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President Cyril Ramaphosa has detailed the government’s plan to tackle the cargo shedding problem in South Africa.
In his weekly mail to the nation, he referred to purchasing power from Independent Power Producers (IPPs) as well as purchasing renewable electricity generation and additional provision for self-generation as cornerstones of the government’s plan to eliminate head loss.
“All South Africans know how important electricity is in our lives. When it’s available, nobody thinks about it, ”Ramaphosa said.
“But when we get rid of the burden, everything goes wrong in our lives at home, in our work environment, and in virtually every facet of our lives.”
He acknowledged the precarious nature of the country’s national electricity grid and said Eskom’s coal-fired power generation infrastructure is aging and vulnerable to breakdowns.
Reliable and affordable electricity is the lifeblood of the economy, he said, adding that South Africa still relies heavily on fossil fuels for electricity generation.
The plan to stop cargo shedding
Ramaphosa said it is vital to increase the country’s power generation capacity, referring to the recent published determinations which will allow obtaining more than 11,800MW of energy from certification service providers.
“This indicates the government’s clear intention to move forward with one of the key reforms that are needed to unlock growth in our economy and attract much-needed investment,” he said.
“This new energy will come from a variety of sources, such as solar, wind, gas, coal, and storage.”
He said that new generation projects that can be connected to the grid as soon as possible will be prioritized and that the next step will be to initiate bidding windows for acquisitions, including the opening of bidding window 5 of the IPP renewable energy program.
Self-generation licensing requirements for facilities of less than 1MW have been eliminated and 156 self-generation facilities of less than 1MW have been registered to date.
“For facilities that can generate more than 1 megawatt, the South African National Energy Regulator is improving its licensing processes to improve response time,” he said.
“More work is underway to reform the regulatory environment to ensure that we make more full use of this country’s great potential for self-generation among commercial and industrial users.”
He said new regulations will be published soon that will allow municipalities to buy their own electricity from IPPs.
Great step forward in energy policy reform
Ramaphosa noted that a reform of the country’s energy policy is needed to improve the national availability of electricity and referred to the stabilization of Eskom as an important factor in this reform.
“In this regard, we are working to restore Eskom’s operational capabilities and restructure Eskom to fundamentally change the way we generate and transmit electricity in our country,” he said.
“We are making progress in overcoming the challenges Eskom has faced for several years.”
He said the energy policy reform that the government is working on aims to reduce the impact of power outages on companies and promote investment.
“The latest developments that I have highlighted in this letter represent a huge and fundamental step forward in the implementation of our ambitious energy plan,” said Ramaphosa.
“The acquisition of energy from independent producers will significantly increase investment in the sector, particularly in renewable energy and gas.”
“This will attract more investment in energy and create much-needed jobs, and stimulate business development and localization,” he said.
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