IN CASE YOU MISSED IT: 7 ways government plans to increase energy capacity

President Cyril Ramaphosa delivered his State of the Nation address on Thursday night.
President Cyril Ramaphosa delivered his State of the Nation address on Thursday night.
Image: ESA ALEXANDER/SUNDAY TIMES

Financially viable municipalities may now procure their own power from independent power producers, President Cyril Ramaphosa on Thursday .

Delivering his state of the nation address  — delayed for more than an hour by interjections from EFF MPs  — the president announced a list of seven measures to rapidly increase the capacity of energy generation outside Eskom.

In a speech that pulled no punches on the power crisis, problems at other state entities, slow economic growth and soaring government expenditure, Ramaphosa  said load-shedding was unavoidable but it must be undertaken in a manner that is predictable and minimises disruption  to business and households.

“We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers,” Ramaphosa said.

Municipalities such as the City of Cape Town, business leaders and, lately, the ANC, backed a plan to allow municipalities to be less reliant on Eskom.

“Over the next few months, as Eskom works to restore its operational capabilities, we will be implementing measures that will fundamentally change the trajectory of energy generation in our country,” Ramaphosa said.

As part of Ramaphosa’s planned steps for the state to become less reliant on the troubled power utility, he said that the Integrated Resource Plan of 2019 would be implemented to allow for the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal.

“We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months of approval,” Ramaphosa said.

He said the government  would allow more independent power producers to supply energy to the grid.

Though the government would effect a decrease of reliance on Eskom, Ramaphosa said  it had  worked on a social compact that seeks an “efficient, productive and fit-for-purpose Eskom that generates electricity at affordable prices for communities and industries”.

But to do that, Ramaphosa said, it would require a drastic reduction of costs and an effort to reduce Eskom debt.

This would include the review of irregular contracts as well as inject fresh capital where needed.

The government had also decided to establish a sovereign wealth fund as a means to preserve and grow the country, Ramaphosa said.

He did not provide details on where the money for such a fund — which is likely to be controversial  — would come from.

Ramaphosa also confirmed that the government was proceeding with the establishment of a state bank to extend access to financial services to everyone.

He said finance minister Tito Mboweni would provide details on these two initiatives in his budget speech in two weeks’ time.

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