Categories: IPP, IRP

by Peter

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Categories: IPP, IRP

by Peter

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Why are we being kept in the dark on dealing with load shedding, and where is the urgency Mr President?

Where are the bold steps that were promised in December 2019? Why is the ANC blocking municipalities from purchasing directly from Independent Power Producers (IPPs), and the opening of the grid? Why did Minister Gwede Mantashe not raise the limit for exemptions from licensing of generation from 1MW to 10MW? Where is the negotiation with existing IPPs to take up excess supply? And why, in the name of all that is good, have we not opened REIPPP Bid Window 5 yet?

Dear Mr President,

Your letter “From the Desk of the President” of 28 September rightfully acknowledges the impact load shedding – or let’s call it what it really is: rolling blackouts – has on the lives of every South African.

From the economy, which according to some estimates loses R1-billion per day for every stage of load shedding, to the hospitals, which cannot perform surgeries or keep ventilators operating, to schools, which cannot teach and pupils who cannot learn. These are just a few of the real-world impacts of the failure of the state-owned electricity utility, Eskom.

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To the government’s credit, there have been some positive developments of late. A request for proposals (RFP) was at long last issued for the Risk Mitigation Power Procurement Programme on 20 August 2020 – eight long months after the rolling blackouts peaked at Stage 6 in December 2019.

Do you remember your commitment at the time? You undertook to fill the short-term electricity supply gap by prioritising power producers who could come online within three to six months of approval. Did you forget to send that message to your Minister of Mineral Resources and Energy, Gwede Mantashe?

Concurrence was granted by the National Energy Regulator of SA (Nersa) on 25 May 2020. He delayed issuing the RFP, and when he did eventually do so in August, the timeframe specified that producers must be online by June 2022. Hardly “three to six months”, I am sure you will agree. It’s also not the “technology agnostic” solution you promised back then: this RFP seems designed to fit a small number of producers (possibly only one), at high cost to the South African consumer and economy.

And, yes, at long last the minister has gazetted the ministerial determination for procurement of electricity generation in terms of the Integrated Resource Plan. Again, we have to ask: what took so long? Nersa – fully aware of the electricity crisis facing the country – wasted seven months to concur with a determination made by the minister in February, a determination that was wholly in line with the Integrated Resource Plan approved by Nersa and Cabinet a few months before in October 2019.

What’s lacking, Mr President, is any sense of urgency. It’s not as if this has sneaked up on us. You and your government have been promising great things at Eskom for years now – in fact, ever since load shedding first occurred in 2007. In September 2015, addressing the National Council of Provinces, you said: “In another 18 months to two years, you will forget the challenges that we had with relation to power and energy and Eskom ever happened.” That aged well, didn’t it?

So how can we trust your promises now? Where are the bold steps that were promised in December last year? Why is the ANC blocking municipalities from purchasing directly from IPPs, and the opening of the grid? Why did Mantashe not raise the limit for exemptions from licensing of generation from 1MW to 10MW? Where is the negotiation with existing power producers to take up excess supply? And why, in the name of all that is good, have we not opened REIPPP Bid Window 5 yet?

Earlier this year, the Portfolio Committee on Mineral Resources and Energy rejected a private members’ bill to create an independent transmission system operator – something that is a global best practice, and which energy experts and investors unanimously agree South Africa desperately needs.

They did this purely on the basis of politics, without interacting with the provisions of the bill to see if they could be improved, or if there was room to reach a compromise. In fact (as has become common), the words used in the committee were “We reject this with the contempt it deserves!” Contempt, Mr President? Surely we should be exploring any and all options to resolve our electricity crisis? Or is your grip on the ANC so tenuous that the ideologues and the nationalists walk all over progressive thought?

Lastly, Mr President, I want to leave you with this thought: In your missive, you say that “the crucial first step in this reform process was the release of the Integrated Resource Plan last year. The Integrated Resource Plan updates the national energy forecast and provides a roadmap for our energy sector for the next decade.”

To a degree this is true, but the Integrated Resource Plan only addresses electricity. Our broader energy roadmap is the Integrated Energy Plan, which according to the National Energy Act 34 of 2008 is supposed to be updated annually. The last one the ANC government actually produced was in 2003, although a draft from 2016 seems to have disappeared. But I suppose we shouldn’t be surprised, as Mantashe doesn’t know the difference between the Integrated Resource Plan and the Integrated Energy Plan.

The choice is yours, Mr President. Work with all South Africans for a better tomorrow, or continue kowtowing to vested interest groups inside your own party who want little more than to create new opportunities to pillage and plunder our country of what little economic resources are left. Whichever you choose, time is running out rapidly. DM

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Business Report 1 July 2012. Optimal Energy chief executive Kobus Meiring is a disappointed man. The company is the developer of South Africa’s electric car but it officially closed on Friday with the loss of about 60 jobs. This follows its failure to get further funding from the government and the Industrial Development Corporation (IDC)... http://www.iol.co.za/business/business-news/why-sa-s-electric-car-is-not-going-anywhere-1.1331580#.T_E37xcjGq8

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