The complete energy response plan introduced by President Cyril Ramaphosa on Monday evening (25 July), which incorporates decentralising energy technology in the nation and accelerating the procurement of recent technology capability, has been met with optimism by varied stakeholders.
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“Over the next three months, Eskom will take additional actions to add new generation capacity to the grid on an urgent basis,” Ramaphosa mentioned. “As an immediate measure, surplus capacity will be bought from existing independent power producers.”
He added that the quantity of recent technology capability procured via Bid Window 6 of the Renewable Independent Power Producer Programme (Reippp) for wind and solar energy will likely be doubled from 2 600 megawatts (MW) to five 200MW.
And to allow personal funding in electrical energy technology to rise to increased ranges: “We will remove the licensing threshold for embedded generation completely.”
The president added that to encourage companies and households to spend money on rooftop photo voltaic programs, they’ll have the ability to promote surplus energy to Eskom.
Moves welcomed
The South African Wind Energy Association (Sawea) applauded the interventions, saying they’re the proper steps to create an open energy system that can appeal to extra funding, create jobs and profit the financial system.
“Sawea views the removal of the licensing cap for embedded generation projects as the next step to liberalising the energy market, but this only makes sense if this is indeed applied to larger projects with the ability to wheel power through the network,” it added.
Major personal sector consultant Business Unity South Africa (Busa) welcomed the plan, citing its hope for a centered and speedy implementation.
In an announcement, Busa mentioned it significantly welcomes the removing of the must licence embedded personal sector technology in addition to regulatory and pink tape blockages inside the scope of the regulation.
“The use of new pricing structures to incentivise a huge investment in commercial and household rooftop generation is also an extremely important new step, and comes in addition to Eskom procuring existing, surplus power from IPPs [independent power producers],” it added.
Busa CEO Cas Coovadia mentioned companies have indicated their readiness to assist fast-track the energy disaster interventions and look ahead to collaborating with the president’s National Energy Crisis Committee.
“While we encourage the urgency in beginning to implement these complex reforms, we recognise that patience and endurance will be needed. Getting rid of load shedding will take time.”
Coovadia mentioned a transparent execution plan, in opposition to strong deadlines and accountability for supply, is required – including that the nation and the enterprise sector will profit from common and clear progress experiences.
Enabling components
Martin Kingston, Business for South Africa (B4SA) steering committee chair, mentioned key enabling components should not be forgotten, together with fast funding in the transmission grid and the want for a standardised wheeling framework.
“While there are many areas of our economy that require urgent reforms – notably water security, logistics, infrastructure and crime – none is as critical as energy availability, which is needed to unblock economic growth, investment and jobs, which will put the country back on the path to success,” mentioned Kingston.
Business Leadership South Africa (BLSA) shared comparable sentiments: “BLSA has championed these types of interventions for a long time and recently, with other business organisations, submitted a detailed strategy to government to address the energy crisis, through Business for SA.”
It mentioned it hopes the measures will likely be applied with urgency, objective and transparency.
BLSA famous that it’s prepared and prepared to help in driving the implementation of the new energy motion plan. “There’s lots of work ahead but we believe that we are finally moving in the right direction.”
On board
The Nelson Mandela Bay Business Chamber reported that it has already established a renewable energy cluster meant to consolidate the electrical energy necessities of a few of the largest producers in the area.
“Although our initial focus lies with high energy industrial users, we foresee that this initiative could, in the longer term, also benefit mid-sized manufacturers, shopping malls, hotels, and eventually small businesses and residences,” it mentioned, including that this would cut back the pressure on the nationwide grid.
Professor Raymond Parsons of the School of Business & Governance at North-West University in Potchefstroom, described the plan as a tipping level in shifting the nation’s energy challenges.
However, he mentioned it will have been useful if extra particular timelines for sure initiatives and outcomes had been set out. “The present plans still seem to fall short of the previous commitment that 30% of the electricity grid should eventually be in the private sector.”
At the macro-level, the plan may assist underpin the restoration in personal mounted capital formation which has change into obvious in latest months, he added.
“If tangible outcomes from the latest electricity plan soon manifest themselves, it could boost investor confidence in ways that could significantly raise private fixed capital formation as a percentage of GDP growth in the years ahead.”
Nondumiso Lehutso is a Moneyweb intern.