Gwede Mantashe missed a golden opportunity to revitalise our electricity sector. When he announced the IRP, the minister should have taken the time to demonstrate his willingness to be bold, decisive and constructive in ensuring South Africa’s energy security. There were four distinct steps that should have been announced, but weren’t.
First, the minister should have walked away from the pipe dream that is the Grand Inga project. South Africa signed an agreement with the Democratic Republic of the Congo in 2013 to take up at least 2500MW from the project (roughly 5% of South Africa’s installed capacity), at an estimated cost in excess of R200-billion. But Inga 3, the dam intended to supply this electricity, has been stalled since the 1990s. Now the Congolese government are looking to scale down the project and the Chinese-Spanish consortium that was awarded the construction contract, are at loggerheads. And apart from the construction challenges, there are transmission issues too: to get the power to South Africa, the power lines would have to cross thousands of kilometers of foreign soil and be subject to the vagaries of various threats. We recently saw the impact of weather on the Cahora Bassa power lines, which resulted in extended rolling blackouts earlier this year. Rather than standing guarantor for this unlikely source of power, South Africa should be investing in domestic power production.
The second thing Mantashe should have done is to immediately open up Bid Window Five for renewable electricity independent power producers (IPPs). Renewable energy has been identified as the quickest and one of the lowest cost solutions to South Africa’s electricity supply gap – the shortfall between supply and demand that has arisen because Eskom’s aging power plant fleet can no longer meet the needs of our people, and our economy. Various reports indicate that the supply of electricity from new renewable energy IPPs could be brought online in two years, compared to the lengthy build time for other types of power plants. Renewables also address our commitment to reducing our carbon emissions, something Eskom is fundamentally incapable of doing.
Earlier this week, Mantashe told the Portfolio Committee on Mineral Resources and Energy that renewables would not be given preference over other forms of new generation. “When we open applications for new generation, everybody will be able to bid for that, including renewable producers,” he said.
Sadly, Mantashe seems to regard anyone who proposes renewables as a potential solution as a “lobbyist” for foreign technologies and companies intent on destroying South African jobs. Nothing could be further from the truth. This is not about “killing Eskom” or destroying our coal industry. The reality is that our country needs electricity to ensure economic growth. We need foreign investment to help create employment. We need to clean up our polluted atmosphere – especially in Mpumalanga. We need quick fixes, at affordable prices – something renewable energy IPPs can assist with. Mantashe’s ideological and union-based opposition to opening Bid Window Five is counter-productive. The stop-start process that has been followed to date has seen component manufacturers go into liquidation and investors pulling out.
Third, the IRP highlights the decommissioning of the Grootvlei (1120MW nominal capacity), and Komati (904MW nominal capacity), coal-fired power stations in 2020. Both plants are past their projected lifespans. But, in both cases, they have among the highest availability factors of the entire Eskom fleet at 89% and 87% respectively. Mantashe should have proposed further life extension measures to keep these plants active in the short term, to ameliorate the shortfall in electricity supply from the other Eskom plants.
Last, we would have expected Mantashe to make two significant regulatory announcements. The first would be a ministerial determination to allow those municipalities which have the technical ability and financial resources to purchase electricity directly from IPPs. This falls under Section 34 of the Electricity Regulation Act and is a direct responsibility of the minister. His (and his predecessors’) failure to do so has resulted in the City of Cape Town taking the minister and the Department of Mineral Resources and Energy to court to force him to act – wasteful expenditure that could be avoided if Mantashe was prepared to work in the best interests of the country, rather than kowtow to the unions and failed ANC ideology.
The second pronouncement that would assist our beleaguered electricity sector would be to ease the regulatory and registration requirements on small-scale embedded generation systems. This would need to be done in conjunction with the National Energy Regulator of South Africa (NERSA), but the announcement and commencement of a dialogue in this regard would incentivise more South Africans to invest in off-grid and grid-tied solutions and thereby relieve some of the demand on Eskom.
Mantashe’s failure to seize the moment has long-term consequences for South Africa. Instead of opening our grid to competition and ensuring energy security from a domestic perspective, he has defaulted to the status quo, and we are left marking time, waiting for Eskom to switch the lights off. Again. DM
Kevin Mileham MP is the DA Shadow Minister of Mineral Resources and Energy