SA needs policy certainty on energy mix to attract investment - Treasury official

Treasury supports an energy mix that includes coal, nuclear, gas and renewables - but there must be policy certainty from government on the future energy plan, a Treasury official has said.

Treasury Deputy Director General Anthony Julies was one of the speakers at a panel discussion about gas and renewable energy's role in the Integrated Resource Plan (IRP) at the EnergyWeek: South Africa conference.

The conference is being held in Cape Town over two days this week.

In his opening remarks, Julies said having an energy mix in South Africa was important and inevitable. "There will be coal, there will be nuclear, there will be all kinds of renewables.

"That is the way of the future," he said.

Coal however, won't be as dominant as it is now. Treasury has made provision – about R200bn – on its "books" for renewable energy.

But Julies noted there had been a lack of policy certainty. "We can't have conflicting messages by government. It creates uncertainty," he said.

To create a favourable environment for investment, the energy plan of the future must be clear, he explained.

Sakkie Leimecker, head of energy at Nedbank Corporate Investment Banking, echoed views that the private sector had been waiting for the IRP to be delivered in order to provide the certainty needed for investment. He said major delays in policy undermined investor confidence.

Clear roadmap

Percy Langa, SHEQ manager at the Richards Bay Industrial Development Zone, argued that government needed to provide a clear roadmap, with everyone in sync. But this has not been the case, as there have been disagreements on pricing and skills in the energy space.

"We need national policy to be clear," he said, echoing Julies' views. He called for clarity on timelines and funding.

Nomfundo Maseti, full-time regulator member of the National Energy Regulator of SA (Nersa) also shared views on policy, saying implementation was important.

If there are policy changes to the IRP, then this should be done in a "predictable, transparent" manner, he argued, so that investors know to what extent they can come forward with their projects. 

Julies' message to President Cyril Ramaphosa was a reminder that he was deputy president when private sector participation was approved, and to set up reasonable and deliverable targets that those responsible would be held accountable for.

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