Ramaphosa energy plan reaction — ‘devil is in the details and how it is implemented’

27 Jul 2022

After President Cyril Ramaphosa’s announcement of an energy action plan, several stakeholders — from those in civil society to organised business and academia — commented on the government’s new plan to end rolling blackouts and transform the electricity sector in South Africa.

On Monday 25 July, President Cyril Ramaphosa announced an “energy action plan” that promised the potential to end rolling blackouts and fundamentally transform the electricity sector in South Africa. Broadly well received, stakeholders representing academia, the energy sector and the environmental lobby have, however, expressed cautious optimism.

Gaylor Montmasson-Clair, senior economist at Trade & Industrial Policy Strategies — a non-profit, economic research institution — told Our Burning Planet that “overall, I think it is a strong plan given the difficult circumstances that SA is in at the moment. The devil will be in the details and in how it gets implemented.

“In effect, plant maintenance, energy efficiency and renewable energy (with storage) are the key anchors of the plan. These are the right elements to relegate load shedding to a thing of the past as soon as possible and set SA on the road to a reliable, clean and affordable electricity supply,” said Montmasson-Clair.

“Importantly, the plan aims to rapidly ramp up the rollout of renewable energy technologies in the country, at the utility, commercial/industrial and residential levels. That is really positive and will hopefully underpin energy sustainability as well as local industrial development.”

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‘Most fundamental reforms in 20 years’

Roger Baxter, CEO of the Minerals Council South Africa, said in a statement: “President Ramaphosa outlined a detailed plan by the government to abolish the 100MW licensing cap on private sector renewable energy projects, ensure greater private sector participation to urgently install electricity generation capacity, address Eskom’s R400-billion debt and its internal crime and corruption problems, and streamline regulatory processes by eliminating red tape. This represents the most fundamental reforms of South Africa’s energy sector in 20 years.

“Overall, we rate this plan as very good for its boldness and for recognising that the private sector, along with fixing the reliability of Eskom, is the solution to energy security going forward. The Minerals Council and its members, which are already active in coming up with solutions, are ready to play their part.

“The president and Cabinet recognise that we have a fundamental energy crisis and that there can be no more tinkering around the edges. This is a comprehensive overall reform plan, with the private sector playing a critical role in ensuring South Africa’s energy security into the future. We support this bold and ambitious plan,” said Baxter.

More attention to storage ‘vital’

Prof Patrick Bond from the University of Johannesburg was more tepid in his analysis: “What we might term ‘non-invasive storage’ was not addressed. Instead of lithium dependency, it’s much more useful to consider pumped storage (small hydropower) in appropriate locations and molten salt.

“To really get off fossil fuels properly, and to have a national and regional system that modulates the different weather variables, more attention to storage is vital.”

Asked what some potential obstacles to achieving any of the planned actions might be, Bond replied: “People focus on coal-addicted or wannabe methane-addicted politicians like Gwede Mantashe, Cyril Ramaphosa or Valli Moosa, which is undeniable. Behind them, though, is the so-called ‘minerals energy complex’ which has become darker in complexion due to ‘pass-the-trash’ coal sales by Glencore, AngloCoal and South32 to BEE billionaires in recent years.

“A full-cost accounting that accounts for ‘stranded assets’ properly would be a great leap forward.”

Bond added that “Ramaphosa promises more renewables, which is great — although prices have soared thanks to the energy crisis following Russia’s invasion of Ukraine. But state-owned generation — a so-called ‘Green New Eskom’, as activists term their aspiration — was missing”.

The Green New Eskom plan, developed by the Climate Justice Coalition (CJC), a South African grouping of civil society, grassroots, labour and community organisations, describes as its central demand “a rapid and just transition to a more socially owned, renewable, energy powered economy, providing clean, safe, and affordable energy for all, with no worker and community left behind in the transition”, which would include seeing that the utility moves away from coal-fired power plants and instead invest more heavily in renewable energy generation.

Embrace of renewables, feed-in tariffs ‘welcome’

Dr Alex Lenferna, climate campaigner at 350Africa.org and secretary of the CJC, said: “The president’s energy plan recognises that renewable energy holds the key to tackling South Africa’s energy and climate crises. While there are significant concerns about several elements of the plan, its embrace of a renewable energy future is welcome.

“Of course, coming up with a plan is the easy part… implementing it will be the difficult part, particularly as Minister Mantashe’s Department of Mineral Resources and Energy failed to deliver on the last emergency energy plan.”

Greenpeace Africa’s Climate and Energy campaigner, Thandile Chinyavanhu, said “Greenpeace Africa applauds the announcement of feed-in tariffs. We have been calling for this for some time. It allows South Africans — who are able — the opportunity to meaningfully contribute to the end of load shedding.

“After years of campaigning, we welcome the decision to remove the arbitrary threshold for renewable energy generation. South Africa has not even begun to exhaust its renewable energy potential, and this is a big step towards that end,” said Chinyavanhu.

“We also know that there is massive potential for job creation in a just transition to renewable energy, and South Africa’s unemployed youth are eager to join the workforce.

“The President must keep people and the planet in mind. Stabilising our energy system and safeguarding our environment are not mutually exclusive; renewable energy is the answer to both the energy and climate crises. South Africa has the opportunity to lead the world out of fossil fuel dependence, and this won’t be achieved by continued reliance on fossil fuels,” said Chinyavanhu.

Potential flaws

A statement by the World Wildlife Fund South Africa (WWF) said that while “in general WWF feels that the plan is a strong means of taking the country out of our current electricity crisis and laying the pathway for future development, we would like to caution against some potential flaws.

“We urge firstly that the waiver of regulations around installation of energy infrastructure should not encompass environmental considerations, since there can still be significant impacts on biodiversity.”

Khungeka Njobe, environmental programme head at WWF, said “the strategic environmental assessment for grid infrastructure and the Renewable Energy Development Zones does indicate areas of potentially low impact, but waiving environmental considerations can result in long-term problems that it would be best to avoid.

“The mooted call for fossil gas infrastructure is concerning, as is the mention of ‘mobile generators’, which we are concerned may include the invidious Karpowerships.

“Whilst WWF concedes that hydrocarbons are a potential long-term energy storage mechanism, they are not needed until we have a very high renewable penetration in the electricity system, by which time costs of other grid management options, like green hydrogen, would have fallen further.

“Moreover, while fossil gas may have a short-term role for peaking generation, when compared to the price certainty of batteries, it represents both a financial risk and a certain climate impact that we must avoid.”

James Reeler, a senior climate specialist at WWF, said “South Africa’s commitment under the Paris Agreement requires a phase-out of fossil fuels, and the potential to lock in emissions from fossil gas infrastructure could both undermine this goal and damage our economy as the rest of the world starts introducing real border carbon adjustment mechanisms.

“To this end, we recommend that we accelerate the development of a new IRP that better reflects the reality of the energy sector and our international climate commitments. The near-term electricity crisis plan must not lock in fossil fuels, and we must bear this in mind both at present and as we shape the new energy future for our country. We look forward to the effective roll-out of this plan,” said Reeler. OBP/DM

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Business Maverick

‘Most fundamental reforms in 20 years’

More attention to storage ‘vital’

Embrace of renewables, feed-in tariffs ‘welcome’

Potential flaws