South Africa to ‘act decisively’ on energy constraints

17 June 2014

The government is to prepare the way for a “radical transformation” of South Africa’s energy sector as it moves to address one of the major constraints to faster economic growth in the country, President Jacob Zuma said on Tuesday.

Delivering his State of the Nation address to Parliament in Cape Town, Zuma said this transformation would require “structural changes in the manner in which government departments, affected state-owned companies and the industry as a whole address the energy challenges”.

It would also call for an injection of capital and human resources into the sector, as well as innovative approaches to fast-track procurement and delivery by the government in the sector.

To prepare the necessary institutional capacity, Zuma said, Cabinet’s National Nuclear and Energy Executive Coordinating Committee was being converted into an Energy Security Sub-committee that would be responsible for the oversight, coordination and direction of all activities related to the energy sector.

At the same time, state-owned companies such as Eskom, the Central Energy Fund and South African Nuclear Energy Corporation would have to adapt to redefined roles to achieve the country’s energy objectives.

Nuclear energy, shale gas

Zuma told Parliament that work urgently needed to be done “at a technical level on all forms of energy, especially nuclear energy and shale gas, with regards to funding, safety, exploitation and the local manufacture of components”.

In April, the Department of Energy said it would soon make an announcement on the country’s energy build future.

South Africa’s nuclear energy policy, approved in 2008, was further enhanced by the approval of the Integrated Resource Plan (IRP) 2010-2030, which stipulates that nuclear power will form part of the country’s energy mix to a level of 9 600 MW.

Koeberg remains South Africa’s only nuclear station.

“Nuclear has the possibility of generating well over 9 000 megawatts, while shale gas is recognised as a game-changer for our economy,” Zuma said on Tuesday.

In October, the government gazetted draft technical regulations on petroleum exploration and exploitation by means of hydraulic fracturing, or fracking.

Speaking at the time, then Mineral Resources Minister Susan Shabangu said the potential of shale gas exploration and exploitation provided an opportunity for South Africa to begin exploring the production of its own fuel, and could provide huge impetus for the industrialisation of the economy.

Zuma said the country would pursue the shale gas option within the framework of its robust environmental laws.

Plans for Coal 3 to be speeded up

The President also announced that the government was taking steps to speed up construction on Medupi, a 4 764 MW coal-fired power station located near Lephalale in Limpopo province, while fast-tracking plans for financing the country’s next large coal-fired power station, Coal 3, so that the procurement process could commence.

Earlier this month, Eskom said it expected Medupi’s first unit to be operating by early 2015. Medupi is one of the three large-scale power plants – the others being Kusile and the Ingula Pumped Storage Scheme – that the parastatal is building to ease pressure on the national grid.

Renewable energy

Zuma said on Tuesday that the government would also push ahead with the fourth round of its renewable energy programme for independent power producers so as to take advantage of wind, solar, biomass and other technologies that increased the opportunity for rural development in the country.

The programme is aimed at bringing additional megawatts into the country’s electricity system through private sector investment in clean energy technologies.

Zuma also reminded Parliament that South Africa had signed the Grand Inga Hydro Power Project Treaty with the government of the Democratic Republic of Congo in October last year.

“This massive and strategic project has the potential to generate 40 000 megawatts of hydro-electricity. Our country will benefit enormously from this milestone project,” he said.