Founder: Turnaround Talk
Over the past year, Turnaround Talk has published several articles that focus on the economic impact that loadshedding is having on the South African economy.
Government is well aware of the situation and the need to find a speedy resolution to the Energy Crisis. However, a speedy resolution for conventional companies does not mean the same in Government circles.
A News24 article shows that Government is falling behind in the implementation of its Energy Action Plan.
Shock announcement
The News24 article points out that In a report-back briefing on Sunday, Electricity Minister Kgosientsho Ramokgopa said that of the 50 actions in the plan, eight had been completed, and 20 were on track. But two had not yet begun, and eight were categorised as “off-track with an intervention needed”.
The plan is coordinated by the National Energy Crisis Committee (Necom) in the Presidency. Ramokgopa has had regular report backs on progress since his appointment last year.
Necom’s biggest headaches where work had yet to begin were the development of a net billing framework for businesses and households and a monitoring mechanism for installing rooftop solar.
The article adds that the National Energy Regulator of SA (Nersa) must develop the net billing framework. It will provide private generators with a tariff structure to regulate how they are reimbursed for the energy they feed into the grid offset against what they pay Eskom or their municipality for electricity and use of the grid. Nersa has called for public comment.
Necom also wants a more formal system of monitoring how much solar PV has been installed. Based on falling demand, Eskom has estimated that by last month 4 400MW had been installed – three-quarters of it over the previous year – by businesses, mining operations, agriculture, industry, and households.
Head of the Presidency’s Project Management Office Rudi Dicks pointed out, “we didn’t introduce an adequate registration regime, and many municipalities and Eskom did not have one. We are now trying to introduce this, and we have a project with the World Bank and DMRE to develop a system to give us a precise idea of how much rooftop PV there is across the country.”
Image By: GCIS
Off track
The News24 article points out that the eight actions that were “off track” are:
- Eskom plant performance – ongoing partial load losses and breakdowns;
- Combatting crime and sabotage;
- Land-use authorisations for power projects remained very slow;
- Grid queuing rules have not been finalised;
- Not all of the projects in the Risk Mitigation Independent Power Producer Programme (RMIPPP) had reached financial close;
- Not all of the projects in bid window 5 of the Renewable Energy Independent Power Producer Programme (REIPPP) had reached financial close;
- There was slow progress on further bid windows;
- The National Transmission Company of SA (NTCSA) had still not been operationalised.
Dicks said all of these actions had commenced, but that “they are not where we want them to be”.
Had the government’s procurement programmes in the REIPPP materialised as designed, the combined amount of energy capacity in the pipeline from the REIPPP would be 5 800MW. Ramokgopa said it was anticipated that 2 300MW from these two bid windows would materialise in the next two years. Of the RMIPPP round of 2 000MW only 150MW have entered construction.
Medupi and Kusile
The article points out that, on the plan’s successes, Ramokgopa highlighted the anticipated expedited return of units and Medupi and Kusile, which were taken out of long-term action due to a fire at the former and the collapse of a chimney at the latter.
Progress has also been made to ensure increased diesel supplies and more funding for diesel, and the debt relief package has been approved for Eskom.
The article adds that private investment in energy generation has been accelerated by the expediting of regulatory requirements and significant progress made in installing solar PV by businesses and households.
Image By: Eskom
Troubling news
This is troubling news and the economic impact on companies can be severe.
Already, companies such as Pick n Pay are reporting losses of R1.7 billion due to loadshedding and are spending millions each month to run generators which are necessary to keep their stores trading during loadshedding.
However, they are among the fortunate few that are able to afford these losses and spend money on running generators. What happens to smaller companies? Loadshedding has had such a pronounced impact on smaller companies that some business owners are being forced to use alternative business practices to run their businesses. Additionally, some businesses are forced to admit defeat and close down.
What kind of a South Africa will he have left once the Energy Action Plan is fully implemented?
