South Africa needs to instill confidence in Eskom's ability to provide reliable power so that President Cyril Ramaphosa's efforts to entice investment is not undermined, says Energy Minister Jeff Radebe.
Radebe delivered the keynote address at the Africa Energy Indaba 2019 at the Sandton International Convention Centre on Tuesday morning. He spoke on Eskom, carbon emissions and the new dynamics facing SA's energy sector.
The minister said that while South Africa has acceded to the Paris Agreement that seeks to diminish greenhouse gas emissions, SA cannot ignore that the country has abundant reserves of relatively cheap coal.
"While a paradigm shift is required for these emission reduction targets to be realised, as government we cannot do this in a manner that is unjust relative to those that would be negatively affected by these adjustments," he said.
"Our vast coal deposits cannot be sterilised simply because we cannot exploit technological innovations ... The timing of the transition to a low carbon economy must be in a manner that is not insensitive to the potential impacts on jobs and local economies."
New generation capacity
Radebe says that SA must invest in new generation capacity to replace aging power plants, as Eskom faces the problem of deteriorating plant performance driven by old infrastructure.
"This happens at a time when Eskom’s balance sheet is at its weakest in a long time. That is our reality in South Africa, and I am sure there are parallels in other African countries as well."
The power utility is R420bn in debt, and does not make a profit from selling electricity at current prices. Finance Minister Tito Mboweni will on Wednesday provide on update on government plans to shore up Eskom's balance sheet when he delivers his maiden Budget in Cape Town.
Radebe lauded the success of government's Renewable Energy IPP Programme, which seeks to build up the country's renewable energy capacity to help alleviate electricity shortfalls and cut greenhouse gas emissions.
Clean energy – mainly solar and wind – now contributes 4.5% to SA's energy mix, he said.
The introduction of Independent Power Producers has been criticised by some unions, who say renewable energy would lead to job losses in the coal sector and make energy more expensive for consumers.
The National Union of Metalworkers of SA (Numsa), for example, has called the IPP programme "disastrous".
Hydropower from the DRC
Radebe focussed specifically on the generation potential of the Grand Inga Hydropower Project in the DRC.
"Since the granting of a concession to the Sino-Spanish consortium developing the hydropower project, commercial negotiations will commence to procure power from Phase 1 of the Grand Inga Hydropower project," he said.
Radebe said the project had the potential to provide up to 13 000 megawatts of clean energy to SA. This, by comparison, would be more than the combined output of the Medupi and Kusile coal-fired power stations.
He did not say how far advanced negotiations were or when SA expects to start receiving electricity.
"The potential is huge for various economic spin-offs to be harnessed from the project," he added.