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National Planning Commission proposes emergency measure...

Business Maverick

ENERGY REFORM

National Planning Commission proposes emergency measures to end SA’s power crisis

(Photo: Unsplash / Nishat Maliha)

The National Planning Commission has called on the government to immediately prioritise new power generation and scrap local procurement rules.

The National Planning Commission (NPC), which advises the government on long-term development and policy matters, has called for emergency measures to end rolling blackouts within three years.

The commission oversees the adoption and implementation of the National Development Plan (NDP), which has largely been gathering dust since it was adopted in 2012.

The original NDP had wide-ranging targets to be realised by 2030. One ambitious target was to grow the economy by at least 5% through, among other things, reducing the cost of regulatory compliance, increasing support to small businesses, and ramping up the government’s investments in public infrastructure to boost exports in mining, manufacturing, agriculture and agroprocessing. 

Among the NPC’s priorities is energy reform and it has called on the government to immediately prioritise new electricity generation that can be brought on to the grid. However, the rolling blackouts have arguably made the NDP’s targets unattainable. 

“The NPC has consistently emphasised that the goals of the NDP cannot be achieved without energy security. South Africa has suffered load shedding since 2008, which has, in turn, constrained many developmental policies and strategies,” the NPC, chaired by Minister in the Presidency Mondli Gungubele, said in a statement on Wednesday. 

But the NPC wants to turn the situation around with new energy reform proposals. 

The commission has called for 10,000MW of wind and solar power, and 5,000MW of battery storage to be built as an urgent priority. In some cases, this will require the circumventing or lifting of current regulatory requirements.

Some of the current regulations inhibit the swift generation of new electricity, calling for adherence to Black Economic Empowerment and local procurement requirements. 

The NPC said solar and wind power projects can be built rapidly within two to three years – if current regulations are relaxed. 

“For this to happen, the declaration of an ‘energy emergency’ is required that will make it possible to override some of the red tape that is preventing the acceleration of delivery of new generation capacity.”

Its proposals include the following:

  • The 100MW ceiling should be removed because Eskom’s grid code and grid connection authorisation process is sufficient to regulate this growing market.
  • Any National Energy Regulator of South Africa (Nersa) registration process that delays implementation of [renewable energy] projects should be scrapped and replaced with an online registration procedure for database purposes only.
  • Environmental and water use approvals must be streamlined to take advantage of the Renewable Energy Development Zone framework that allows for fast-tracking of approvals.
  • There must be a temporary exemption from local content requirements for the construction and commissioning of new generation and storage capacity due to come online in the next 36 months. In parallel, key stakeholders should reach a formal agreement that strikes a balance between short-term importation of components with the need for phasing in upstream industrialisation over the medium to long term.

The proposals relating to the 100MW ceiling and the easing of Nersa’s registration processes are significant. 

The 100MW reform, while gazetted, is still heavily restricted by red tape, with Nersa having imposed stringent conditions for registration and approval, such as localisation requirements. 

The requirements are so onerous that renewable energy projects cannot move ahead. Since August last year, when regulations changed, about four of 58 projects – mainly from the mining industry – have been registered.  

The NPC’s recommendations are not binding on the government. In fact, in the past, they have been largely ignored. 

Mineral Resources and Energy Minister Gwede Mantashe, through policy changes and implementation, has the power to procure new energy generation. DM/BM

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