Govt pins hopes on renewables to overcome energy woes

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MTBPS 2021: South Africa’s government wants to accelerate the transition to renewable energy sources, says finance minister Enoch Godongwana.

This, as power utility Eskom continues with blackouts, with the country currently on stage three of load-shedding.

Reducing reliance on Eskom forms part of the structural reforms proposed by government. Furthermore, government is looking to the reforms to improve competitiveness, productivity, investment and employment.

Delivering his inaugural Medium-Term Budget Policy Statement (MTBPS) to the National Assembly this afternoon, Godongwana noted that part of government’s first and immediate task in accelerating economic reforms is to ensure stable energy supply.

Additionally, the state must reduce the risk of load-shedding and accelerate the transition to renewable energy sources, he stated.

“All of our efforts over the past 13 years have been to fix Eskom, instead of addressing security of supply by adding additional capacity to the grid.

“We have already made significant progress in correcting this: the amendment of Schedule 2 of the Electricity Regulation Act of 2006 has raised the licensing threshold from 1 to 100 megawatts.

“It has also made it possible for private power generators to sell directly to customers. This will alleviate the risk of power cuts. The amended regulations will further enable municipalities to self-generate or procure power directly from independent power producers.”

According to Godongwana, the process to reduce reliance on Eskom has begun by diversifying the primary energy sources.

“The gains from this diversification are demonstrated by the outcome of the most recent round of the Renewable Energy Independent Power Producer programme.

The 25 projects that are part of the latest round of Bid Window 5 will generate more than 2 500 megawatts of power at a weighted average price of 47.3 cents per kilowatt hour. This is the cheapest rate achieved in the history of the programme and is among the lowest rates achieved worldwide.”

He explained that over the longer term, creating a competitive energy market will help contain the costs of generating electricity and support gross domestic product growth.

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