ANC lekgotla lauds renewables, 4IR as new growth areas

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 22 Jan 2020
President Cyril Ramaphosa.
President Cyril Ramaphosa.

The African National Congress (ANC) has committed to build new growth areas such as renewable energy, among others.

This was revealed by president Cyril Ramaphosa in his closing remarks at the ANC national executive committee (NEC) lekgotla held this week in Irene.

The lekgotla brings together ANC leaders in government and comes after the ruling party’s NEC meeting.

“Our meeting takes place at a pivotal moment for our country, when our economy is facing severe challenges and many of our people continue to endure great hardship,” said Ramaphosa.

“The lekgotla agreed that we should build new growth sectors such as renewable energy, creative industries, aviation industries and 4IR [fourth industrial revolution]-related activities,” he added.

Following the lekgotla, Business Day yesterday reported the ANC endorsed a “market-friendly” approach to the problem of SA’s energy shortage, including allowing municipalities to procure their own energy, expanding the renewable energy independent power producer (IPP) programme and freeing up regulations around self-generation by business.

Increasing energy demand

Renewable energy industry body the South African Wind Energy Association (SAWEA) comments the wind industry certainly supports the approach of relooking at how energy is supplied in SA, so that the system can evolve and adapt to fit the increasing energy demand.

“To shift away from a centralised monopoly to a more efficient decentralised generation model will increase competition and drive down energy prices,” says Ntombifuthi Ntuli, CEO of SAWEA.

“This will ultimately stimulate the economy and support the growth South Africa is seeking, in line with a global shift away from large centralised utilities. However, the focus needs to remain on implementing the country’s resource plan in order to address the short- and long-term electricity supply capacity constraints and ensure sustainable economic growth.”

SAWEA says with private sector participation in the energy generation business, where municipalities and large-scale private power users can purchase power directly from IPPs, the benefit of introducing competition into the electricity generation market will naturally result in price reductions while increasing generation capacity.

“We need the market to be opened for private power producers to be able to supply electricity to the national electricity system. Private renewable energy producers can supply electricity to intensive users at a rate of 25% less than Eskom mega-flex tariffs, this includes municipalities,” says Ntuli.

Cape Town call

Meanwhile, Cape Town mayor Dan Plato has called on energy minister Gwede Mantashe to “act now so that the city can proceed with buying independently-produced power in future”.

In a statement, Plato says: “I will be writing to the national minister of energy, Mr Gwede Mantashe, asking him as a leader in the ANC, to urgently clarify the regulations required for purchasing power from independent power producers.

“In addition, on behalf of the City of Cape Town, I will ask him not to oppose the pending court matter between the city, the minister of energy and the National Energy Regulator of South Africa (NERSA). This is an important case as legal clarification is required for the future purchase from IPPs to become a reality.”

In December 2019, the Department of Mineral Resources and Energy issued a media release stating it was seeking immediate measures to ensure security of energy supply.

“We responded and indicated that if the minister were serious about implementing immediate measures, he would agree to the city’s request to purchase energy from IPPs.”

Currently, says Plato, the city is not allowed to purchase power from IPPs and it is forced to buy electricity primarily from Eskom.

The city is a staunch proponent of more affordable, secure, cleaner and diversified energy sources, he notes, adding this has prompted the city to take the minister and NERSA to court.

“Unfortunately, we have not had any response to our offer and we still await our day in court. The matter is scheduled to be heard in the Gauteng High Court in May 2020.”

According to Plato, the city’s fight to procure energy from IPPs dates back to 2015, when the city wrote to then minister of energy, Tina Joemat-Pettersson, requesting a Section 34 determination that would allow it to procure solar energy and wind energy from IPPs.

In terms of Section 34 of the Energy Regulation Act of 2006, the minister may, in consultation with NERSA, determine the types and quantity of electricity that is to be generated and the manner in which it may be sold.

“Since 2015, we have written regularly to successive ministers on this matter, and eventually had to turn to the courts seeking a declaration that a determination by the minister of energy is not required for an IPP to produce and sell electricity to the city.