Energy crisis declared national disaster

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 10 Feb 2023

The energy crisis gripping the country is now a national disaster – with immediate effect – president Cyril Ramaphosa declared yesterday.

Ramaphosa announced the state of disaster as government’s response to the power crisis, during the State of the Nation Address last night in Cape Town.

The electricity shortage in SA, one of Africa’s most advanced economies, is so severe that power utility Eskom has implemented around the clock power cuts.

This has disrupted businesses and the economy, putting jobs at risk in a country that is already struggling with a high unemployment rate.

In his speech last night, Ramaphosa said: “In a time of crisis, we need a single point of command and a single line of march. Just as we address the cause of the crisis, we also need to address its impact. The crisis has progressively evolved to affect every part of society.

“We must act to lessen the impact of the crisis on farmers, on small businesses, on our water infrastructure, on our transport network and a number of other areas and facilities that affect our people’s lives.

“In considering all these matters and the crisis that we are in, the National Disaster Management Centre has consequently classified the energy crisis and its impact as a national disaster. We are therefore declaring a national state of disaster to respond to the electricity crisis and its effects.”

To deal more effectively and urgently with the challenges, the president said he will appoint a minister of electricity in the presidency to assume full responsibility for overseeing all aspects of the response.

“The minister will focus full-time and work with the Eskom board and management on ending load-shedding and ensuring the Energy Action Plan is implemented without delay.”

The president, who has in recent months been punting renewable energy, said one of the potent reforms government has embarked on in dealing with the energy crisis is to allow private developers to generate electricity.

He explained: “There are now more than 100 projects, which are expected to provide over 9 000MW of new capacity over time. A number of companies that have participated in the renewable energy programme will soon enter construction and deliver a total of 2 800MW of new capacity.

“Eskom will procure emergency power that can be deployed within six months to close the immediate gap. We are investing in new transmission lines and substations, especially in areas such as the Eastern Cape, Northern Cape and Western Cape.

“All of these measures will result in a huge increase in power to the grid over the next 12 to 18 months and beyond. This power will be in line with our diverse mix of energy sources, including our current coal-fired power stations, solar, wind, gas, nuclear, hydro and battery storage.”

In addition, Ramaphosa announced a solar tax break, as an incentive in dealing with the crisis and to encourage the adoption of solar energy.

“In his budget speech, the minister of finance will outline how households will be assisted and how businesses will be able to benefit from a tax incentive.

“National Treasury is working on adjustments to the bounce-back loan scheme to help small businesses invest in solar equipment, and to allow banks and development finance institutions to borrow directly from the scheme to facilitate the leasing of solar panels to their customers.”

In response to the speech, Dom Wills, CEO of the Sola Group, embraced the tax incentives, saying: “The tax breaks for rooftop solar and loans to small businesses are very welcome – 5 000GW of rooftop solar would reduce more than half of load-shedding.

“The State of the Nation Address showed the president’s intention to raise the stakes in handling the electricity crisis by dedicating more resources and removing obstacles to progress energy production. I’m hopeful that the acceleration of energy projects could mean much-needed less red tape for connecting new plants.”