Electricity minister Kgosientsho Ramakgopa. (Theana Breugem/Foto24/Gallo Images)
The transfer of competencies from Mineral Resources and Energy Minister Gwede Mantashe to Electricity Minister Kgosientsho Ramokgopa was three months in the making but analysts say that, in the end, the latter was given few meaningful powers.
According to a government gazette published on Friday, the powers and functions assigned in terms of section 34(1) of the Electricity Regulation Act were immediately shifted to Ramokgopa, the electricity minister, a new portfolio Ramaphosa announced in his state of the nation address.
Section 34(1)(b) empowers him to decide that there is a need for new generation capacity to ensure uninterrupted power supply and to determine the generational sources and mix required to keep the lights on.
But these decisions feed into the Integrated Resource Plan (IRP), which sets out the basis for new procurement. It has to date been the responsibility of the energy minister and Mantashe has been overseeing an update of the 2019 IRP, which was produced under his watch.
As a quick aside, the stipulations for procurement were written in a way that favoured gas, rather than wind and solar.
Mantashe said some three weeks ago the revised IRP was nearing completion and would soon be released for public comment, telling the National Assembly: “It is going to happen now. We are pushing very hard.”
Presidential spokesman Vincent Magwenya confirmed that the IRP would remain Mantashe’s responsibility.
He added though that whereas the IRP maps how out the country’s medium to long-term energy needs would be met, Ramokgopa’s responsibilities revolved around urgent measures that must be taken to alleviate the current supply crisis.
Section 34(1)(c) to (e) of the Electricity Regulation Act enables him to determine how and to whom energy thus generated is sold and to provide for private sector participation in the generation through a fair, competitive bid process.
In terms of the proclamation, Ramokgopa has also acquired the powers afforded under section 34(2), which are defined as those “necessary or incidental to any purpose set out in subsection (1)”, and relative to procurement.
The Act allocates, in section 34(2)(a) to (e), the power to enter into contracts and to organise the tender process “for the development, construction, commissioning and operation of such new electricity generation capacity”.
It further empowers the minister to apply for, and hold, permits, licences and environmental exemptions required by the state, or those who secure contracts to generate power.
And it designates him as responsible for signing contracts to set up new publicly or privately owned power generation businesses and entering into financial commitments on behalf of the state.
But the proclamation makes clear that Ramokgopa acquires all powers in this subsection barring those set out in clauses (a) to (e). The catch is that these are the only clauses there are in this part of the Act, as it currently reads.
The Electricity Regulation Amendment Bill, which was approved by the cabinet last year but has yet to reach the relevant portfolio committee, elaborates section 34 but the gazette cannot give anyone powers that have not been enacted.
Anton Eberhard, the director of the Power Futures Lab at the Graduate School of Business at the University of Cape Town, said a close reading of section 34 made plain that Ramokgopa has been allocated “nothing meaningful” in the division of powers between the energy and electricity portfolios.
“Mantashe has already made nearly all the determinations for the next few years and tellingly he has retained control over the procurement process.”
Magwenya confirmed that the independent power producer office would continue to reside in the department of mineral resources and energy, meaning that it would still fall to Mantashe to sign contracts with independent power producers selected in terms of the bid windows that now become Ramokgopa’s to announce.
Mantashe’s intransigence in this area has been much criticised.
The minister, a die-hard champion of coal power, is on record as saying he refused to treat procuring renewable energy as “an emergency”. He resisted amending the Electricity Regulation Act schedule to raise the licensing exemption threshold until Ramaphosa overruled him and announced it would henceforth be 100 megawatts.
And he was slow in initiating bid window 5, which finally opened in April 2021, and signed agreements with 13 preferred bidders from that round in December last year, while simultaneously announcing the winners from bid window 6.
At the signing ceremony, Mantashe made his infamous comment that “Eskom, by not attending to load-shedding, is agitating for the overthrow of the state.”
At the same event, the insufficiency of the grid was raised as an obstacle to rolling out renewable power, and in parliament a fortnight ago Mantashe said it would prevent projects from bid window 6 coming online.
When Ramokgopa recently announced plans for a new bid window to procure more than 15 000 megawatts of renewable energy, he said he would prefer a “rolling bid window”, but added: “You can run as many bid windows as you want, but if you don’t have grid access there’s no value.”
But grid insufficiency will not present a credible excuse for failure to sign on independent power producers (IPPS) for renewable generation projects planned upcountry.
Magwenya said the ministers should find synergy because the projects in the pipeline were located in the Northern Cape.
“There is no provision to disagree, there is no provision to delay,” he told the Mail & Guardian.
“Delays currently in terms of IPP projects are a result of the unavailability of grid capacity. What they are looking at are IPP projects that are located in areas where there is grid capacity. So there is no provision for Minister Mantashe or any other minister in that portfolio in the current dispensation to say ‘no, I will not comply by that determination’,” he said.
“There is no provision for him to refuse or reject what the minister of electricity would have decided.”
Regarding the Integrated Resource Plan, he said it should become a collaborative effort.
“Ramokgopa still has to give input to the IRP, but remember the IRP covers both the medium and long term period and therefore the bulk of it will reside with DMRE [department of mineral resources and energy], Ramokgopa’s portfolio is a transitional portfolio. It is set up to deal with a short to medium term problem, so its existence by design is short term and temporary.
“His marching orders is to lead a way out of the current crisis, hence the president expects him to work closely with the Eskom board and management team with respect to getting units back on line, with respect to finding ways to minimise massive breakages that take large chunks of megawatts out of the grid,” he said.
“DMRE has a much broader long-term mandate around energy security and sustainability.”
He added that Ramokgopa was not strictly confined to the Integrated Resource Plan because Eskom was allowed to do emergency procurement, which he would coordinate.
“Eskom itself has the authority to conduct emergency procurement, so it depends where that exercise will be located because it can be located within the company itself,” Magwenya said.
In terms of the National Energy Act, the minister of mineral resources and energy can allow Eskom to conduct procurement to “acquire, maintain, monitor, and manage national strategic energy feedstocks and carriers”.
Eskom can also, within limits, carry out procurement to keep plants functioning and open-cycle gas turbines burning, while section 16 of the Public Finance Management Act allows for funds to be released in case of an emergency.
Public Enterprises Minister Pravin Gordhan remains the shareholder minister overseeing Eskom, but the presidency stressed that the three-way division of labour on energy should not be an obstacle to resolving the load-shedding crisis.
“The country is in crisis, it is not about individual preferences, it is about what the country requires urgently.
“There is no legislative loose end. The shareholder compact still resides with DPE [department of public enterprises] and Minister Gordhan, and that is more focused on the governance of Eskom’s existence and operations, including the exercise of unbundling the divisions of the company.”
Energy analyst Chris Yelland noted that Ramokgopa has no executive authority regarding Eskom.
“He is not a member of the board, he’s not the chairman, he is not the minister of Eskom, so as far I can see, Ramokgopa has got nothing,” he said.
“It is a bit of a mess actually, and I think it is not well thought through. It is not carefully planned what he is going to do and what authority he has to do what he has to do. What has just happened is not a recipe for action, it is a recipe for inaction. When people pull in different directions, nothing happens.”
One could surmise, he said, that the minister’s main responsibility was chairing the National Energy Crisis Committee (Necom) and driving the implementation of the Energy Action Plan the president announced last July.
Mantashe was livid last Friday when the presidency announced that powers would be ceded to Ramokgopa.
A well-placed source has since qualified that the minister was angry because, at a glance, the announcement could be interpreted as stripping him of his powers in relation to energy, with predictable political fallout.
The presidency responded on Sunday by issuing an explanatory note, which went some way towards clarifying the outer limits of the reconfiguration of powers.
Magwenya confirmed that Ramokgopa’s office, which operates on a shoestring within the presidency, would not be given additional public funding.