Minister Gordhan got it wrong, here is why the DA is calling for a State of Disaster on Eskom and the energy sector
Note to Editors: Please find an attached soundbite by Ghaleb Cachalia MP
In his rush to quickly dismiss the DA’s call for a State of Disaster to be declared on Eskom and the energy sector in South Africa, the Minister of Public Enterprises, Pravin Gordhan, completely misses the point and assumes that our call is only motivated by fear of a grid collapse.
While concerns about a grid collapse are legitimate, the premise of the DA’s call for a State of Disaster on the electricity crisis is primarily focused on addressing the lethargic pace at which policymakers and regulators have approached this looming national emergency.
What Gordhan exhibited in his parliamentary reply was a complete dereliction of duty in that while he acknowledges the real prospect of stage 8 loadshedding, he won’t declare a state of disaster to avert a blackout that would imperil critical infrastructure and the economy.
Waiting for stage 8 to manifest before action is taken is reckless and places South Africans in danger from the fallout that would ensue from a total grid collapse.
Cabinet needs to reprioritise efforts to address this national emergency. At the bare minimum, must it focus on lowest cost, accelerated solutions to solve the crisis. This will require:
Creating specific timelines on all new and supplementary energy projects that have been approved thus far, and ensure their accelerated implementation and connection to the national grid;
Investigating without delay additional measures to mitigate the crisis in the short term while embedding sustainable medium and longer term solutions;
Lessen or remove the costly regulatory burden that is standing in the way of self-generation, especially at household level and in discrete industry environments;
Compelling NERSA to conduct its regulatory approach within an emergency frame to help lessen red tape and approve generation projects in shorter timelines;
Ensuring that South Africans are constantly provided with updates on project completion and costs on all current and future alternative and additional energy projects;
Ensuring budget reprioritization of resources from non-emergency expenditure items towards accelerated spending in energy generation projects.
South Africa will struggle to expeditiously address the loadshedding nightmare if the electricity ecosystem, comprising regulators and policymakers, is continually beset by lack of urgency in removing regulatory obstacles for Independent Power Producers (IPPs). Despite the dire state of our electricity generation capacity, South Africa should be making it easy, not difficult, for IPPs to bring new power at scale and in the shortest possible time.
Eskom CEO, Andre de Ruyter, has already revealed that:
There is potential to add 200MW of new capacity from existing IPPs but they were being constrained by contractual obligations which prevent them from feeding this into the grid regularly. It is scandalous that the IPP office has not amended these contracts to allow for uncapped supply to the grid, considering the negative impact that loadshedding is having on the economy.
Existing IPPs were also potentially able to add an additional 200MW to their existing generation capacity if they were allowed to expand their plant capacity. However regulatory decisions were standing in the way.
The Eskom Board approved a plan on the 3rd of August last year to enable private generators to make bids and supply power to the grid. However, Treasury, Mantashe’s DMRE and NERSA are yet to approve the plan.
There were onerous registration requirements for embedded or own generation players who produce electricity less than 100MW. These requirements are being kept in place by NERSA.
Stringent zoning and slow environmental impact assessment processes were impeding the progress of onboarding IPPs interested in leasing Eskom land in Mpumalanga.
The ANC government may be in denial but the reality is that South Africa is in the middle of an electricity emergency. Unless urgent steps are taken to remove existing red tape for IPPs, there is a high probability that South Africa could face another decade of continuous loadshedding.
Now is the time to put aside petty politics and galvanise the national effort towards finding a lasting and permanent solution to the prevailing national electricity crisis.
Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 6 May 2022
