Stabilise Eskom, cut red tape and increase private sector participation
Tonight, I want to address you about the energy crisis that is confronting our nation.
This is a call for all South Africans to be part of the solution; to contribute in whatever way they can to ending energy scarcity in SA.In the past 10 days, I have held extensive discussions with the Eskom executive management, power station managers and former Eskom personnel. The construction of our newest power stations, Medupi and Kusile, started late and they have experienced several delays and some design flaws.As a result of this, Eskom deferred essential maintenance to keep the lights on, which is causing breakdowns and failures now.
The factors that led to the latest load-shedding included a number unit breakdowns at some power stations. While these actions to stabilise electricity generation have brought relief from the current load-shedding, the system remains vulnerable and unreliable.It deters investment and reduces our economy’s competitiveness.
A further 2,600MW of capacity has been procured through Bid Window 5, which will begin to add capacity from early 2024. This measure enabled these generators to have the ability to sell electricity to one or more customers, such as factories, mines or data centres.A number of municipalities are already in the process of doing so.
It is now been decided that over the next 12 months, Eskom will increase the budget allocated for critical maintenance to increase the reliability of its generation capacity. As part of addressing the shortage of megawatts, Eskom will now also purchase additional energy from existing private generators such as mines, paper mills, shopping centres and other private entities that have surplus power.
Eskom will implement a programme that encourages efficient energy use by consumers to reduce demand at peak times.The debt continues to be a huge burden on Eskom’s ability to address its many challenges.The minister of finance will outline how government will deal with this matter in an effective manner when he presents the Medium-Term budget Policy Statement in October.
A number people have been arrested in recent days and several others are already being prosecuted for corruption and fraud involving Eskom contracts. The department of trade, industry & competition together with the Independent Power Producers Office will provide further details in this regard within the coming days.
To ensure effective planning, the country’s Integrated Resource Plan is being reviewed to reflect the need for additional generation capacity and our climate commitments.Last year we announced the raising of the licensing threshold to 100MW. The process, from design to commercial operation, has tended to take more than three years due to lengthy regulatory processes and red tape.
We will in the meantime waive or streamline certain regulatory requirements where it is possible to do so within existing legislation. I have instructed departments and entities to review all existing time frames and to ensure we process all applications on an urgent basis. There is significant potential for households and businesses to install rooftop solar and connect this power to the grid.
Finally, we are fundamentally transforming the electricity sector and positioning it for future sustainability. These changes will allow more generators, both private and state-owned, to compete on an equal footing.Eskom will continue to be the mainstay of our country’s energy industry as we improve its efficiency, financial sustainability and performance.
The relevant Ministers will report to me directly on a regular basis to ensure that we move quickly to implement these actions.The measures I have outlined are not just to address our immediate constraints. This includes urgent implementation of the Eskom Social Compact and reinforcing the commitments and concrete steps to be taken by all social partners.