Focus on President Ramaphosa's announcements to address the energy crisis

On Monday 25 July, South African President Cyril Ramaphosa presented an emergency plan to address the energy crisis. The announcement, which has been expected for several weeks, comes as the country reached historic levels of load shedding in July - at the height of the crisis, the shortfall in generating capacity was 6 GW, or more than eight hours of daily power cuts.

The first measure is to allow Eskom to purchase surplus generation from independent power producers (beyond what is contracted with the state) and the private sector (mining industry), as well as to purchase power from operators in Botswana and Zimbabwe.

In the medium term, the two major announcements of this plan are the abolition of the licence for the development of self-generation capacity by the private sector (the threshold had already been raised from 1 to 100 MW in 2021), as well as the doubling of the capacity of the current call for tenders (launched on 6 April) for the development of renewable energy (bid window 6), from 2.6 to 5.2 GW. In addition, new measures will be implemented to encourage companies and individuals to install solar panels on their roofs and avoid wastage during peak periods.

The emergency plan also includes improving the performance of the national electric utility Eskom, which provides 95% of the country's electricity production and is in serious financial and operational crisis. To this end, the plan emphasises the fight against corruption and sabotage, the recruitment of qualified personnel and an increase in the budget allocated to maintenance.

The President also recalled several structural reforms underway, which will contribute to achieving energy security in South Africa: the updating of the Integrated Resource Plan (IRP 2019), the separation of Eskom into three distinct entities (production, transmission and distribution) and the finalisation of the Electricity Regulation Amendment Bill. It confirmed the launch of a call for expressions of interest on batteries in September, and then on gas.

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