Legalise the self generation of power, Ramaphosa says

PRESIDENT Cyril Ramaphosa has given the government the thumbs up to thrash out legislation that will allow companies and households to generate their own electricity in a bid to alleviate the burden on the national grid.

Embattled state-owned power utility Eskom is struggling to keep the lights on as it battles unplanned breakdowns at its ageing coal-fired power stations across the country. Speaking at the second annual Business Economic Indaba yesterday, Ramaphosa said that the government had in December come up with a new trajectory of allowing self-generation in the energy sector.

Ramaphosa said that the government was starting to appreciate that self-generation, especially renewable energy, was part of the future that needed to be embraced.

“And for the first time we are now saying that let us have self generation. As we move forward, we are beginning to address all those policy issues that have introduced uncertainty and inconsistency,” Ramaphosa said.

“We now opened up a new era in the history of our energy resource generation, if you like, that says we now are embracing the fact that there are those companies, even families or households, that want to generate their own energy.

“We cannot stop technology, we cannot stop the future from arriving.”

The mining industry has been lobbying the government for the longest time for the move due to the power crisis.

Companies like Sibanye-Stillwater and Exxaro Resources want the government to facilitate the bringing on the stream of and licensing of new private-sector power options for embedded generation and private generation for self-use, but which is fed through the national grid.

Mining was heavily impacted last month when Eskom implemented an unprecedented stage 6 load shedding, forcing mining companies to suspend underground operations and halt production. The industry is calling for the amendment of schedule 2 of the Electricity Regulation Act, which would lift the licence requirement for self-generation regardless of plant size.

Unregulated generation is currently limited to 1MW plants, with indications that this will be increased to 10MW, and anything above that is subject to a licence of self-generation per the energy regulator’s requirements.

Exxaro chief executive and the president of the Minerals Council, Mxolisi

Mgojo, said the crisis at Eskom represented a “death knell” for South African mines.

“The current state of Eskom is going to be the one thing that is going to be the death knell of this industry. Without fixing Eskom we don’t have a mining industry. It is as dire as that,” Mgojo said.

“We have been in discussion with the ministries around (self generation), how we would actually go about investing our own monies in alleviating the electricity demand within the grid. That is out there; it just needs the will from somebody else to make that happen.”

Ramaphosa assured the business community that the government was paying continuous attention to Eskom’s maintenance of its fleet, ensuring capable leadership, and said that all the challenges faced by the utility would be addressed in the war room and at board level.