Johannesburg - The cost to South Africa's economy of power outages is significant and will make potential investors uneasy, President Cyril Ramaphosa said on Monday.
In his weekly column, Ramaphosa said last week's unexpected rolling blackouts - which state-owned electricity company Eskom blamed on the failure of some of its generating units - disrupted the lives of millions of people in their homes, workplaces and businesses.
"The cost to our economy of power outages is significant. It contributes to investor unease at a time when we are trying to attract more domestic and foreign capital to South Africa and to improve our global rankings on ease of doing business," he said.
"It is also understandable that South Africans became frustrated and angry. This latest round of load shedding makes even clearer the urgency with which we must act to protect our energy supply."
He said the Integrated Resource Plan (IRP) released last week -- South Africa's policy blueprint for its industrial, commercial and household energy needs until 2030 -- would support a diversified energy mix including coal, natural gas, renewable energy, battery storage and nuclear power.
The country currently relies on Eskom for about 95 percent of its electricity, most of it coal-fired.
Ramaphosa said Eskom’s financial position remained untenable and its current operational model difficult, pledging the announcement soon of a permanent CEO who, together with a strengthened board, would be tasked with turning the entity around.
The restructuring of Eskom into three entities – generation, transmission and distribution – was critical to responding effectively to the evolving technologies and developments in the global energy industry.
"Eskom needs improve its credit rating so that it can raise funding for both his operational and capital expenditure," he said. "The sheer scale of Eskom’s debt is daunting. Further bailouts are putting pressure on an already constrained fiscus. As government has made clear, the most recent support to Eskom comes with stringent conditions. Fruitless and wasteful expenditure must be stopped."
Ramaphosa called for urgent attention to the debt owed to Eskom, with defaulting municipalities accounting for over R23.5 billion.
He noted that the IRP envisaged a move towards steadily reducing emissions through a greater uptake of renewables, stressing the need to implement a ‘just transition’ to ensure that communities and workers whose livelihoods depend on the fossil fuel industries "are not left behind".
"That is why we will be developing a clear framework for the process of decommissioning coal fired power stations that have reached the end of their operational cycle," the president said.