South Africa Government
South Africa Government
05/31/2023 | Press release | Distributed by Public on 05/31/2023 22:58
Minister Kgosientsho Ramokgopa: The Presidency (Electricity) Dept Budget Vote 2023/24
President of the Republic, His Excellency, Cyril Ramaphosa
Speaker of the National Assembly, Ms Nosiviwe Mapisa-Nqakula,
Chairperson of the National Council of Provinces, Mr Amos Masondo,
Deputy President Paul Mashatile,
Members of Parliament,
Fellow South Africans.
Consultation and Stakeholder engagement:
Among the wide spectrum of stakeholders behind our efforts to reduce the intensity and regularity of load shedding, including the Unions, Industrial and Energy Intensive Users, Automotive Original Equipment Manufacturers, Industry bodies, The Retail Industry Association, Organised Property Owners and Developers, Original Equipment Manufacturers in the power generation sector, The Provincial Government of the Western, Gauteng and Eastern Cape,
The Municipalities of Nelson Mandela Bay, Buffalo City, Cape Town and Johannesburg Metro's as well as SALGA
Diplomatic community through their missions here, including the embassies of Germany, China, Vietnam, Mozambique and the USA. We have just returned from a one-day working visit to our neighbour, Mozambique.
The Multi-lateral Development Banks(MDB), international aid agencies and development finance institutions
Without exception, these stakeholders have pledged their support for our strategic interventions to reduce the intensity and frequency of load shedding.
The winter outlook indicates an increased risk of supply shortfall against expected demand, with our worst-case scenario indicating that load- shedding could intensify to higher stages if our interventions are unsuccessful.
I should hasten to stress that an increase in load-shedding levels does not mean a greater risk of a national blackout; instead, load-shedding is a tool to prevent such an occurrence by managing the demand for electricity at a given time.
A National blackout or grid collapse remains highly improbable as multiple safeguards are in place to ensure that it does not occur.
Surviving Winter (0-120 days)
Potential MW Gain: 7000MW
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ACTION |
MW |
LS Stage |
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1. CONTINUOUS IMPROVEMENT TO EAF FROM THE CURRENT 54% (MAY 2023) BY 9 PERCENT POINTS TO 65% BY EARLY 2024 (1% pt equivalent to 500MW |
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Installed Units
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(3% pt inc) 1400MW |
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2. Exploiting Peaking Plants |
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Ramping the OCGTs to achieve a load factor of 21%+ |
2000MW |
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3. Additional Generation Capacity |
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Contracting has been finalised for close to 400 MW of additional capacity through the Standard Offer Programme, which will be online in the coming days. This extra capacity comes from Kelvin Power Station and large-scale industrial producers. |
400MW |
40% of stage 1 |
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80 MW is immediately available from Nacala Powership (Mozambique) - activation of PPA under emergency procurement through ESKOM |
80MW |
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City Power also has diesel generators that can produce up to 100MW. These units are being assessed to determine the cost-benefit analysis of a return-to-service refurbishment. |
100MW |
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The City also have a 48MW turbine which is being assessed to determine the technical feasibility and cost- benefit analysis of a return-to-service refurbishment. |
48MW |
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4. DEMAND SIDE MANAGEMENT |
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According to recent Stats South Africa data, the country has at least 5.4 million electrical geysers connected to the grid. Studies show that the average daily energy consumption of these is about 6kWh. Assuming that 50% of this is consumed during the morning and evening peak hours, geysers' average peak power demand is above 3.2 GW, a significant portion (approximately 10 percent of the average daily power demand). |
3200MW |
3 stages |
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CoJ is expanding its Demand Side Management / Load control Infrastructure |
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The City of Cape Town has implemented a load management programme targeting |
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The Nelson Mandela Bay Metro has rolled out geyser control units to and is working with the Ministry of Electricity to secure additional funding to expand the programme |
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Ministry to issue RFI before end of July 2023 for technology and funding partners to roll out DSM interventions |
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Madam Speaker, allow me to express, on behalf of the People and Government of South Africa, our profound gratitude to the Socialist Republic of Vietnam and in particular, their Ambassador to South Africa, HE Hoang Van Loi, whose tour of duty in our Country ends today for their support and cooperation in sharing their experiences of their successful demand side management and energy efficient programme. |
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5. Micro Gridding/Islanding of Hospitals, Critical Infrastructure and Industrial Nodes |
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The Department of Health has identified 213 hospitals for exclusion from load-shedding, of which 76 hospitals have been excluded to date, with work underway to exclude a further 46. The remaining hospitals have sufficient backup power supply from diesel generators, nevertheless Diesel cost remains a major expenditure driver, especially during higher load-shedding stages. |
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Apart from the diesel costs, the electricity costs are significant. An embedded generation option for health facilities (hospitals) will reduce operating costs whilst providing security and quality of supply. |
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The Ministry of Electricity has developed costing scenarios for installing an embedded generation (solar installation) to address the impact of load shedding and mitigate the impact of high diesel costs on medical facilities (large and small hospitals)
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A rapid deployment of embedded generation or "micro- grid" solutions, including roof-top solar for hospitals, other critical installations, and economic hubs, will be possible through an aggregated power purchase agreement. Ministry to issue RFI before end of July 2023 and outline a fast track procurement process to secure IPPs for micro gridding. |
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Dear Madam speaker, please also allow me to express my appreciation to the Government of the Republic of China, through their Ambassador to South Africa, HE Chen Xiaodong for the generous technical and equipment support they continue to Offer. |
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6. WHEELING AND FEED-IN-TARIFF |
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The Ministry of Electricity will, supported by the Operation Vulindlela Programme Office and NECOM, develop and publish a National Wheeling Framework, as well as Feed-in-Tariffs and Net-Zero Billing Tariff frameworks to standardise the application processing, technical enablement and billing. |
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These Frameworks will be published before the end of July 2023 for stakeholder consultation, followed by the formal process of seeking the concurrence of the National Electricity Regulator of South Africa (NERSA), and it is anticipated that a national framework and tariff guidelines will be in place by the end of the 2023 calendar year |
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Ministry to create urgent technical/financial capacity for Municipalities to process wheeling agreements to support the energy crisis and lower demand.
This capacity should inter-alia develop standardised contract templates, tools (or proposals) to standardise wheeling charges and tools (or proposals) to bill and administer wheeling accurately. |
10x 50MW 500MW (virtual) |
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Stabilisation (August 2023 - January 2024)
Potential Net Gain 19 920 MW
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ACTION |
MW |
LS Stage |
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1. ADDITIONAL GENERATION CAPACITY |
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Kusile Unit 5 (800MW) will be returned by October 2023 (800MW) Units 3,2,1 will be brought online from 28 November, 11 December and 24 December, respectively (800 MW each | 2400 MW) |
3200MW |
3 stages |
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An interim solution is being implemented to return Medupi Unit 4 (800 MW) to service by April 2024, earlier than initially anticipated, using a second-hand stator from a decommissioned plant in the Netherlands |
800MM |
1 stage |
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Ministry to commence Emergency Procurement (Powerships based on 5 yr contracted PPA) |
2000MW |
2 stage |
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SMALL-SCALE EMBEDDED GENERATION & ROOF TOP SOLAR |
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For every 1000 households that install a medium- sized solar system), 5MW of power is taken off the grid. To reduce one stage of load-shedding, or 1000MW, 200 000 households need to implement a similar system. |
1000MW |
1 STAGE |
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The South African Property Owners Association (SAPOA) estimates that its members (Commercial Property Owners) have 100 million square meters of rooftop space to install solar panels. Based on a 50% usage, they estimate 9500 MW of energy on grid consumption can be "saved", effectively creating a virtual power station, twice the size of Kusile. The Ministry will make technical capacity available to assist the affected municipalities to fast-track the wheeling applications and interim feed-in tariff/net zero billing. |
9500MW |
Up to 9 STAGES |
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The Temance gas-to-power facility is currently under construction (Mozambique) and will offer 420 MW by November 2024 |
420MW |
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2000MW gas-to-power is potentially available by 2026 (Central Tenica Bellualane, Mozambique) |
2000MW |
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Further opportunities for an additional 1000MW is available within a five-year development period (Mozambique) |
1000MW |
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Energy Sovereignty (February 2024 and beyond)
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ACTION |
MW |
LS Stage |
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NEW GENERATION CAPACITY |
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Further RFPs for 5000 MW of wind and solar PV, 1200 MW of battery storage and 3000 MW of gas are being developed. Ministerial determination in this regard will be released by August 2023. |
9200MW |
Energy surplus |
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Commence work on Transmission Grid strengthening and expansion (Eskom Transmission Expansion Plan) |
R210Bn |
(10-Yr Plan) |
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Distribution infrastructure reform, investment and improvements in quality of supply |
PROTECTING JOBS AND LIVELIHOODS
Besides the technical interventions, the Government continues to support the most vulnerable against the impact and support businesses and industry, protecting jobs and our economic prospects. We are also conscious of our obligation to use the interventions proposed to drive localisation and job creation.
The Land Bank has established an R2.5 billion fund for farmers to invest in alternative energy solutions to support energy security. This will provide a mix of grant and loan funding, with the grant component ranging from 30-70 percent.
National Treasury is finalising adjustments to the Loan Guarantee Scheme to establish an Energy Bounce Back Scheme.
The Ministry of Electricity is working with the Government Employees Pension Fund to develop a facility to support low-income workers in the Public Sector to afford the upfront capital costs of solar solutions and other load management systems.
The key emerging constraint is that most electrical skills are trained on Alternative Current (AC) with limited Direct Current (DC) technicians available; the latter is needed to install panels and batteries.
The Ministry is working with the Unemployment Insurance Fund (UIF) and Sector Education and Training Authorities to develop a competency framework and related training programme to support the anticipated large-scale training.
To support the upscaling of rooftop solar and to match the anticipated demand over five years, South Africa would need to train over 20 000 electricians/installers at an estimated cost of R1.2 billion.
INVESTIGATING, APPREHENDING AND PROSECUTING OF FRAUD AND CORRUPTION AT ESKOM
Madam Speaker, with good reason, there has been keen interest in how fraud and corruption are being addressed.
Members will no doubt be aware, An Energy Safety and Security Priority Committee was established to address ESKOM-related crime on an inter- departmental, multi-disciplinary basis to address the objectives of Work Stream Six of the National Energy Crisis Committee (NECOM).
A total of 1952 Eskom-related cases were reported to the SA Police Service between 1 April 2022 and 29 May 2023, with 1405 cases still under investigation, and 126 arrests have been made.
A further 302 Eskom related cases were reported to the SA Police Service between 1 April 2023 and 29 May 2023 with 285 of the cases still under investigation and 31 arrests effected.
A total of 214 arrests emanating from combatting operations were made through the collaborative efforts of law enforcement, together with key inter- departmental role players. The total value of items seized was R 89 933 212.
Whilst much remains, these interventions are beginning to turn the situation around, and there are indications that operational measures implemented have clearly disrupted the activities of criminal syndicates.
Madam Speaker, as I conclude, in the midst of the current energy challenges we face, it is easy to become numb to the massive gains that the Democratic government has made in ensuring universal access to energy is achieved, consistent with our commitment to the Sustainable Development Goals (SDGs).
Currently, at least 200 000 households are electrified, 20 000 to non-grid, medium voltage lines and new bulk substations per annum were constructed to extend the services to deep rural areas, including the 27 Priority Districts.
The percentage of South African households connected to the mains electricity supply increased from 76,7% in 2002 to 89,3% in 2021. (General Household Survey, 2021)
Households with access to mains electricity were most common in Limpopo (96,9%), Western Cape (95,1%), and Northern Cape (92,5%), and least common in Gauteng (82,7%) and North West (83,4%).
Madam Speaker, Mr President, it is often said that we don't even know how strong we are until we are forced to bring that hidden strength forward, our strength as a people is not tested during the best of times. In these times of necessity, people do amazing things and expose the human capacity for survival and renewal. Our nation, in so many ways, stands at a challenging crossroads, yet our People, despite the immense hardship, continue to demonstrate resilience that is the mark of Madiba's rainbow nation. We dare not take their patience and courage for granted.
We dare not fail our People - let us indeed make every megawatt count! I thank you.