South Africa unveils five-point plan to address energy challenges

Source:Government of Republic of South Africa

South Africa’s cabinet has announced that a war room has been set up with immediate effect to oversee the implementation of a five-point plan to address the electricity challenges facing the country. 

At the last post cabinet briefing of the year, Minister in Presidency: Planning, Monitoring and Evaluation, Jeff Radebe, said cabinet was concerned at the disruptive effect the recent power outages were having on the daily lives of South Africans and its impact on households and businesses across the country.

“Cabinet adopted a five-point plan to address the electricity challenges facing the country. 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,” said Minister Radebe in Pretoria on Thursday.

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

Five-point plan

Minister Radebe said the five point plan would address the strain the electricity system faces.

The plan covers:

·             the interventions that Eskom will undertake in the period over the next 30 days;

·             harnessing the cogeneration opportunity through the extension of existing contracts with the private sector;

·             accelerating the program for substitution of diesel with gas to fire up the diesel power plants;

·             launching a coal independent power producer program; 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 government is implementing an energy mix which comprises of 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.

Minister Radebe said since 1994, five million more households were 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,” he said.

Eskom will on Thursday sign a Memorandum of Understanding 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 will further present a detailed finance plan to manage its cash flow beyond 2015. This plan will be presented to the IMC by December 2014. Simultaneously government will finance the funding model, said Minister Radebe.

He said cogeneration options will be pursued with the sugar paper and pulp industries to harness waste energy to the extent of 1,000 megawatts, adding that there are significant opportunities for the importation of gas.

Also, a coal independent power producer program will be launched by the end of January 2015 with 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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