CEO Blog

by Brenda Martin

Brenda is an energy policy and planning practitioner. She has worked as an implementer of small-scale renewable energy projects, a researcher on issues of electricity planning (particularly as these relate to renewable energy and nuclear power) and a facilitator of transition process. She is interested in South Africa’s continued socio-political energy transition toward a larger share of renewable power supply and the realisation of opportunities for both energy security and socio-economic growth within this.

REIPPPP R4: SHORT TERM CHALLENGES DELAYING LONG TERM SYNERGY

Recent developments both nationally and internationally have highlighted the challenges inherent in smoothly continuing with the roll-out of renewable energy under the REIPPPP programme while considerable volatility exists in the government institutions that are the co-custodians of the process. The REIPPPP process is a great success with considerable long and also short term benefits, not only financially but also socially and macro-economically. And yet, with so much in disarray in Eskom, despite every intuition that we should forge ahead aggressively with an expanded REIPPPP, it becomes nigh impossible to avoid delays and temporary discontinuities.

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The Long View: Fixing Energy To Enable The National Development Plan

The National Development Plan remains the only credible, holistic vision of a future South Africa that is premised on a better life for all. It is explicitly after a “walk together”, “win-win” outcome, in stark contrast to competing visions that implicitly assume that a “better life for all” isn’t feasible and that salvation is to be found in political power plays and policy directions that aim to ensure a better life for some, at the expense of others.

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On silver clouds with dark linings

The power has just been restored in the SAWEA Office. It went off at 8 am, and for a while all was in darkness.

At 09h11 it came back on. A colleague says he was driving, there was a large area without electricity, where many people surely experienced inconveniences greater than having to rely on the battery of a laptop or having to postpone the morning coffee by an hour.

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The critical role of energy revealed in the medium term budget

Last week marked the Minister of Finance’s Medium Term Budget Policy Statement.

South Africans will be well aware that it took clear cognisance of the country’s delicate position, with expenditure needing to be cut and income needing to be increased in order to restore the desired financial metrics in the next few years. A tax increase was announced, as was a likely ZAR 25 billion equity injection for Eskom, to be funded from the sale of non-core state assets. Later in the day in a radio interview, Mr Cecil Morden of the National Treasury indicated that the tax increase would aim to raise an additional ZAR 15 billion per annum. There were also plans to cut the budget deficit from something over 4% to something below 3% over the next few years. The budget deficit is on a base of about ZAR 900 billion of taxes raised annually, so is in the order of ZAR 40 billion per annum, with the difference between the existing shortfall and the desired one at approximately ZAR 15 billion per annum.

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Developing Plan B for energy in South Africa

Recent events in the broader political context have highlighted the growing consensus of South Africa’s energy dilemma. Even politicians usually keen to avoid such nomenclature have now used the word “crisis” in this context. Other than renewable energy and some waste to energy, there is no source that can give us more than we have now in the next five years.

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A Change of Seasons in the South African Energy Sector

In the world of energy in South Africa, it has very much been the winter of our discontent. Structural challenges laid increasingly bare in years past have grown to fault lines. Inertia is no longer an option: with the country’s sovereign credit rating hovering precariously above junk status, we now know that collectively we just have to reinvent our electricity sector - and we have to get it right the first time. If electricity works, the economy has a chance to work and the Grim Reaper that is a further credit downgrade can be kept from the door. All the contraries are equally true, if we fail.

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