Eskom Dr Beyers Naude Local Municipality

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SONA: Cyril vows to fix load shedding with IPPs – and six other methods

Ramaphosa detailed his plans on tackling Eskom’s woes. He wants IPPs – and six other interventions – to help solve the ongoing load shedding crisis.

Eskom Dr Beyers Naude Local Municipality

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President Cyril Ramaphosa delivered his fourth State of the Nation Address (SONA 2020) on Thursday evening and the entire country was waiting for the updated plans his administration have for Eskom. He stated that the introduction of IPPs would be used to halt load shedding.

The state’s power utility has been struggling with maintaining a stable grid for months since the last rolling blackouts of November 2019. Coincidentally, Eskom announced, two days before the world tuned into South Africa’s Parliament to hear Ramaphosa’s speech, that load shedding would be halted due to “a number of improvements in the power system”.

While the country has enjoyed two days of no load shedding, there is still an unnerving sense of uncertainty around Eskom’s sustainability. The utility even issued the warning in a statement, noting that “load shedding can be implemented at short notice if there is a change in the system performance.”

Ramaphosa unpacks plans for Eskom turnaround

Opposition parties have criticised Ramaphosa’s inability to get a grip of the country’s overall poor performance. Unemployment figures released this week indicate that no progress has been made in addressing the job drought that’s gripped the labour market.

Crime is still escalating at worrying levels and as high as electricity prices are, there is no guarantee that Eskom will honour our payments by keeping the power grid stable.

However, Ramaphosa, very much aware of the impact that load shedding has had on households and businesses, revealed that his administration would take the following steps in addressing issues at Eskom:

SONA 2020: How Cyril Ramaphosa plans to fix Eskom

  • A Section 34 Ministerial Determination will be issued shortly to give effect to the Integrated Resource Plan 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal;
  • We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within 3 to 12 months from approval;
  • The National Energy Regulator will continue to register small scale distributed generation for own use of under 1 MW, for which no licence is required;
  • The National Energy Regulator will ensure that all applications by commercial and industrial users to produce electricity for own use above 1MW are processed within the prescribed 120 days. It should be noted that there is now no limit to installed capacity above 1MW;
  • We will open bid window 5 of the renewable energy IPP and work with producers to accelerate the completion of window 4 projects;
  • We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants; and
  • We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers.

When will the power utility begin unbundling?

The president also used SONA to give a quick nod to the work done by the utility’s management, under the stewardship of the new Group CEO Andre de Ruyter.

A core part of De Ruyter’s mandate is to oversee the unbundling of Eskom into three separate entities: generation, transmission and distribution. Ramaphosa offered an update into the status of the unbundling process, indicating that:

“Eskom has started with the process of divisionalising its three operating activities – generation, transmission and distribution – each of which will have its own board and management structures. The social partners organised under Nedlac have been meeting over the last two weeks to agree on the principles.

“This is a historic and unprecedented development since it demonstrates the commitment of all social partners to take the necessary actions and make the necessary sacrifices to secure our energy needs.”

Cyril Ramaphosa at SONA 2020