Picture: 123RF/VACLAV VOLRAB
Picture: 123RF/VACLAV VOLRAB

The entry of more players into the energy market should be prioritised to tackle the electricity crisis, DA spokesperson on mineral resources & energy Kevin Mileham said. 

Business Unity SA (Busa), the association representing organised business in SA, has also recently called for the government to implement urgent measures to encourage private sector participation in Eskom and the energy sector.

Mileham urged mineral resources & energy minister Gwede Mantashe to take immediate steps to address the worsening electricity crisis.

“With Eskom having announced stage four load-shedding, the minister must prioritise procuring alternative sources of electricity and opening the grid to independent power producers [IPPs]. Among the primary causes of Eskom’s problems is the fact that not a single generation unit at Kusile, which has taken eight years to build and cost approximately R200bn, is operational,” he said.

He said Mantashe missed an opportunity when the IRP was finally adopted to announce the easing of licensing requirements for entities generating less than 10MW; to give the required approvals, including to the City of Cape Town and several large mines, that want to be permitted to purchase directly from IPPs; and to ease the regulation of residential small-scale embedded generation.

“This fresh round of rolling blackouts comes on the back of an already shrinking economy and will further impact economic growth as we head into the festive season and the height of SA’s tourism influx,” Mileham said.

In a statement on Sunday, Eskom said a number of generating units were still out of service due to breakdowns. “Stage two load-shedding will be implemented from 9am until 11pm tonight. Load-shedding is required all day today to cater for further trips and to create capacity to replenish water reserves for our pumped storage schemes. Eskom will communicate if there is a change in the system during the day,” the power utility said.

Eskom, which supplies virtually all of SA’s power and is hamstrung by staggering debt, maintenance issues and design flaws at its new coal power stations Medupi and Kusile, had to resort to stage four load-shedding last week as a result of a shortage of capacity.

Eskom’s dire operational and financial situation is regarded as the greatest threat to SA’s finances. Its recent problems mirror the crises engulfing most state-owned entities. SAA, the struggling national carrier, was placed under business rescue last week.

The government recently released its Integrated Resource Plan (IRP), which maps out how the country will meet its energy needs to 2030. It envisions coal accounting for 43% of installed capacity, while wind and solar power will account for 33%. The IRP 2019 makes provision for significant rollout of renewable energy and storage, thus private players will have a bigger role to play.

However, much will depend on the successful break-up of Eskom. In October, public enterprises minister Pravin Gordhan said Eskom would be split up, leading to the establishment of a separate transmission company. The separation of the transmission entity from Eskom’s generation division is crucial in the drive to establish a competitive energy market.

phakathib@businesslive.co.za