Ramaphosa promises to complete energy sector reforms

President Cyril Ramaphosa on Monday welcomed last week’s milestone of 100 days without power cuts in South Africa, but warned that periodic power cuts could return.

Eskom said last Friday it had maintained power for 100 days, the longest such period without a power outage since 2020. The postponement comes as Eskom focused on its power recovery plan, which is bringing benefits in the form of more reliable power plants.

“While this is a welcome milestone, it is not a reason to relax,” Ramaphosa wrote in his weekly online bulletin on Monday. “Our energy system remains vulnerable and we cannot yet rule out the possibility of further power outages.”

“This milestone encourages us to do more, faster, to ensure a secure electricity supply now and in the future.”

The president’s comments came a day after it emerged that Energy Minister Kgosientsho Ramokgopa is seeking state funding to build a 2.5GW nuclear power plant in South Africa. Work has reached an advanced stage and the team is finalising the procurement structure for the project, the Sunday Times reported over the weekend.

In addition, last week Eskom successfully commissioned Unit 5 at Kusile Power Plant, adding an additional 800 MW to the network.

“Thanks to Eskom’s urgent implementation of its Power Plant Recovery Plan, as well as its intensified maintenance schedule, there has been a marked improvement in the performance of the power plants that generate the majority of South Africa’s electricity,” Ramaphosa wrote in his newsletter.

Consumer trust

“The latest consumer confidence indicator from the Bureau of Economic Research showed that the easing of power outages was a factor that contributed to the increase in consumer confidence in the second quarter of this year,” he added.

“This improvement is also a boost for the national economy, which depends on the availability and reliability of electricity supplies to thrive. There is reason to be optimistic that business and investor confidence will increase.”

Referring to the Federal Reserve’s April monetary policy review, the president wrote: “As electricity supplies gradually improve, supported by ongoing private investment in renewable energy generation and increased maintenance by Eskom, South Africa’s near- and medium-term growth prospects should improve.”

“The Reserve Bank stressed the importance of fully implementing power and logistics sector reforms if growth is to improve. We are committed to continuing and completing the far-reaching structural reforms we began during the sixth administration to address immediate power supply issues and lay the foundation for future energy security,” he wrote.

“These reforms included removing the licensing threshold for new power generation projects, tax incentives for rooftop solar installations, opening more tender windows for renewable energy projects and improving Eskom’s operating profitability.

“The latest milestone in the structural reform journey is the commencement of trading last week by the National Transmission Company South Africa, which will own and operate the country’s electricity transmission system. This is part of the reforms we are undertaking to establish an electricity market that enables competition, ensures security of supply and revolutionises the energy sector.” — © 2024 NewsCentral Media

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