Private power generation the crux of president’s new plan

Independent energy analyst Chris Yelland considers step one should be to bring on the new generation capacity fast. It’s going to come in the initial instance from the private sector.

This interview occurred before President Cyril Ramaphosa’s address on Monday evening. Read about his plan, here.

FIFI PETERS: Last week President Cyril Ramaphosa wrote in his weekly newsletter that government would be announcing a new plan to address our power crisis. He hasn’t yet announced that plan, but today there was a leaked plan on solving for the energy crisis, and it includes interventions to fix Eskom, plans to expand private generation of power, as well as changing some requirements for government getting energy from independent power producers.

So let’s have a conversation on this ahead of the president’s address to the nation later this evening at 20:00. Independent energy analyst Chris Yelland joins us for more. Chris, thanks so much for your time. Apparently, allegedly, supposedly, this plan was presented to political parties by the presidency earlier this morning. It does involve quite a number of approaches, improving Eskom’s capacity, as well as increasing the energy supply. What do you think? Have you seen the leaked plan?

CHRIS YELLAND: No, I certainly haven’t. It is unfortunate, I suppose, that it gets leaked, but today it’s almost inevitable, especially if released to political parties this morning that seek to sort of gain political advantage in one way or another. So I suppose it’s inevitable that it gets leaked. But no, I haven’t read it.

But I have read the articles about it and I think it’s in line with expectations that we firstly need a massive new build, which can only in the short term come from customers of electricity; that is self-generation, embedded generation, distributed generation, wheeling of power across the grid.

The government’s procurement processes will come in in due course, but cannot deliver quickly in the very short term. So that’s something to be worked on in the longer term. And we need this new generation capacity urgently to give Eskom sufficient space to do the necessary maintenance, to have the necessary generation reserve to enable them to do the maintenance without lowering their availability, because at the moment we are in the middle of load shedding right now, as we speak. So there is no generation reserve. So if we want to do the maintenance we should be doing, we’re going to have to switch off generators, and that means reducing the availability and not increasing it in the short term.

So step one, in my view, bring on the new generation capacity fast. It’s going to come in the initial instance from the private sector. Public procurements will follow thereafter. Work on Eskom’s availability and do everything possible to unlock bureaucracy and red tape that is holding back the development of these solutions in the short term.

FIFI PETERS: So if we assume that some of the leakages will be part of the new compact, as it were, to solve for the energy crisis, do you think that the proposals in those leakages go far enough, and would you add anything further perhaps in your view that could help solve for our crisis which our president should maybe include in his address later on this evening?

CHRIS YELLAND: I think the president has consulted extremely widely on this matter. That’s why we’ve had this delay. There have been far-ranging consultations with all kinds of stakeholders, and I think all the possible solutions have been put in on the table in front of the president. To some extent it’s a case of keeping as many stakeholders happy as possible. I think in these matters one has to actually go a little bit further than what is perhaps immediately needed because, when you’re bringing multiple solutions to the table, some of them are going to work and some of them are not going to work. So one has to have something up one’s sleeve in terms of a little bit extra, so that there is sufficient space if one or two of the initiatives don’t pan out as planned – as is inevitable. So I think all the options are on the table and have been on the table, and I don’t think I’ve got much to add at this stage.

FIFI PETERS: Yes. I think I look forward to talking to you once we hear what he has to say and hearing any additions that you may have – or not have – after the president has spoken.

But, Chris, we’ll leave it there for now. Chris Yelland is an independent energy analyst.



You must be signed in and an Insider Gold subscriber to comment.




Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us:

Search Articles:
Click a Company: