/ 28 July 2022

Ramaphosa’s energy crisis plan far-reaching and comprehensive, says presidential climate commission

President Cyril Ramaphosa. (GCIS)

The “bold, courageous and decisive action” to close South Africa’s electricity gap that was announced by President Cyril Ramaphosa this week is a major step in the country’s climate response and in achieving a just energy transition in the country, according to the presidential climate commission.

The energy crisis plan is “far reaching” and “comprehensive”, it said, and sets out policy measures and actions to be taken by different social partners to minimise the social and economic effects of the energy transition and to improve the livelihoods of those most vulnerable to climate change.

“We are encouraged that this set of short-term measures is also compatible with our long-term climate objectives and demonstrates South Africa’s commitment to a decarbonisation path,” it said.

It remained supportive of the calls for and the creation of an enabling environment to increase the involvement of different partners and the removal of the licensing threshold for embedded generation in the context that projects must still “comply with the technical requirements for grid connection and our environmental legislation”. 

“We applaud the streamlining of bureaucratic processes around those requirements, including establishing a single point of entry for all energy project applications, to ensure coordination of approval processes across government,” it said.

The ability for rooftop solar photovoltaic (PV) panels to provide power directly to the grid will enable businesses and households to invest in rooftop solar and other embedded electric generation, “thus transforming the electricity sector and positioning it to be sustainable and accessible to many South Africans”.

South Africans must be part of the solution 

On the country’s Integrated Resource Plan (IRP) being reviewed to reflect the need for additional generation capacity and the country’s climate commitments, the commission will be making recommendations on a long-term energy mix that ensures energy security and affordability while reducing the country’s carbon emissions.

“We support the call for all South Africans to be part of the solution; to contribute in whatever way they can to ending energy scarcity in South Africa; and call on other stakeholders to innovate their practice in support of implementing these measures.”

These solutions and actions, it said, should include private sector investment in installing significant generation over and above 100 megawatts, “with the participation and empowerment of community and youth, women and worker-owned enterprises and cooperatives”.

It should include the financial service sector developing “pioneering finance products” and incentives to support small business and households installing rooftop solar and onsite storage, local government and Eskom collaborating on accelerating their feed-in tariff processes and the immediate further release of land by landowners  for renewable energy farming, “following Eskom’s example”.

Strong role for renewables 

The World Wide Fund for Nature’s South African branch (WWF-SA) welcomed Ramaphosa’s announcement of the energy crisis plan. “In light of the current electricity crisis, an urgent plan to provide for the shortfall has long been needed,” it said.

“We are encouraged to see that there is a strong role for renewable energy in this plan, including the acceleration of the IRP’s proposed renewable energy development as was called for by a large grouping of civil society. This is in line with all the scientific and technical guidance that renewable energy is both the fastest and the cheapest means of addressing the energy shortfall, especially when coupled with appropriate forms of energy storage.”

The feed-in tariff opens up opportunities for tapping the potential of urban areas to provide electricity directly into the grid. “However, it should be noted that many of the households inconvenienced by the power shortages are low-income households, for whom electricity is often too expensive to access.”

A nationwide provision of rooftop solar PV for low-income households, potentially linked to the Just Energy Transition Partnership, would help address multiple problems, and aligns well with the electricity plan, it said. With 600MW of solar per RDP house, up to 1.2 gigawatts of solar power could be generated at any given time, providing power for those who can least afford it and potentially supplementing the incomes of these households.

Potential flaws

But the WWF-SA cautioned against potential flaws in the plan. “We urge firstly that the waiver of regulations around installation of energy infrastructure should not encompass environmental considerations, since there can still be significant impacts on biodiversity.”

Second, the mooted call for fossil gas infrastructure is “concerning, as is the mention of mobile generators, which we are concerned may include the invidious Karpowerships”. 

Although it conceded that hydrocarbons are a potential long-term energy storage mechanism, “they are not needed until we have a very high renewable penetration in the electricity system, by which time costs of other grid management options like green hydrogen would have fallen further”. 

Fossil gas may have a short-term role for peaking generation, when compared with the price certainty of batteries, it “represents both a financial risk and a certain climate impact that we must avoid”.

The near-term electricity crisis plan, it said, must not “lock in fossil fuels”, and “we must bear this in mind both at present and as we shape the new energy future for our country”.

‘Forcing gas’

The Life After Coal campaign supports the decision to roll out the remaining renewable and battery storage allocation in the 2019 IRP, “a decision that civil society organisations expressly called on the department of mineral resources and energy and the Presidency to take in recent weeks”. 

“South Africa must build at least five gigawatts of renewable energy every year just to meet the demand created by the unavoidable retirement of Eskom’s ageing coal plants — this is beyond the renewable capacity even envisaged in the IRP.”

The campaign said the decades of delay in taking action and the crisis that has resulted “cannot be used as a justification for rolling out new fossil fuel developments like gas, nor to promote or accelerate privatisation of all new electricity generation, which would risk the further downward spiral of Eskom as a public utility”.

Ramaphosa’s plan appears to use the energy crisis to force gas into the electricity generation mix, without consideration of its high costs, harmful effects on climate and health as well as financial risks. “There are currently numerous gas to power projects seeking authorisation, including the controversial Karpowership projects, which are subject to various legal challenges. We do not accept that the need to address the energy crisis can be used to greenlight these risky gas developments.” 

Private deals

The campaign said it noted that “embedded” generation is used in Ramaphosa’s plan to include off-site plants with the power being “wheeled” through the grid in private deals between big corporate producers and consumers of power. 

“The producers may sell power to multiple customers, and projects can be as big as they like, subject only to technical limits. The provision of grid services at a nominal charge, including wheeling, stability and energy storage services will in effect subsidise these corporate producers.

“Will these deals be done outside of the regulatory framework, or be subject to the IRP or any other electricity regulation. Will the IRP now be about what’s left of the public system? And if load-shedding is required in future, will the private power customers be exempt? Also, as much as they may put additional power on the grid, these will also take up publicly-funded grid capacity for private supply deals.”

‘Implicit acceptance’

It said Eskom is being allowed, “or Eskom is choosing” to build only 500MW of renewables, and there seems to be an “implicit acceptance” of its repurposing plans in Ramaphosa’s speech.

“Nearly all renewable new power generation, which is low-cost and highly profitable relative to the current cost of power, will be privatised under these proposals. Eskom will not be building these low-cost renewables, losing an opportunity to lower its overall generating costs. 

“The major share of its generating capacity will continue to be high-cost and unreliable coal power, and, if it proceeds with its gas-power plans, even higher gas-based costs. Eskom will continue its downward spiral, and electricity prices will continue to increase, to the detriment of the public.”