Progress on crisis plan: Government lifts cap on private power and more action against Eskom crime

Aerial view of the Khanyisa solar plant at Gold Fields’ South Deep mine in Johannesburg. Photo: supplied

  • The government has finally lifted the licensing threshold for private power generation, meaning solar and wind projects of any size can now be built without a licence.
  • The National Energy Crisis Committee hopes that this will significantly accelerate private energy.
  • In a progress report, Necom said a special meeting of the National Security Council will be called next week to address criminal syndicates and sabotage at power plants.
  • For more financial news, go to News24 company front page.

As South Africa suffers record load shedding, the National Energy Crisis Committee (Necom) has reported on progress in implementing President Cyril Ramaphosa’s electricity crisis plan, which was announced last year.

The latest developments include that the government has finally lifted the licensing threshold for private power generation projects.

New legislation has been published to remove the 100MW licensing threshold for these projects. This means that solar and wind projects of any size can be built without a license.

Towards the end of 2021, the government increased the threshold from 10 MW to 100 MW.

Since then, private sector companies have launched 100 projects that will contribute more than 9,000 MW to the grid. The entire Eskom fleet has a capacity of about 45,000 MW.

The first of these private sector projects should be connected to the electricity grid by the end of 2023. Necom hopes that the recent removal of the licensing threshold will “significantly” accelerate private investment.

Special security meeting

As breakdowns at former Eskom power stations worsen due to sabotage and crime, Necom also said Ramaphosa has instructed law enforcement to step up efforts to protect power infrastructure.

A special meeting of the National Security Council will be called next week. The council will consider a report on efforts to stop criminal syndicates and sabotage at power plants. So far there are 67 cases on the court record for theft and fraud at Eskom.

Necom report

Convened by Phindile Baleni, the Director General of the Presidency, Necom is made up of senior government officials from various departments, as well as representatives from Eskom.

Necom said progress with the power crisis plan included:

  • Before the end of the month, Eskom will launch a new program that will offer financial incentives to electricity users who do not use power during peak hours. No details are yet available, but the incentives are expected to be part of Eskom’s demand response programme, which compensates large companies that can reduce their energy use at peak times. A national campaign to promote energy efficiency will also be launched this month.
  • A total of 162 MW of excess capacity from existing independent power producers has been identified. Eskom plans to buy up to 1,000MW from private companies over three years. The first contracts are expected to be signed in the coming weeks.
  • The government hopes to soon launch a request for new bids to set up battery storage projects. A similar application for gas power will follow in March 2023.

READ | The government plans 3,000 MW of gas-fired electricity as part of the new push

  • New legislation to establish an independent transmission and system operator and a “competitive electricity market” has been finalized and will be presented to Cabinet this month. This is part of Eskom’s decision to spin off its transmission business.
  • Since September last year, around 200 MW have been obtained from neighboring countries and another 1,000 MW have been identified for 2023.
  • Designated local content for solar panels has been reduced from 100% to 30%.
  • Through Invest SA, South Africa’s investment promotion agency, a ‘one-stop shop’ is being established as a single entry point for energy projects.
  • Eighteen specialists have rejoined Eskom, including three appointments of former Eskom employees as power plant managers in Kendal, Koeberg and Medupi. More than 1000 people have offered their skills through Eskom’s crowdsourcing platform.

TO READ: If you have the skills to help solve Eskom’s problems, here’s a new way to offer your services

A team of independent experts has also been set up to work with Eskom to diagnose problems at underperforming power plants and take steps to improve plant performance.

Six power stations have been identified for special focus over the coming months, with oversight from Eskom’s new board.

  • Progress has been made in reducing the bureaucracy of energy projects, including reducing the deadline for environmental authorization to 57 days from more than 100 days; reduce the registration process from four months to three weeks; and ensuring grid connection approvals are provided within six months, Necom said.
  • Construction will soon begin on 19 projects from the bidding window 5 and six projects from the bidding window 6 of the renewable energy program, representing 2800 MW of new capacity.
  • A new ministerial determination has been published for 14,771 MW of new generation capacity from wind, solar and battery storage to accelerate new tender periods.

Diesel?

The progress report on the crisis plan did not cover the only instant solution to reduce loadshedding: solving Eskom’s diesel problem.

The financially strapped utility doesn’t have enough money for diesel to run its open-cycle gas turbine plants, which provide emergency electricity and reduce load shedding.

The Treasury has not accommodated Eskom’s demands for more taxpayer money to pay for diesel. Eskom’s application for a license to import its own fuel so that it can buy diesel at the basic fuel price has also been rejected by the energy department.

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