existing energy efficiency and green transport policies, will result in emissions in line with the revised Nationally Determined Contribution that we adopted prior to COP 26.
The IRP 2019 provides for the decommissioning of several old coal-fired power plants that have reached, or are nearing, their end-of-life.
The pace and scale of decommissioning coal-fired power stations will be determined by the need to maintain security of energy supply and the extent to which financial support for a just energy transition enables a higher level of ambition.
In terms of both the IRP 2019 and the revised Nationally Determined Contribution, coal will remain part of the energy mix beyond 2030 even as the share of renewable energy sources significantly increases. We therefore have to make this very clear to our international partners.
The Integrated Resource Plan is a living document that takes account of changing circumstances and the anticipated needs of the country into the future.
I thank you.
Question 17 – Preparing for a low-carbon economy
Ms V T Malinga (ANC) to ask the President of the Republic:
With reference to the agreement that he recently announced as confirmed at the meeting of the Climate Change Conference of the Parties 26 that the Republic will receive R131 billion in grants and loans from four countries to fund its transition from coal and to assist Eskom in speeding up its new energy generation projects,
(a) how will the agreement help Eskom deal with its current challenges and
(b) what measures will be put in place to ensure that the transition is just to the workers and communities who depend on the coal-fired power stations for their livelihoods?
Reply
Honourable Members,
A significant proportion of funding offered by the international partner group countries is expected to be used for Eskom’s just transition plans.
The shut down of coal stations must be accompanied by sufficient investment in new generation capacity as well as investment in the transmission network to promote energy security.
In particular, the funds will be utilised to support Eskom’s plans to repower and repurpose coal plants that are shutting down with renewables, battery storage and gas.
Eskom aims to add 8.5 gigawatts of renewable energy over the next 10 years, and will require international financial support for this investment.
This financing will not and cannot be used for financing the legacy debt.
The electricity sector contributes 41% to South Africa’s greenhouse gas emissions and is the quickest route to decarbonising South Africa with the greatest impact in the short term.
This process is an opportunity to build our industrial capacity and create new jobs.
We can maximise the impact of this new investment by ensuring that local inputs are used in construction, and by implementing strategies and incentives to encourage global players to localise their operations.
A transition to a decarbonised economy must also address the needs of workers in affected industries and communities.
Funding must be used for targeted programmes of reskilling and upskilling, creating employment and providing other forms of support to ensure workers, women and youth are the major beneficiaries of our shift to a greener future.
Eskom has already begin to work on a reskilling plan and has entered into cooperation agreements with the DTIC, the Manufacturing Circle, Sasol, Anglo, Exxaro and Seriti, to ensure among others, a collective drive to growing industrialisation and local manufacturing.
Eskom has commenced its first demonstration project for the just energy transition at Komati power station.
In addition to expanding capacity through solar, battery storage and gas, the Komati plans include opportunities for local community involvement in the agrivoltaics solution and the assembly of containerised microgrids.
The transition to a low-carbon economy and a climate resilient society holds enormous potential for economic growth, development and job creation in our country.
I thank you.
Question 18 – Support for Military Veterans
Mr T M Mmutle (ANC) to ask the President of the Republic:
(a)How far is the Presidential Task Team on Military Veterans in addressing the issues raised by the military veterans who took an unprecedented approach to highlight the challenges they are facing by holding members of the Executive hostage in Irene, Pretoria, on 14 October 2021 and
(b)what steps have been taken to respond to some of the immediate challenges raised by the military veterans?
Reply
Honourable Members,
During the course of 2020, the Presidency received several complaints about the perceived failure of the Department of Military Veterans to provide services to military veterans.
Furthermore, a group of marchers called the Liberation Struggle War Veterans marched to the Union Buildings on the 10th of November 2020 and presented a memorandum of grievances to the Presidency.
In response, I called for a high level briefing on the plight of military veterans, the support package that military veterans are entitled to as prescribed by the Military Veterans Act of 2011, as well as gaps and shortcomings.
Following this, I appointed a Presidential Task Team on Military Veterans, chaired by Deputy President David Mabuza, to engage with military veterans on their challenges and grievances.
Since its establishment in November 2020, the Presidential Task team on Military Veterans has held several consultative engagements with various military veterans associations and a number of inter-governmental stakeholders.
Progress has been registered on the following issues:
- The review of the Military Veterans Act is ongoing and expected to be taken for public comments in early 2022 and it is anticipated that the Amendment Bill will be tabled to Cabinet and Parliament in 2022. The amendment will deal among others with the definition of a military veteran, a policy shift towards the non-statutory force members, and the provision of health care, housing and burial benefits, where appropriate, to dependents and surviving spouses of military veterans.
- The process of restructuring the Department of Military Veterans has been initiated with the approval of the service delivery model and the development of a proposed structure.
- The proposed structure will be finalised upon the completion of the Amendment of the Bill to ensure that the reviewed structure supports the new mandate of the Department of Military Veterans. Provincial offices have been capacitated to assist military veterans at provincial level.
- A moratorium on applications for education support has been lifted and the Department of Military Veterans is now receiving and processing new applications.
- Consultations are underway on the costing and funding of the pension policy. The target date for payment is 1 April 2022.
- The Verification Panel continues with the verification of military veterans who are non-statutory force members. The total number of processed applications on 16 November 2021 was 2,549.
- The Department of Military Veterans has developed a Memorandum of Understanding with the Department of Sports, Arts and Culture and its agencies to assist with the repatriation of remains, erection of monuments in host countries and memorialisation of fallen heroes.
- The Department of Military Veterans is re-positioning its skills development and empowerment programme to ensure that military veterans participate in all government programmes that can create jobs and business and entrepreneurship opportunities.
The Department is forming partnerships with various SETAs and other state organs to assist with various skills development programmes.
The challenges faced by military veterans are many; they are complex and will require a common approach from all parts of government.
A society like ours, which owes its freedom to the sacrifices made by these gallant daughters and sons, must do everything it can to ensure that military veterans and their children are able to enjoy the fruits of the freedom that they have helped to bring about.
I thank you.
