Progress on contingency plan: Government lifts cap on private power – and more measures against Eskom crime

An aerial view of the Khanyisa solar array at Gold Fields’ South Deep Mine in Johannesburg. Photo: Delivered

  • The government has finally lifted the permit threshold for private power generation, meaning solar and wind projects of any size can now be built without permits.
  • The National Energy Crisis Committee expects this to significantly accelerate private power supply.
  • In a report on its progress, Necom said a special session of the National Security Council will be called next week to deal with criminal syndicates and power plant sabotage.
  • For more financial news go to News24 Business front page.

As South Africa suffers from record load shedding, the National Energy Crisis Committee (NECOM) has reported on progress in implementing President Cyril Ramaphosa’s electricity contingency plan announced last year.

Recent developments include the government finally removing the permitting threshold for private power generation projects.

New legislation has been published to remove the 100 MW permitting threshold for these projects. This means that solar and wind projects of any size can be built without a permit.

Towards the end of 2021, the government increased the threshold from 10 MW to 100 MW.

Since then, private companies have started 100 projects that will bring more than 9,000 MW to the grid. Eskom’s entire fleet has a capacity of around 45,000 MW.

The first of these private-sector projects is scheduled to go online by the end of 2023. Necom believes that the recent lifting of the licensing threshold will “significantly” accelerate private investment.

Special security meeting

As outages at Eskom’s aging power plants are exacerbated by sabotage and crime, Necom also said Ramaphosa has directed law enforcement to step up efforts to protect power infrastructure.

A special session of the National Security Council will be called next week. The council will consider a report on efforts to stop criminal syndicates and power plant sabotage. To date, 67 cases of theft and fraud are pending at Eskom.

Necom feedback

Necom was convened by Phindile Baleni, Director General of the Presidency, and is made up of senior government officials from multiple departments, as well as representatives from Eskom.

Necom said progress on the power contingency plan included:

  • Before the end of the month, Eskom will launch a new program that offers financial incentives to electricity consumers who do not use electricity during peak periods. Details are not yet known, but the incentives are expected to be part of Eskom’s Demand Response program, which compensates large companies that are able to reduce their electricity consumption at peak times. A national campaign to promote electricity efficiency will also be launched this month.
  • A total of 162 MW of excess capacity was identified from existing independent power generators. Eskom plans to purchase up to 1,000 MW from private companies over a three-year period. The first contracts are expected to be signed in the coming weeks.
  • The government expects to launch a tender for new bids to set up battery storage projects soon. A similar request for gas power will follow by March 2023.

READ | The government is planning 3,000 MW of gas-fired electricity as part of the new energy push

  • New legislation creating an independent transmission and grid operator and a “competitive electricity market” has been finalized and will be submitted to Cabinet this month. This is part of Eskom’s move to spin off its transmission business.
  • Around 200 MW have been secured from neighboring countries since September last year, with a further 1,000 MW identified for 2023.
  • A “one-stop shop” will be set up as a central entry point for energy projects via Invest SA, South Africa’s investment promotion agency.
  • Eighteen specialists were brought back to Eskom, including three appointments from former Eskom employees as power plant managers in Kendal, Koeberg and Medupi. More than 1000 people offered their skills through Eskom’s crowdsourcing platform.

TO READ: If you have the skills to solve Eskom’s problems, here’s a new way to offer your services

A team of independent experts has also been formed to work with Eskom to diagnose the problems in underperforming power plants and take action to improve plant performance.

Under the supervision of Eskom’s new board, six power plants have been identified with particular focus in the coming months.

  • Progress has been made in reducing red tape for energy projects, including reducing the timeframe for environmental permits from over 100 days to 57 days; Reduction of the registration process from four months to three weeks; and ensure grid connection permits are granted within six months, Necom said.
  • Construction of 19 projects from Bid Window 5 and six projects from Bid Window 6 of the renewable energy program will begin shortly, representing 2800 MW of new capacity.
  • A new ministerial decision for 14771 MW of new generation capacity from wind, solar and battery storage has been released to speed up further bidding windows.

Diesel?

The contingency plan progress report did not cover the one immediate solution to reducing load shedding: solving Eskom’s diesel problem.

The cash-strapped utility doesn’t have enough cash for diesel to power its open-cycle gas-turbine plants, which provide backup power and reduce load shedding.

The Treasury did not budget for Eskom’s demands for more tax money for diesel. Eskom’s application for a permit to import its own fuel in order to be able to buy diesel at the base price of the fuel was also rejected by the energy department.

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