A promise by Government to add between 4000 and 6000 megawatts to the grid over the next 24 months have highlighted an urgent need to rethink our efforts in ending the country’s energy crisis.
According to leading risk consultancy Riskonet Africa, the current strategy should be refocused on providing opportunities for growth in the sector, and not eliminating load shedding through a series of fixes or targeted relief measures.
The Minister of Electricity Kgosientso Ramokgopa says various renewal energy initiatives will add 4000 to 6000 megawatts to the total capacity of electricity generation over the next two years. This is intended to achieve peak capacity of 30 000 to 32 000 MW, when Eskom used to generate 35 000 MW two decades ago. However, the current power generation requirement to support a viable rate of economic growth in South Africa is to have 40,000 megawatts available. The current efforts to add 4000 to 6000 megawatts of capacity over the next two years are insufficient given the country’s needs.
“There is a clear correlation between the level of power generation and economic growth. Industries are compensating for the lack of reliable power delivery by protecting the production runs in place with temporary generation capacity,” says Principal of Strategic Risk at Riskonet Africa Volker von Widdern. “It would be illogical for industry to invest in expanded capacity when there is no certainty on the reliability of power delivery”.
According to Von Widdern, the solution is to look beyond temporary fixes and embrace alternative opportunities. “We are missing a strategic opportunity that targets power generation capacity of at least 40,000 megawatts, increasing to 60,000 megawatts of peak capacity in the next 5 to 10 years, not 30 years as suggested in the Integrated Power Plan. Opening the energy market will create infrastructure development opportunities and will improve the local investment climate substantially,” he adds. “The Minister’s plan should serve as a call to action to rework our strategy when it comes to the energy crisis,” says Von Widdern. . he adds.
Von Widdern says key to success will be a substantial new investment in both inland power plants where transmission capacity is in place, such as gas and mini nuclear power plants, combined with renewable energy sources such as solar, wind, and hydroelectric power for the coastal regions. to contribute to the grid and this expansion will require a strategic shift towards embracing and incentivising renewable energy projects, leveraging South Africa’s rich natural resources for sustainable power generation.
The wheeling power model facilitates the transfer of electricity from independent power producers directly to consumers through the national grid, bypassing conventional distribution channels, the approach can rapidly optimise power distribution, reduce transmission losses, and encourage private sector participation in the energy market, thereby enhancing the reliability of power delivery and supporting economic growth. The additional capacity can also be wheeled via local authorities to supplement their income.
Von Widdern says opening the energy market to greater competition and private investment is crucial for driving infrastructure development and improving the investment climate in South Africa.
“The government must implement policies that encourage both local and international investment in the energy sector, offering incentives for the development of renewable energy projects and supporting infrastructure. This includes easing regulatory constraints, providing tax breaks, and facilitating access to financing for energy projects. By liberalising the energy market, South Africa can attract the necessary capital and expertise to build a more robust, efficient, and sustainable energy infrastructure, ultimately leading to enhanced economic growth and energy security.”
