The South African government has enlisted the private sector in an emergency plan to tackle the worst-ever rolling blackouts in Africa’s most industrialised economy, by scrapping controls on companies generating their own power outside the broken Eskom monopoly.
President Cyril Ramaphosa said on Monday that a wave of new private generation was needed to rescue the country’s grid after recent power cuts of unprecedented intensity “disrupted all of our lives and caused immense damage to our economy”.
A cascade of breakdowns and illegal strike action at Eskom’s fleet of ageing coal stations have plunged South Africans into darkness for up to 12 hours a day this winter, accelerating the utility’s long decline and adding to pressure on the ruling African National Congress.
South Africa will also double its renewable energy procurement this year to more that 5,000 megawatts. There will also be incentives for rooftop solar panel owners to sell power to Eskom under expedited policies to reduce so-called load-shedding.
After a decade of unstable power supplies, “South Africans are justifiably frustrated, and they are also angry,” Ramaphosa said. “The shortage of electricity is a huge constraint on economic growth and job creation.”
The removal of generation limits will make it easier for mines and other businesses, like solar farms, to set up their own projects and then sell excess power to Eskom.
The licence threshold was already raised from 1MW to 100MW last year, a barometer of Ramaphosa’s increasing resort to private sector supplies as Eskom’s decline has accelerated.
“South Africa has not even begun to exhaust its renewable energy potential, and this is a big step towards that end,” Greenpeace Africa said.
Investors warn that even without licensing, the paperwork required to set up generation is too complicated and will take many years to get online.
Ramaphosa must deal with the legacy from years of failure to invest new supply. Eskom has been forced to keep decades old plants running without proper maintenance to keep the lights on.
That has left Eskom with as little as 26,000MW of capacity to meet national demand that peaks at 32,000MW in winter — forcing it to cut off up to 6,000MW from the grid at a time.
Despite the crisis, the ANC, whose heartlands are the coal-producing areas that supply Eskom with power, is still divided over the decision to take power generation out of the hands of the state. South Africa’s last complete procurement of independent renewable power was in 2016.
South African cities like Cape Town, which is under opposition control, are already racing for their own power and away from Eskom.
The government will also develop a plan by October to deal with Eskom’s debt of nearly R400bn ($24bn), Ramaphosa said.
“These actions are directed at fundamentally transforming the electricity sector and positioning it for future sustainability,” he added.
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