South Africa has a plan for electricity

12 December 2014

A war room has been set up to oversee the implementation of a five-point plan to address South Africa’s electricity challenges following Cabinet concerns about the disruptive effects of the recent power outages on the daily lives of citizens and their impact on households and businesses.

“The lack of sufficient capacity to meet the country’s energy needs remains a challenge and all attempts are being made to ensure that we overcome the tight energy situation,” the Cabinet said yesterday in its statement following its regular fortnightly briefing on Wednesday. It was the last briefing of the year.

“The Cabinet adopted a five-point plan to address the electricity challenges facing the country,” Minister in the Presidency: Planning, Monitoring and Evaluation Jeff Radebe said in Pretoria after the briefing. “The lack of sufficient capacity to meet the country’s energy needs remains a challenge and all attempts are being made to ensure that we overcome the tight energy situation.”

Minister of Energy Tina Joemat-Pettersson said the war room would be made up of the departments of Energy, Co-operative Governance and Traditional Affairs, Public Enterprises, National Treasury, Economic Development, Water and Sanitation and Eskom, as well as technical officials.

“We bring together a team that [will] drive the implementation of the interventions in the five-point plan. A core focus will be to monitor the implementation, assess the costs.”

She said the war room would be housed at Eskom to ensure the optimal co-ordination of all parties.

Five-point plan

The plan covers:

  • The interventions that Eskom will undertake over the next 30 days;
  • Harnessing cogeneration opportunities through the extension of existing contracts with the private sector;
  • Accelerating the programme for substitution of diesel with gas to fire up the diesel power plants;
  • Launching a coal-independent power producer programme; and,
  • Managing demand through specific interventions within residential dwellings, public and commercial buildings and municipalities through retrofitting energy efficient technologies.

To meet the country’s future energy requirements, the government is implementing an energy mix comprising coal, solar, wind, hydro, gas and nuclear energy. In future biomass, wind power, solar power and hydro power will contribute 11.4 gigawatts of renewable energy to the grid.

Radebe said that since 1994, five million more households had been connected to the grid. In 2004, this increased to 12 million households. “This happened without additional power stations being built. This increase of households was set off the existing grid.”

State power utility Eskom signed a memorandum of understanding yesterday with the Strategic Fuel Fund and Transnet Ports Authority to ensure a regular supply of diesel.

A focus will be placed on improving the strategic maintenance and operational efficiency to ensure that the level of efficiency is increased from the 72% currently to the target of 80%.

Eskom would present a detailed finance plan to manage its cash flow beyond 2015. This plan would be presented later this month. Simultaneously, the government would finance the funding model, Radebe said.

Options for cogeneration – the generation of electricity and useful heat jointly, especially the use of the steam left over from electricity generation for heating – would be pursued with the sugar, paper and pulp industries to harness waste energy to produce 1 000 megawatts, he said, adding that there were significant opportunities for the importation of gas.

Also, a coal-independent power producer programme would be launched by the end of January 2015 with a generation capacity of 2 500 megawatts.

Public Enterprises Minister Lynn Brown said there was a need to look at the ongoing financial security of Eskom, although that did not mean there would a bail out.

“This could mean guarantees, providing the space for Eskom to raise its own money – a combination of financial processes.”

She said while there was a cash flow problem, there was enough money to provide diesel. “As we speak, I am comfortable that until January, Eskom’s cash flow will be fine.”

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