Daily Archives: February 16, 2015

Energy challenge

South Africa  is currently experiencing serious energy constraints which are an impediment to economic growth and is a major inconvenience to everyone in the country, President Jacob Zuma said in his State of the Nation Address on 12 February 2015.

Government is doing everything within its power to deal with the problem of energy shortage in the country.

A plan has been developed which involves short, medium-term and long-term responses. The short and medium-term plan involves improved maintenance of Eskom power stations, enhancing the electricity generation capacity and managing the electricity demand. The long-term plan involves finalising a long-term energy security master plan.

The first priority is to stabilise Eskom’s finances to enable the utility to manage the current period. In this regard, government will honour its commitment to give Eskom around R23 billion in 2015/16.

The ‘War Room’ established by Cabinet in December is working diligently around the clock with Eskom, to stabilise the electricity supply system and contain the load shedding.

President Zuma urged all individuals, households, industries and government departments to save electricity in order to reduce the need for load shedding. The Department of Public Works has been instructed to ensure that all government-owned buildings are energy efficient. 

Given the high cost of diesel, Eskom has been directed to switch from diesel to gas as a source of energy for the utility’s generators.

Households are also being encouraged to switch from electricity to gas for cooking, heating and other uses.

The construction of the three new power stations – Kusile, Medupi and Ingula – will add 10 000 megawatts of capacity to the national grid. The quest for alternative energy sources is ongoing.

Up to February 2015 government has procured 4 000 megawatts from iindependent power producers, using renewable sources. The first three bid windows of the renewable energy procurement process attracted more than R140 billion from private investors.

A total of 3 900 megawatts of renewable energy has also been sourced, with 32 projects with a capacity of just over 1 500 megawatts completed and connected to the grid.

Eskom itself has completed the construction of the Sere Wind Farm, which is already delivering 100 megawatts to the grid, well ahead of its intended launch in March this year.

Government also began procurement in December 2014, of 2 400 megawatts of new coal-fired power generation capacity, from independent power producers. The procurement process for 2 400 megawatts of new gas-fired generation will commence in the first quarter of 2015/16.

A total of 2 600 megawatts of hydro-electric capacity will be sourced from the Southern African Development Community (SADC) region.  With regards to the long-term energy master plan, we will pursue gas, petroleum, nuclear, hydropower and other sources as part of the energy mix.

South Africa is surrounded by gas-rich countries, while we have discovered shale gas deposits in our own Karoo region. 

The Operation Phakisa Ocean Economy initiative, launched last year, also promises to unveil more oil and gas resources, which will be a game changer for our country and region.

Government is also exploring the procurement of the 9 600 megawatts nuclear build programme as approved in the Integrated Resource Plan 2010-2030. To date government has signed inter-governmental agreements and carried out vendor parade workshops in which five countries came to present their proposals on nuclear. These include the United States of America, South Korea, Russia, France and China. All these countries will be engaged in a fair, transparent, and competitive procurement process to select a strategic partner or partners to undertake the nuclear build programme. Our target is to connect the first unit to the grid by 2023, just in time for Eskom to retire part of its aging power plants.

With regards to hydro power, the Grand Inga Hydro-electrical Project partnership with the Democratic Republic of Congo will generate over 48 000 megawatts of clean hydro-electricity.  South Africa will have access to over 15 000 megawatts. 

For sustainability, government will establish strategic partnerships for skills development with the countries that will partner us in the Energy Build Programme, while also generating skills locally.

Electrification

There are still 3,4 million households in South Africa without electricity. In the June 2014 SoNA, President Zuma announced that infrastructure support will be given to specific municipalities in the country.  

Funding has been provided for electrification to the following municipalities in the 2015/16 financial year:

  • Amathole District Municipality has been allocated R138,4 million to electrify 7 936 households.
  • Umzinyathi District Municipality has been allocated R118 million to electrify 6 930 households. To date a total of R118 million has been transferred and 2 365 households have been connected. An additional provision of R209 million has been made for the 2015/16 financial year for households electrification and bulk infrastructure.
  • Alfred Nzo District Municipality has been allocated R191,3 million to electrify 4 688 households. To date a total of R148 million has been transferred and 2 399 households have been connected. A provisional allocation of R30 million has been made for the 2015/16 financial year for households electrification and bulk infrastructure.
  • Lukhanji Municipality received R6,7 million for electrification. The infrastructure projects have been completed. An additional allocation of R4,5 million has been made for the 2015/16 financial year for the electrification of houses. 
  • OR Tambo District Municipality has been allocated R300 million for the electrification of 12 192 households. Houses not connected to the grid will be connected using solar home systems. A total of 2 365 households connections have been connected. An additional provision of R357,5 million has been made for the 2015/16 financial year.

Related links

President Jacob Zuma: State of the Nation Address (SoNA)

Electricity production declining, Statistics South Africa, 5 February 2015

Insight Issue 15: Energy, February 2015

Eskom