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Government opens up electricity market to deal with load shedding

An Eskom power sub-station near Welgelegen. Picture: Ian Landsberg/African News Agency (ANA).

An Eskom power sub-station near Welgelegen. Picture: Ian Landsberg/African News Agency (ANA).

Published Feb 12, 2023


The Presidency says it is pulling all the stops to deal with the electricity crisis including opening up the market and securing emergency power by Eskom.

Head of project management in the Presidency Rudi Dicks said on Sunday part of the immediate need was to get more megawatts onto the grid.

In his State of the Nation address President Cyril Ramaphosa said they were fast-tracking measures to deal with the energy crisis.

He said they wanted to get at least 9 000MW from other sources of energy by the end of the year.

Dicks said they wanted to make sure that they get all key stakeholders in the energy sector to reduce the power outages.

“It is important to stress the one area, the ability of Operation Vulindlela to open the electricity market space, particularly at the generation level and this was through the schedule 2 amendment, which initially started in 2021 when Minister Gwede Mantashe promulgated that amendment of schedule 2 to raise the cap from 1MW to 100MW.

“That has significantly opened up the private space. There are now potential 104 projects exceeding 9 000MW,” said Dicks.

This was one of the many interventions they were making to reduce levels of load shedding in the country.

Eskom has over the last few weeks been implementing various stages of load shedding everyday.

This has left many businesses reeling.

Dicks said what was being done is part of the programme announced by Ramaphosa last July to address the energy crisis.

He said the key factor in all of this is to add more megawatts onto the grid.

They also want to use other sources of energy including solar, gas, wind and battery storage.

The ANC has over the last few years been talking about having an energy mix to address the issue of energy.

Dicks also said the second area they were working on is to secure emergency power.

“The second part, which is important also for immediate emergency power is precisely that which refers to as a standard offer purchase, an emergency power procurement. Eskom will go to the market in the next few days,” said Dicks.

This would include dealing with firms and large industrial users whose by-product is energy and they can immediately sell that to Eskom.

That energy would not take months to get onto the grid, but immediately.

“It will be through a standard offer purchase, which is more or less what was around many years ago, which is standard of power purchase agreements.

“These are firms, large industrial users whose by-product is energy and therefore they can immediately dispatch that onto the grid. Paper mills, for Sappi, Mondi and Sasol,” he said.

“It opens up the market for those who can dispatch immediately.

“The difference here is that it’s not six months, it’s not 12 months.

“It is what is immediately available,” said Dicks.

This allows Eskom to go to an emergency procurement.

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