Minister of Trade, Industry and Competition Ebrahim Patel. (Delwyn Verasamy/M&G)
Minister of Trade, Industry and Competition Ebrahim Patel has launched a R1.3 billion Energy One Stop Shop and Energy Resilience Fund to improve the uptake of renewable energy projects and open up investment.
This comes after the National Energy Crisis Committee highlighted that red-tape hindered the uptake of renewable energy.
Patel was called on to support a recovery in the performance of the Eskom coal fleet and add new energy generation to the grid.
Speaking during the launch on Thursday, Patel said the resilience fund was developed to address a key constraint that energy developers face, namely that the many regulatory and other measures slow down approval of energy supply projects.
The resilience fund will be rolled out in four phases. The first will be personnel appointments, which has taken place already, the second website design, the third a registration portal for these projects and the fourth will be a map of the status of projects in the approval process.
“We are committed to fostering a resilient business environment and accelerating private-sector investment in electricity generation to secure a stable energy future,” Patel said.
He also said the presidency is looking at ways to simplify these processes and that having a dedicated resource available to the private sector to address blockages has worked in other parts of the economy.
“It is worth noting that we have also put in place several other instruments to support the energy transition — from new standards on light-bulbs issued in May this year to exemptions granted to companies to collaborate on both the supply of energy and on demand-measures,” he said.
This will help bidders and the department of mineral resources and energy to close bid windows at the specified time.
The department’s acting deputy director general, Susan Mangol, said one of its major objectives is to overcome the estimated 6 000 megawatts shortfall in generation capacity, which is costing the economy hundreds of millions of rand a day.
“This is because independent power producers currently wait about 365 days and go through 12 different authorisation processes, and funders have become averse to investing in projects,” she said.
She added that the department has approved projects worth R294 million. “The companies concerned are in sectors such as food and beverages, metal fabrication, rubber and plastics and accommodation services.”
Eskom acting chief executive, Callib Cassim said the resilience fund would help cover the power utility’s 6 000 megawatts.
Energy Council of South Africa chief executive James Mackay said South Africa is re-shaping the regulatory landscape to facilitate the energy transition to distributed, decentralised and traded energy.
“There is significant reform still required and the one stop shop will play a significant role in developing this evolving landscape,” MacKay said.
But he added that the slow and unclear policy reform, limited capacity to implement changes, and the lack of speed and scale make it difficult to attract the kind of investment needed.
Head of the presidency Rudi Dicks said some permit authorisation times had already been shortened. “The environmental affairs minister has given permission for wind and solar licences to be approved in three months now, where it used to take a year,” he said. “Registration has been reduced to 19 days.”
The fund will also be supported by 115 chief executives of South African companies who have committed to working with the government to facilitate the legal and regulatory frameworks needed to speed up the energy transition, he said.
Mandisa Nyathi is a climate reporting fellow, funded by the Open Society Foundation for South Africa