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Paving the way for privately owned power plants
30 August 2021
South Africa has been battling to keep the lights on, with load shedding – scheduled blackouts – being frequently implemented since 2008 to reduce strain on the electricity grid. In the first half of 2021 alone, the country spent 650 hours (the equivalent of 27 full days) in the dark, according to a report by the Council for Scientific and Industrial Research (CSIR).
The report found that coal-fired power plants contributed 81.8% to South Africa’s electricity, with only 11% coming from renewable energy sources. National power utility, Eskom, has struggled to keep up with demand due to old and failing infrastructure, problems with coal supply and quality, and mismanagement.
Shortage of energy in South Africa
It is predicted that there will be an energy shortfall of between 4,000 and 6,000 megawatts over the next five years, making it more important than ever to include other forms of power in the energy mix to keep the lights on and the economy going.
This is why South Africa’s government is now allowing companies to build their own power plants with 100MW of generating capacity without obtaining a license. President Cyril Ramaphosa announced in June that private power generation allowances would be increased from 1MW and the changes were gazetted on 12 August.
Diversifying South Africa’s Energy Sources
Private power plants will still need to register with the National Energy Regulator of SA and get permits to connect to the grid, but these will be easier to obtain than a license. Excess power can be sold back to the grid, subject to agreements with Eskom and the relevant municipalities. This is a step forward in diversifying South Africa’s energy sources and improving its power supply. The move provides opportunities for intensive energy users, like mines, to generate their own power.
The Western Cape, which is a leader in the country and continent when it comes to renewable and clean energy, is actively encouraging investment into green power. The City of Cape Town already plans to increase its capacity to produce renewable energy to 450MW soon, reducing its dependency on the national grid.
The city, which boasts modern, reliable infrastructure, hopes that the government’s new power plan will continue to encourage growth and development, and help it to maintain its position as a world-class tourism and business destination.
