Nonprofit organisation the Energy Intensive Users Group (EIUG) has welcomed the statements made by President Cyril Ramaphosa in his State of the Nation Address (SoNA) on February 10, and says it concurs with the President about the need for “a competitive market for electricity generation and the establishment of an independent State-owned transmission company.”

It says Ramaphosa correctly diagnosed the root causes of the South African electricity crisis, being “aging power stations, poor maintenance, policy missteps and the ruinous effects of State capture”, leading to the current electricity supply shortfall of 4 000 MW.

The EIUG, and the industry more broadly, have continuously highlighted these issues and have advocated for urgent action to correct them, including intensified maintenance by State-owned utility Eskom and new generation capacity, as mentioned by the President, the EIUG emphasises.  

It highlights that Ramaphosa announced “far-reaching amendments (that) will enable a competitive market for electricity generation and the establishment of an independent State-owned transmission company”, through the unbundling of Eskom, amendments to the Electricity Regulation Act and the anticipated ability to trade electricity.

The EIUG says it believes these changes will have a tangible positive impact in closing the electricity supply deficit, stabilising electricity prices and decarbonising the country’s grid, which will, in turn, stimulate economic growth in South Africa and enable social progress.

It also says that Ramaphosa’s commitment to close the current energy shortfall through additional public and private generation is a welcome and necessary step.

“Private power generation, however, requires an enabling electricity supply industry, beyond simple barrier removal, to encourage stronger and faster uptake of these projects.

“We are encouraged by the work government is doing in this respect and, as the EIUG, we are committing to work with all the stakeholders, to ensure the realisations of SoNA announcements.

“In this regard, energy-intensive consumers are investigating and developing alternative electricity supply options to mitigate production disruptions, above-inflation electricity tariff increases and accelerate the decarbonisation of their operations. This will not only benefit self-generating consumers but also Eskom, other consumers, society, and the country,” says the organisation.

It adds that it will continue to engage with government and other stakeholders in a constructive manner to raise its concerns and work with them in finding solutions.