During his State of the Nation Address, the President gave reassuring impetus to solving the current energy crisis and perennial load shedding that has been decimating the economy.
Essentially confirming the statement by the Minister of Mineral Resources and Energy at the Mining Indaba 11 days ago, the President recorded that the regulatory environment is to be changed in order to facilitate uncapped commercial and industrial distributed generation for own use, thereby dramatically reducing the load on Eskom whilst it implements a long-term maintenance and rehabilitation programme on its generating assets.
Notably, the President referred to commercial and industrial generation of power, not confining this to mines. This is a major step forward from a policy point of view, and will give Eskom the breathing space it so critically needs.
Further facilitating interim production of much-needed power, the President also recorded that a Ministerial Section 34 determination implementing the IRP2019 (including procurement from renewable resources, natural gas, hydropower, and coal), the pursuit of Round 5 of the Renewable Energy IPP Programme and the Emergency Power Procurement Programme to add capacity to the grid within 3 to 12 months all would be progressed soon.
In addition, the President further confirmed that municipalities are to be authorised to procure power from Independent Power Producers directly, thereby further reducing Eskom’s production burden. Given the current electricity crisis, and noting the President’s affirmation that the economy needs to be sustained urgently, there is an expectation that the necessary practical steps will be taken as a matter of urgency.
For further information, please contact our Energy team.
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