New plan is light at end of the tunnel

Conceding that the latest spells of unexpected Eskom load shedding have disrupted the lives of millions of people, workplaces and businesses, President Cyril Ramaphosa is pinning his hopes on the newly launched Integrated Resource Plan (IRP) to create lasting stability in the country.

Introduced by Minister of Energy Gwede Mantashe last week, the IRP is a blueprint for the country’s energy mix until 2030.

It is set to unlock billions of rands in procurement and investment in industry.

“The cost [of load shedding] to our economy is significant,” Ramaphosa said in his weekly online letter.

“It contributes to investor unease at a time when we are trying to attract more domestic and foreign capital to South Africa and to improve our global rankings on the ease of doing business.

“It is also understandable that South Africans became frustrated and angry.

“This latest round of load shedding makes it even clearer the urgency with which we must act to protect our energy supply.”

While technicians worked around the clock to fix problems at several power stations and restore the grid to stability, government released the updated IRP.

“Significantly, given the events of the last week, the updated IRP takes into account the constraints that are facing Eskom and electricity users’ desire to have alternatives to meet their energy requirements,” said Ramaphosa.

“The IRP supports a diversified energy mix that includes coal, natural gas, renewable energy, battery storage and nuclear power.”

With coal remaining the dominant energy source for the country, the president said government would focus on

“attracting investment in high efficiency, low emissions coal technologies”.

South Africa, he said, had to reduce its carbon emissions in line with commitments made at the climate change conference in Paris in 2015.

Ramaphosa said: “Many other nations have made commitments to reduce their own carbon emissions.

“The IRP envisages a move towards steadily reducing emissions through a greater uptake of renewables.

“Alongside this, we need to implement a just transition to ensure that communities and workers, whose livelihoods depend on the fossil fuel industries, are not left behind.

“That is why we will be developing a clear framework for the process of decommissioning coal-fired power stations that have reached the end of their operational cycle.”

Eskom’s financial position remained untenable and its current operational model was difficult.

Ramaphosa said government would soon announce the appointment of a permanent Eskom CEO who, together with a strengthened board, would be tasked with “turning the entity around”.

The restructuring of Eskom into three entities, generation, transmission and distribution, was critical “if we are to respond effectively to the evolving technologies and developments in the global energy industry”.

Eskom needed to improve its credit rating “so it can raise funding for both this operational and capital expenditure”.

“The sheer scale of Eskom’s debt is daunting,” the president said.

“Currently, Eskom is owed in excess of R23.5 billion by defaulting municipalities, and this amount continues to increase.

“This municipal debt, and that from national government departments, must be recovered.”