Progress with crisis plan: Govt lifts cap on private power – and more action on Eskom crime

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An aerial view of the Khanyisa solar plant at Gold Fields' South Deep mine in Johannesburg. Photo: Supplied
An aerial view of the Khanyisa solar plant at Gold Fields' South Deep mine in Johannesburg. Photo: Supplied
  • Government has finally lifted the licensing threshold for private power generation, which means that solar and wind projects of any size can now be built without a licence.
  • The National Energy Crisis Committee expects this will significantly accelerate private power.
  • In a report about its progress, Necom said that a special meeting of the National Security Council will be convened in the next week to address criminal syndicates and sabotage at power stations.
  • For more financial news, go to the News24 Business front page.

As South Africa suffers record load shedding, the National Energy Crisis Committee (Necom) has reported back on progress with implementing President Cyril Ramaphosa's power crisis plan, which was announced last year.

The latest developments include that government has finally lifted the licensing threshold for private power generation projects.

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

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

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

The first of these private sector projects should connect to the power grid by end-2023. Necom expects the recent removal of the licensing threshold will "significantly" accelerate private investment.

Special security meeting

As breakdowns at Eskom's ageing power stations are worsened by sabotage and crime, Necom also said that Ramaphosa has instructed law enforcement agencies to ramp up efforts to protect electricity infrastructure.

A special meeting of the National Security Council will be convened in the next week. The council will consider a report on efforts to stop criminal syndicates and sabotage at power stations. So far 67 cases are on the court roll for theft and fraud at Eskom. 

Necom report-back

Convened by Phindile Baleni, the director-general in the Presidency, Necom comprises top government officials from several departments as well as Eskom representatives.

Necom said that progress with the power crisis plan included:

  • Before the end of the month, Eskom will launch a new programme that will offer financial incentives to electricity users who don't use power at peak times. No details are available yet, but the incentives are expected to be part of Eskom's Demand Response Programme, which compensates large companies who can reduce their power use at peak times. A national campaign to encourage electricity efficiency will also be launched this month.
  • A total of 162 MW of surplus capacity has been identified from existing independent power producers. Eskom plans to buy up to 1 000MW from private companies over three years. The first contracts are expected to be signed in coming weeks.
  • Government expects to launch a request for new bids to establish battery storage projects soon. A similar request for gas power will follow by March 2023.

READ | Govt plans 3 000MW of gas-fired electricity as part of new power push

  • New legislation to establish an independent transmission and system operator and a "competitive electricity market", has been finalised and will be submitted to cabinet this month. This is part of Eskom's move to split off its transmission business.
  • Some 200MW has been secured from neighbouring countries since September last year, and a further 1 000 MW has been identified for 2023.
  • Designated local content for solar panels has been reduced from 100% to 30%.
  • A "one stop shop" is being established as a single entry point for energy projects through Invest SA, South Africa's investment promotion agency. 
  • Eighteen specialists have been brought back into Eskom, including three appointments of former Eskom employees as power station managers at Kendal, Koeberg and Medupi. More than 1000 people have offered their skills through Eskom's crowdsourcing platform.

READ : If you have the skills to help fix Eskom's problems, here's a new way to offer your services

A team of independent experts has also been established to work with Eskom to diagnose the problems at poorly performing power stations and take action to improve plant performance.

Six power stations have been identified for particular focus over the coming months, with oversight from the new Eskom board.

  • There has been progress in cutting red tape for energy projects, including reducing the timeframe for environmental authorisations to 57 days from over 100 days; reducing the registration process from four months to three weeks; and ensuring that grid connection approvals are provided within six months, Necom said.
  • Construction will soon start on 19 projects from Bid Window 5 and six projects from Bid Window 6 of the renewable energy programme, representing 2800 MW of new capacity.
  • A new Ministerial determination has been published for 14771 MW of new generation capacity from wind, solar and battery storage to accelerate further bid windows.

Diesel?

The crisis plan progress report did not cover the one instant solution to lower load shedding: solving Eskom's diesel problem.

The financially-stricken utility doesn't have enough money for diesel to run its open-cycle gas turbine plants, which provide emergency electricity and reduce load shedding.

Treasury has not budged on Eskom's demands for more taxpayer money to pay for the diesel. Eskom's application for a licence to import its own fuel so that it could buy diesel at the basic fuel price, has also been rejected by the energy department.

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