During a sitting of Parliament on the debate of the Economic Reconstruction and Recovery Plan, Mineral Resources and Energy Minister Gwede Mantashe has reiterated government’s targets to deliver 16 313 MW of additional electricity generation capacity from a mix of energy sources.
Mantashe pointed out that an already recessive economy, coupled with the pandemic and the lockdown to halt its spread, as well as downgrades by ratings agencies, had increased the reliance on a recovery plan to provide reliable and affordable supply of energy.
The Minister added the plan must help to accelerate the country’s development beyond Covid-19 and just recovery.
“Expanding the country’s energy generation capacity is a priority intervention to support a rapid economic rebound. This is central to us saving our livelihoods,” Mantashe said.
The Integrated Resource Plan 2019 sets out the procurement of 2 000 MW of emergency power to meet the short-term electricity supply gap, for which the Department of Mineral Resources and Energy (DMRE) issued a request for proposals.
The bid submissions will close on November 24 and the preferred projects are expected to be connected to the grid by June 2022.
Then, the plan specifies the procurement of 11 813 MW from various energy sources, including 6 800 MW from solar photovoltaic and wind power, 513 MW from storage, 3 000 MW from gas and 1 500 MW from coal.
The department will issue request for proposals in December, to enable the opening of the fifth bid window of the Renewable Energy Independent Power Producer Procurement Programme.
The department also issued a request for information for 2 500 MW of nuclear power, with responses from the market currently being evaluated.
Effective immediately, the department has enabled 97 MW of self-generation for own use through a gazetted amendment of Schedule 2 of the Electricity Regulation Act. Government has exempted categories of generation facilities under 1 MW and resellers from the requirement to hold a generation licence.
The National Energy Regulator of South Africa has already registered 156 self-generation facilities that are under 1 MW each, with a total installed capacity of 72 MW.
Of these, applications for 25 MW have been approved. This amendment removes the need for Ministerial approval on these small self-generation plants.
Moreover, the DMRE gazetted amendments to Electricity Regulations on new generation capacity to enable municipalities – that are in good financial standing – to develop their own power generation projects.
Mantashe mentioned that work to achieve operational and financial stability at State-owned power utility Eskom continues, with the unbundling process progressing well.
“These initiatives will complement efforts to secure energy supply for society.”
Looking ahead, Mantashe said the department had considered the feasibility of natural gas for economic use in the South African market, which includes accelerating the exploration of South Africa’s natural gas deposits for domestic gas feedstock.
Before the pandemic struck, the DMRE had been in the process of consulting with stakeholders on the Upstream Petroleum Resources Development Bill, but community consultations had to be halted and are now able to restart.
The finalisation of this Bill will unlock the country’s untapped potential in upstream oil and gas reserves.
“As directed by the President, the Economic Reconstruction and Recovery Plan should fast-track reforms to reduce the cost of doing business in our country. This is to facilitate investment, achieve economic growth and transformation,” Mantashe affirmed.