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JEREMY MAGGS: In the weekly president’s [Cyril Ramaphosa] letter, it’s claimed that after a year since launching the Energy Action Plan [EAP] to resolve the load shedding crisis, there has been significant progress in several areas. So my question is, is that entirely accurate?
So let’s turn to energy analyst now, Hilton Trollip. Hilton, a very warm welcome to you. So as you watch this, what key steps have been taken in this plan, and do you accept the fact that there has been significant progress?
HILTON TROLLIP: Good afternoon, Jeremy. Thanks for inviting me to share my analysis. I’m sitting here with the president’s letter in front of me. He says, we are now able to report significant progress. His next sentence is, today we are releasing a detailed report. I have searched everywhere, no such report. I do boring things that scientists do. I then read word by word through these kinds of things, and I look for facts.
So the government announced, the president announced an action plan last July. In January, they gave us a very good report on progress in the action plan, which mainly had a whole lot of plans.
If you read through the president’s letter, one would expect that his speech writer would’ve found every tiny little thing significant that has been added to the grid. I’ve found one action that’s been done.
The rest remains, it’s a plan-plan. They’re going to do things. They were going to do a whole lot of stuff last July. They were going to do a whole lot of stuff in January, and they’re still going to do a whole lot of stuff. The only significant thing that government has done, or a government entity, Eskom has found close to 400 megawatts from companies with extra capacity.
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The rest is all still plan, plan, plan, plan, future, future promise, promise and so on. Except for the other big area where there’s been a lot of progress, remember the president through his Operation Vulindlela twisted Gwede Mantashe’s [Minister of Mineral Resources and Energy] arm, according to Gwede, in other words, forced him to exempt private buyers of independent power, those IPPs from needing licenses.
As we know, there has been a storm of private IPPs onto the grid, a pipeline of ten gigawatts of projects.
So what the government has done is it’s unleashed the private sector to look after itself and I’m so glad that it is. I do want to point out a problem though, we have a public power sector, and it needs to balance the supply on the public grid. The private sector has rushed in to buy lots of PV, photovoltaics. That’s during the day.
Storage
We need a balanced supply. We need storage.
The private sector will make sure it’s got storage for its own operations, batteries and so on. But at nighttime, unless we have lots of wind to balance the PV, which happens most of the year, by the way, it’s very seldom that the wind isn’t blowing, and the sun is not shining.
Unless the public sector comes to the party, and the only way that can happen is Gwede Mantashe’s department has to implement the Renewable Energy Independent Power Producer Programme [Reippp].
Bid Window 6 was a failure, Bid Window 5 is in trouble. Bid Window 7, announced for the end of March initially, hasn’t happened, then it was announced for the end of July. Today is August 1. That’s Gwede Mantashe’s brief.
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JEREMY MAGGS: Hilton, let me ask you this question. Given that government cannot abrogate all responsibility for power generation to the private sector. In terms of this Energy Action Plan, after 12 months what then should have construed some kind of significant progress, to use the president’s words?
HILTON TROLLIP: Thanks for that excellent question, Jeremy. What should have happened is the Department of Mineral Resources and Energy should have done two things. One, it should have had another bid window, but that bid window would need to cooperate hand in glove with Eskom, which supplies the grid capacity for the independent power producers.
So why Bid Window 6 failed was that what happened is while it was running, the licencing requirement was lifted and the private sector, because it moves fast, took up a lot of the capacity, but there’s still lots of capacity on the grid.
So what has to happen, what should have happened between last July and today, Gwede Mantashe’s department should have invited another bid round, bid round seven, but they should have dealt with the problems that they experienced in bid round six.
Jeremy, I can tell you, we got ten gigawatts of the private sector just jumping onto the system. They lined up with finance and projects.
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They would also quickly take up a public sector programme, and there we can say what has to go on there, storage, wind, possibly some extra gas-fired peakers and so on, for a balanced system. But on Gwede Mantashe’s version, he told this to an ENCA interview, I listened with my own ears, not reported, [to Thulasizwe Simelane] on ENCA last year, Gwede Mantashe said the president can do renewables.
Although he is the only person that can do it in terms of the National Energy Regulator Act, he’s the only person powered to do it. He hasn’t, and that is the fly in the ointment.
JEREMY MAGGS: Hilton, just one final brief answer, if you don’t mind. The president also alludes to the return to service of units at the mega power stations, Kusile and Medupi. Could this be construed as significant progress? Is that going to impact more positively the overall capacity of the grid, do you think?
HILTON TROLLIP: It will, if it’s successful, Jeremy.
JEREMY MAGGS: And you have doubts?
HILTON TROLLIP: No, I don’t really have doubts, but if you go on past performance, there are challenges. So the organisation that’s doing that is Eskom. Eskom is beleaguered by corruption, mismanagement and morale problems. On their own version too, because of what’s happened there over the past ten years. So we are seeing a lot of problems. I’ve gone into this in depth with other interviews, but Eskom is battling to manage big projects.
Remember, the Kusile units being offline to start with, is that they built Kusile and it broke down immediately. It was a big chimney failure.
So the same people who built something that broke just after it was finished, seven years late, are busy fixing it, and I really wish them the best of luck. I hope we’ve got the best engineers we can find in the world there. But if you were the best engineer in the world, would you go and pitch up at Kusile if you’re going be pushed around by a whole lot of cadre deployment people and corruption and, and, and, and if you just step out of line a bit too much, get attacked from the outside by high-level politicians and fired.
JEREMY MAGGS: Always appreciate the blunt assessment, Hilton Trollip, thank you very much indeed.
