High risk of load shedding for the next 18 months: analyst

 ·17 Dec 2019

Cabinet’s media briefing on South Africa’s energy crisis conflicts with messages from energy minister Gwede Mantashe, says market research group Intellidex – which means South Africans can expect more delays, more confusion, and more load shedding.

In a post-Cabinet briefing note, Intellidex analyst Peter Attard Montalto said that Cabinet’s address did little in the way of providing actual answers to the country’s energy crisis, and instead left analysts scratching their heads.

In the briefing, Minister in the Presidency,  Jackson Mthembu, announced that a new ‘energy war room’ would be established to tackle the country’s energy crisis, headed by deputy president David Mabuza, with Mantashe, public enterprises minister Pravin Gordhan and finance minister Tito Mboweni on board.

He also announced that new Eskom CEO Andre de Ruyter would be asked to start sooner and give government guidance on what needed to be done on future energy capacity, and that government would explore how Renewable Energy Independent Power Producer Procurement (REIPPP) round 4 projects could come on grid earlier.

However, Attard Montalto said that most of this made no sense.

While a ‘war room’ to tackle the energy crisis looked good on paper (and in headlines), the previous war room set up around 2015 did nothing to help the power crisis – and ministers Gordhan and Mboweni have little power over the country’s power determinations, the analyst said.

Further, it is not De Ruyter’s job to guide energy policy or advise government on future energy capacity, he said.

This power lies with the department of energy and Mantashe, who is the only one who can sign s34 determinations on energy procurement, and to work with energy regulator Nersa to gain advice from experts.

Of particular worry, Attard Montalto said, is that comment made by Mantashe at a coal event on the same day as the Cabinet briefing, effectively went against the REIPPP and renewables narrative, contradicting Cabinet.

“In particular (Mantashe’s address) stated that REIPPP round 5 could not be started because REIPPP round 4 had not yet come on-grid and would only do so from mid-2020.

“This is completely the wrong logic – the REIPPP process from start to on-grid takes up from two years – so round 5 needs to be started now to get what is in the Integrated Resource Plan (IRP) by 2025 on-grid in time. The processes necessarily have to overlap between rounds (as they did in earlier rounds),” Attard Montalto said.

“Further there was a strong push back against renewables, ‘declaring enemies’ of other technologies by the Minister which further entrenches the view of him being anti-renewables,” he said.

The analyst said that there appears to be a desire within government to passively push against and delay the IRP, and to not take available shortcuts to secure energy.

“Overall, today showed that government as a collective does not have a cohesive forward momentum on energy policy and hence the risk of load shedding remains high for the coming 18 months,” Attard Montalto said.

Read: New ‘energy war room’ to tackle load shedding

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