Power utility Eskom estimates that, without additional capacity, there will be an electricity supply shortfall of between 4,000 and 6,000 megawatts over the next five years, as old coal-fired power stations reach their end of life.
To address this shortfall, president Cyril Ramaphosa said that government will in the coming weeks issue a request for proposals for 2,600 megawatts from wind and solar energy as part of a bid window.
Speaking in his 2021 state of the nation address, Ramaphosa said that this would be followed by another bid window in August 2021.
“Recent analysis suggests that easing the licensing requirements for new embedded generation projects could unlock up to 5,000 megawatts of additional capacity and help to ease the impact of load shedding.
“We will therefore amend Schedule 2 of the Electricity Regulation Act within the next three months to increase the licensing threshold for embedded generation.”
Ramaphosa said that this will include consultation among key stakeholders on the level at which the new threshold should be set and the finalisation of the necessary enabling frameworks.
“Eskom has already started work to expedite its commercial and technical processes to allow this additional capacity onto the grid without undue delay.”
Ramaphosa added that over the last year, government has taken action to urgently and substantially increase generation capacity in addition to what Eskom generates:
- The Department of Mineral Resources and Energy will soon be announcing the successful bids for 2,000 megawatts of emergency power.
- The necessary regulations have been amended and the requirements clarified for municipalities to buy power from independent power producers. Systems are being put in place to support qualifying municipalities.
- Government will soon be initiating the procurement of an additional 11,800 megawatts of power from renewable energy, natural gas, battery storage and coal in line with the Integrated Resource Plan 2019.
Ramaphosa said that Eskom will also be looking to partner with investors to repurpose and repower part of its coal fleet.
“This will be done in a way that stimulate investment, local economic activity and local manufacturing, as part of a just transition,” he said.