Major load shedding shift for South Africa
South Africa’s Energy Council will be switching gears and moving away from dealing with load shedding as its key focus to the next challenges in the sector.
During a meeting on Tuesday (13 August) with cabinet members and senior business leaders, President Cyril Ramaphosa laid the foundations for the Government of National Unity’s focus areas for the seventh administration.
This includes the continuation of the partnership between the government and business leaders to address the biggest crisis areas in electricity, transport and logistics, and crime and corruption.
At the meeting, business and government leaders committed to building on the progress achieved to date and accelerating implementation over the next 12-18 months, in line with the GNU’s strategic priorities.
“The Government of National Unity has reaffirmed its commitment to urgently implement the reform agenda started by the 6th administration and to restore confidence and sentiment—essential drivers of investment, inclusive economic growth, and job creation,” said Ramaphosa.
Adrian Gore, co-convenor of the business delegation, said the president’s commitment to a new era of partnership at a critical inflexion point for the country and continued momentum could set South Africa up to achieve 3-5% GDP growth by 2030.
“We will be launching Phase 2 of our partnership with this ambition in mind,” he said.
The most significant impact of the partnership has been seen in the energy sector, where the government, Eskom and private investors have orchestrated a dramatic reduction in load shedding in South Africa.
The country has now experienced 140 days without load shedding so far this year, along with significant grid capacity recovery—and more than 6,000MW of new energy generation added.
The president said that this has been achieved through investment in additional technical support and capacitation from 57 companies investing over 9,000 hours at five power stations.
The energy availability factor is currently tracking above 60% and is heading towards 70%.
Energy minister Kgosientsho Ramokgopa said this week that, while it is still too soon to declare load shedding a thing of the past, the country is within “touching distance” of making the declaration.
However, despite the progress, the president noted that the country still faces multiple challenges in the sector, including:
- Rapidly rising electricity costs;
- Unsustainable municipal utilities;
- Complex market reform;
- A constrained grid with delayed expansion; and
- Stalling investment in new generation.
As such, the National Energy Committee (Necom) will be shifting its focus to these new priorities.
“Significant investment will be required for energy sector reform over the next 5-10 years and there was strong consensus that it is critical to pave the way now to address the challenges,” the presidency said.
“Business, Eskom and the Presidency have agreed that the priorities of the National Energy Crisis Committee should include a focus on transmission, market reform, municipal utilities and new energy generation.”
Ramokgopa has repeatedly flagged electricity networks at a municipal level as being the next big crisis that Eskom and South Africa face—while also urgently needing to address the question of affordability.
Other focus areas
As with the energy sector, the partnership with business is also working to address the other key issues in the country.
The transport and logistics and crime and corruption workstreams, which are now fully established, have also shown an impact, but not as quickly or extensively as anticipated, the presidency said.
“Business has provided significant technical support and resources to Transnet Freight Rail, including procurement and operations expertise, and port maintenance support for Transnet Port Terminals.
“The Transnet Board and management team are making progress in implementing the Transnet recovery plan.”
Despite the significant efforts by the partners, however, there is broad acknowledgment that Transnet requires substantial interventions to improve performance to meet the needs of its customers and the market demand necessary for sustainable economic growth.
The meeting agreed that the rapid implementation of structural reforms and strict adherence to the Freight Logistics Roadmap deadlines are crucial to facilitate participation of, and investment by, the private sector to help address our national logistics challenges.
In the crime and corruption workstream, an immediate joint imperative is to support South Africa’s removal from the Financial Action Task Force (FATF) grey list, which would improve international confidence in South Africa as an investment destination.
“Key to this is demonstrating the law enforcement agencies’ intent and ability to successfully prosecute complex crime and corruption cases and recover assets.
“Business is providing specialised skills at arm’s length to support this objective. The promulgation of the NPA Amendment Act is key to bolstering IDAC’s ability to effectively deliver on its mandate,” the presidency said.
Read: The end of load shedding in South Africa is close – with a very big catch
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