What businesses still need from Ramaphosa’s new energy plan

 ·26 Jul 2022

Business Unity South Africa (BUSA) says that the government must be held accountable for the new energy plan and deliver on hard deadlines and execution targets.

President Cyril Ramaphosa, on Monday (25 July), announced that regulations will be changed to allow for fast-tracking new energy generation projects.

South Africa has faced continual rolling blackouts over the past five weeks, with energy capacity levels hitting lows due to poor maintenance, a lack of necessary skills and illegal strike action.

Cas Coovadia, BUSA’s chief executive officer, said the business community is encouraged by the president’s new plan and pleased that most proposals from energy experts and the private sector were considered.

“Simply put, the country needs to bring on as much generation capacity as possible, in as short a time as possible to close the 6GW energy gap, and this plan is a concrete step towards achieving this,” said Coovadia.

However, he added that the government still needs to provide more detail, including:

  • A clear execution plan;
  • Hard deadlines; and
  • Accountability for delivery.

“The country and the business sector will benefit from regular and transparent progress reports, so it can track and plan accordingly.”

Business for South Africa added that the new plan from Ramaphosa offers a blueprint for private sector partnerships; however, key enabling factors must not be forgotten, notably, the rapid investment required for the transmission grid and the need for a standardised wheeling framework.

“These are critical to ensuring the success of the interventions.”

BUSA added that it hopes the energy plans will be implemented with speed and focus.

Coovadia said that business has consistently indicated its readiness to help fast-track these energy crisis interventions and looks forward to collaborating with the president’s National Energy Crisis Committee, which will focus on driving the implementation of this excellent package of interventions.

“While we encourage urgency in the beginning to implement these complex reforms, we recognise that patience and endurance will be needed; getting rid of load-shedding will take time.”

BUSA particularly welcomed the removal of the need to licence embedded private sector generation capacity, a clear focus on removing, wherever possible, wider regulatory and red tape blockages within the existing law, the use of new legislation to unblock other red tape issues and the creation of a one-stop-shop for energy application approvals.

“The use of new pricing structures to incentivise a huge investment in commercial and household rooftop generation is also an extremely important new step and comes in addition to Eskom procuring existing, surplus power from IPPs,” said Coovadia.

Coovadia said these steps to support private sector investment are particularly important given the challenges that fixing Eskom’s existing plant will face.

“We believe, with hard work and a focus on implementation, together we can profoundly shift the trajectory of our country’s future in a positive direction.”

“While there are many areas of our economy that require urgent reforms, notably water security, logistics, infrastructure, and crime, none is as critical as energy availability, which is needed to unlock economic growth, investment, and jobs, which will put the country back on the path to success.”

Read: No more excuses: Ramaphosa announces massive changes for new energy projects in South Africa

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