Minister Patricia de Lille: New Development Bank 9th Annual General Meeting

Deputy President of the Republic of South Africa, Honourable Paul Mashatile
President of the New Development Bank, Ms Dilma Rousseff
Senior officials of BRICS nations
Esteemed guests,

1. Just over 19 months ago, our country grappled with severe economic challenges exacerbated by the profound impacts of load shedding.

2. In February 2023, Hon. President Cyril Ramaphosa intervened and appointed a Minister in the Presidency for Electricity to centralise and coordinate efforts to alleviate the intensity and frequency of load shedding.

3. Energy security is the cornerstone of any thriving economy. Without it, our aspirations for progress are compromised.

4. For too long, load shedding has robbed us of our potential and impeded our prosperous future.

5. Over the past 19 months, we have made significant strides to ease this burden.

6. Over 150 days without load shedding are a testament to the leadership, hard work, and collaborative efforts of more than 40,000 dedicated and skilled Eskom employees, guided by a highly competent Board and Senior Management team.

7. This team continues to work diligently to restore Eskom's integrity.

8. Through their committed efforts, we have increased our energy capacity, improved maintenance protocols and accelerated investments in renewable energy sources.

9. I am pleased to report that we are making significant strides towards regaining our energy security and sovereignty:

• Our daily Energy Availability Factor (EAF) is trending at 65%, up from 55% at the same time last year.
• We have achieved a new Available Capacity of 34,297 MW, a level not seen since August 2021.
• Our Unplanned Capability Loss Factor (UCLF) has dipped below 10,000 MW -a significant reduction from 18,500 MW in May 2023.
• We have seven power stations with an EAF exceeding 80% and two stations with an EAF above 60%.
• The National Nuclear Regulator has granted Koeberg Unit 1 a license extension until 21 July 2044, affirming our commitment to nuclear power as a key component of South Africa's energy transition.
• We substantially reduced Open Cycle Gas Turbine (OCGT) costs to approximately R3.33 billion-around 70% lower than the R10.98 billion spent last year.
• In the realm of renewables, our total installed capacity now stands at 6,430 MW.

10. The 2024 general election and the formation of the Government of National Unity are profound testaments to the resilience and spirit of our diverse nation.

11. They serve as a clarion call for us to rise above divisions, embrace our diversity, and unite to rebuild our cherished country.

12. We are, therefore, moving swiftly to enhance our generation capacity further and design an optimal energy mix.

13. This mix will include cleaner coal technologies, gas, solar, wind, hydro, pump storage schemes and nuclear energy-both conventional and small modular reactors.

14. This work will be informed by the diverse and rich feedback received in response to the 2023 Integrated Resource Plan (IRP).

15. Our IRP will be underpinned by an evidence-based decision-making approach, considering our growth objectives and long-term energy demand planning implications.

16. Subsequent IRPs will be aptly informed by the country's Integrated Energy Plan, the development of which the Ministry of Electricity and Energy is currently spearheading.

17. Since receiving an expanded mandate as the Ministry of Electricity and Energy, we have convened stakeholders across the energy value chain to refine our plans towards achieving energy sovereignty.

18. We will also facilitate specific discussions on the entry barriers that have limited the growth of our renewable energy installations.

19. The establishment of South Africa's Independent Power Producer Office, the IPPO, represents a successful example of a programmatic approach in the electricity sector.

20. The REIPPP has unlocked substantial funding from both domestic and international funders.

21. Our significant improvements in addressing the complex challenges in our energy sector are beginning to yield benefits.

22. Businesses, communities, and civil society have renewed confidence in our government's ability to rally its internal resources and social actors to lead economic recovery and rapid, inclusive, and transformative growth.

ADDRESSING LOOMING GAS SHORTAGES

23. We must also be vigilant of emerging threats as we tackle our energy challenges.

24. South Africa relies heavily on natural gas from Mozambique, particularly from deposits in the southern part of the country. However, these reserves are depleting rapidly, posing a significant risk to our energy security.

25. The gas industry, which includes industrial gas users, contributes over R690 billion in economic activity annually and creates direct employment for over 118,000 people. Following challenging but constructive meetings with the industry in July, we are acting decisively to avert a potential crisis.

26. As the esteemed development economist Joseph Stiglitz reminds us, "Development is about transforming the lives of people, not just transforming economies."

27. True energy security is not only about power availability but also about empowering our citizens and residents, creating an environment where businesses can thrive, families can live with dignity, and every South African can reach their full potential.

MODERNISING AND EXPANDING TRANSMISSION INFRASTRUCTURE

28. Grid capacity has fallen short of what is required for further generation capacity, as detailed in the Integrated Resource Plan 2019.

29. Based on Eskom's Transmission Development Plan (TDP), 53GW is expected to require a connection to the grid by 2032, which in turn requires 14,000 km of new transmission lines.

30. There is a disjuncture between the location of conditions for the best wind and solar and electricity demand, necessitating an urgent need for the accelerated expansion of the national grid.

31. Eskom's current financial position significantly limits its ability to attract sufficient capital to expand transmission infrastructure, with the delivery rate taking, on average, between 7 and 10 years.

32. This delivery rate needs to scale by 8 times to connect the energy generation required for energy security by 2030.

33. Transmission infrastructure is essential to advancing South Africa's green economy potential, job creation, and industrial-orientated growth.

34. However, this is a mammoth task given various supply chain and industry constraints, such as the extended lead times involved in the supply of complex transmission equipment within the context of increased global demand.
35. In addition, within South Africa, there is a material-technical skills shortage of people with the requisite skills needed to roll out transmission infrastructure at scale and as quickly as possible.

36. In December 2023, the Cabinet endorsed the adoption of Independent Transmission Projects as the requisite catalyst for transmission infrastructure development.

STRENGTHENING BRICS PARTNERSHIPS

37. South Africa recognises the immense potential of deepening our partnerships within BRICS countries, particularly in the energy sector.

38. As the world faces increasing demands for sustainable and affordable energy, collaboration among BRICS nations is more crucial than ever.

39. We are eager to learn from the vast experiences and innovations within BRICS countries, drawing from your successes in diversifying energy sources, improving energy efficiency and expanding access to clean energy.

40. For BRICS nations collectively striving to balance economic growth with environmental sustainability, these carbon borders could severely hinder our industrial competitiveness and economic resilience.

41. It is essential that we, as BRICS, unite to challenge these measures on the global stage and advocate for equitable climate policies that recognise our rights to development and our unique circumstances.

42. Together, we can push for a more just and inclusive approach to global climate action that supports rather than stifles our development aspirations.

43. By working together, we can build a more resilient and sustainable energy future for all our nations, addressing shared challenges such as energy security and transitioning to low-carbon economies.

44. South Africa is keen to learn from and collaborate with BRICS partners in developing renewable energy technologies. Countries like Brazil, China, and India have set global benchmarks in solar and wind energy.

45. We will explore advancements in nuclear energy, leveraging the expertise of BRICS countries with cutting-edge technology.

46. South Africa sees great value in learning from Brazil and India's successful Independent Transmission Projects, which have enhanced grid reliability and expanded access to remote areas.

47. By integrating these lessons into our projects, South Africa can reach of our energy infrastructure by introducing speed, scale, and agility into the development of transmission infrastructure.

48. South Africa is committed to enhancing cooperation within BRICS on energy policy and regulation.

49. Through intensified partnerships, we believe that BRICS can be pivotal in shaping the global energy landscape, driving innovation and promoting sustainable development across our regions.

50. We look forward to learning from the lessons learned and best practices regarding energy market reform that BRICS countries will share today.

I thank you.

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