Minister of Energy’s Address at African Utility Week and POWERGEN Africa – Key Takeaways

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South Africa’s Minister of Energy Mr Jeff Radebe, spoke yesterday at the opening of The African Utility Week and POWERGEN Africa conference in Cape Town. The event has delivered once again in terms of high attendance, the quality of speakers plus networking and deal making opportunities.

There was much anticipation regarding the possible announcement on the country’s Integrated Resource Plan (IRP) by the Minister at the event. The IRP will deliver policy certainty and capacity allocation for energy resources leading up to 2030. The Minister merely announced that the IRP update will be concluded ‘imminently’.

“We are still engaging the social partners at NEDLAC. Cabinet approval of the IRP for South Africa will define a tangible plan for energy security that also enables the participation of Independent Power Producers (IPP) side by side with Eskom and municipalities”, he said. Read more on the draft IRP

Here are some of the other takeaways from the Ministers speech:

Black economic empowerment

The minster pointed out that South Africa’s Gini Coefficient is the highest in the world at around 0.62. South Africa is the most unequal society that one could live in, with a racial bias in the characterization of our inequality. The government’s black economic empowerment doctrine seeks to achieve skills transfer, community upliftment and local procurement from and support for small local enterprises in the governments infrastructure development programme.

Regional interconnection and integration

“We have identified regional interconnection and integration within the Southern African Development Community (or SADC) as an appropriate strategy for increasing energy trade within our region. Failure to aggregate our efforts will put unnecessary pressure on our meagre resources and hamper the achievement of the SDG 7 goal by 2030, for affordable and clean energy – we cannot compromise the possibility of uplifting the over 150 million rural poor in SADC, especially women and youth”.

Coal will be included in the energy mix

“Carbon capture and storage, underground coal gasification, coal to liquids and other clean coal technologies are critical considerations that will enable us to continue using our coal resources in an environmentally responsible way”.

Gas will play an increasingly prominent role

“For South Africa, we were excited a few weeks ago when Total announced the Brulpadda resource discovery in the Outeniqua Basin. Imported liquefied natural gas (or LNG), piped natural gas, imported liquefied petroleum gas (or LPG), indigenous gas like coal-bed methane and ultimately shale gas, are part of our strategy for regional economic integration within the SADC, in order to provide the energy infrastructure to support economic growth”.

Inga Hydro project still on with DRC

“South Africa is leading discussions with our regional neighbours on hydroelectricity, notably from the Democratic Republic of the Congo (DRC) in terms of the Treaty on the Grand Inga Hydropower Project. Read more

Public-private partnerships on the cards in the renewable energy sector outside of REIPPP.

“The Minister of Energy has powers to determine, through a Notice, that new generation capacity is required, including the power to determine that the electricity thus produced must be purchased by Eskom or any other licensee. This mechanism makes it clear that the Minister of Energy carries the energy security mandate.

Partnerships between the private sector and government need to be intensified as a necessity. With respect to the South African example, we might have attained some success in public-private partnerships in the renewable energy sector.

Future embedded model for households and businesses

The Schedule 2 amendments to the electricity act will address the constraints related to licensing potentially hundreds of thousands of rooftop PV systems, biogas and other small scale embedded generators smaller than 1 mega-Watt, and unlock investment in that space.

Author: Bryan Groenendaal


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