Load shedding has caused much pain, affecting social needs, economic development and South Africa’s economic growth aspirations. Energy availability is a major enabler for building a sound economic development trajectory.

As such, the moves by the Department of Mineral Resources and Energy to procure an emergency risk mitigation of 2,000MW of power is a step in the right direction. The position of the South African fiscus does not allow the state to provide capital investments required to fund the national power utility. Therefore, the public-private partnerships offer a unique value proposition for solving the energy crisis.

It is thus important to commend the progress that has been made in the energy policy development to date. The emergency procurement mix demonstrates that there is a pool of readily available technologies that can generate much-needed power in South Africa. All at once, three liquefied natural gas powerships with solar, wind and batteries were awarded preferred bidder status.

The powerships will be located along the coast in the Eastern Cape, KwaZulu-Natal and the Western Cape.

The preferred bidders for emergency power are Acwa Power Project DAO, Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, Mulilo Total Coega, Mulilo Total Hydra Storage, the Oya Energy Hybrid Facility and Umoyilanga Energy.

Additionally, three eligible bids totalling 150MW have been considered for preferred bidder status. However, these can only be confirmed after a value-for-money evaluation has been concluded as well as the capacity threshold rankings. This will bring the risk-mitigation independent power producer procurement to nearly 2,000MW. Moreover, according to Energy Minister Gwede Mantashe, the eight awarded projects will result in a R45-billion investment in the South African economy.

Furthermore, in the next 12 months the department will proceed with the accelerated roll-out as per the Section 34 Ministerial Determinations that the National Energy Regulator of South Africa agreed to in 2020. This means 11,813MW would be procured from a range of technologies: 4,800MW of wind, 2,000MW of solar PV, 1,500MW of coal and 3,000MW of gas, while battery storage would be allocated 513MW. 

Bid window 5 under the Independent Power Producer Procurement Programme was declared open from 19 March 2021. It aims to procure 2,600MW (1,600MW wind and 1,000MW solar PV).

Again, without a doubt, this is a step in a good direction for the country’s economic recovery. Nevertheless, it is also critically important to note that these are not overnight solutions; it is going to take time for these projects to reach financial close, construction completion and commissioning. Our funding institutions are cognizant of the country’s energy crisis and we can only hope that there will not be further delays.

What does this mean for someone who is excluded from the mainstream economy or someone who is unemployed? Does this mean the R45-billion investment is likely to have an impact on ordinary South Africans?

The announcement will most certainly have positive economic spinoffs from the economic development criteria, which are allocated a 30% weight when bids are submitted. This will further ensure that these investments offer a long-term socioeconomic impact for ordinary South Africans, hence this is a step in a good direction. The average local content would be about 50% during construction. Moreover, 51% of South African entities will participate in these projects and 41% of entities embody black ownership.

South Africa can only build and rejuvenate economic recovery from sound policies that are carefully executed. Likewise, this will also be supported by the distributed generation that the minister announced. This means we are likely to see accelerated self-generation from commercial and industrial energy users. This will further reduce the energy demand pressure that our national power utility has encountered lately.

The continued energy transition is inevitable and we must ensure that maximised benefits are derived from the ongoing energy development for ordinary South Africans. Moreover, it is important to ensure the transition is just and inclusive. These principles need to be carried through as we embark on the economic recovery journey – no one should be left behind. DM