Energy committee shifts focus as Eskom keeps the lights on

Energy transmission, market reform, municipal utilities and new energy generation will top the list of priorities for the second phase of the national energy crisis committee (Necom) as it seeks to ease power supply constraints and boost economic growth.

The revised priorities for Necom comes as Eskom power supply has been uninterrupted for more than four consecutive months due to reduced reliance on the utility. The energy availability factor is now above 60% compared to 54% in 2023. 

The priority areas were discussed and approved at a meeting between Business for SA (B4SA), the presidency and members of the executive on Tuesday, where updates on the formal partnership between organised business and the government were given. The partnership was established in 2023 to address the country's challenges in energy, logistics, crime and corruption that  have all been identified as serious constraints on growth. 

James Mackay, CEO of the Energy Council of SA, said the next phase of the partnership’s work will be on reforming the sector and accelerating the SA’s energy transition to reduce the economy’s reliance on Eskom to ensure competitiveness. 

A combination of an increase in private sector investment in renewable energy and work by Eskom will be led by energy minister Kgosientsho Ramokgopa and Necom, Mackay said. 

“There is are calls for good governance structures with solid terms of references ... and driving towards a rules-based transition where all parties can understand transparency. That creates confidence as to how we take forward this next phase of Necom,” Mackay told reporters on Wednesday. 

Mackay said a rules-based transition was required to ensure that Eskom wasn’t placed in a conflicted position. 

“The energy workstream was reported to have had the most impact, achieving a dramatic reduction in load-shedding, in collaboration with Eskom (more than 140 days without load-shedding so far this year), and significant grid capacity recovery (with more than 6GW of new generation capacity added) through investment in additional technical support and capacitation from 57 companies investing over 9,000 hours at five power stations,” the presidency and B4SA said in a joint statement after the meeting. 

“However, we still face multiple challenges, including rapidly rising electricity costs, unsustainable municipal utilities, complex market reform, a constrained grid with delayed expansion, and stalling investment in new generation.”

“Significant investment will be required for the energy sector reform over the next five to 10 years, and there was strong consensus that it is critical to pave the way now to address the challenges.” 

In transport and logistics, head of project management at the presidency Rudi Dicks said that while there was an increased improvement in the performance of Transnet’s rail division, the entity is still performing well below requirements to benefit the economy. 

Transnet Freight Rail is on track to ramp up volumes to 170-million tonnes in 2023/24 and to 193-million tonnes in 2024/25. That’s still below the required 200-million tonnes required to adequately see the economic benefits, particularly for major customers such as mining companies.

“Despite the significant efforts by the partners, there is broad acknowledgment that Transnet requires substantial interventions to improve performance to meet the needs of its customers and the market demand necessary for sustainable economic growth,” the statement reads. 

“The meeting agreed that the rapid implementation of structural reforms and strict adherence to the Freight Logistics Roadmap deadlines are crucial to facilitate the participation of and investment by the private sector to help address our national logistics challenges. 

“This is crucial to ensure that our commodities and manufactured products can be competitively sold into the local market and exported to meet demand. Resolving these issues will promote job retention and job creation.” 

maekot@businesslive.co.za