Work underway to reduce severity and frequency of loadshedding

President Cyril Ramaphosa says all hands are on deck to ensure that the severity and frequency of loadshedding is reduced in the immediate term and brought to an eventual end. 

The President told Members of Parliment on 11 May 2023 that the Minister of Electricity is responsible for driving the various actions being coordinated by the National Energy Crisis Committee to end load shedding as a matter of urgency.

“The Minister is overseeing the full and speedy implementation of the Energy Action Plan to ensure that the severity and frequency of load shedding is reduced in the immediate term, and brought to an end within the shortest possible time, the President said.

Following his appointment, the President highlighted that Minister Kgosientsho Ramokgopa conducted a diagnostic assessment of Eskom’s installed generation capacity, resulting in the identification of a set of critical interventions to maximise the energy availability factor of the generation fleet.

The Ministry of Electricity engaged a wide spectrum of stakeholders, including industry, labour, original equipment manufacturers and the diplomatic community, who have all pledged their support for strategic interventions to reduce the intensity and frequency of loadshedding.

The preoccupation of the Ministry is to improve the performance of the existing Eskom base load fleet, maximise the performance and output of peeking stations and reduce demand through an aggressive demand side management programme.

“This work is being undertaken alongside measures to substantially and urgently increase the construction of new generation capacity. The reforms that we have already implemented have resulted in a significant increase in investment in new generation projects, with many more in the pipeline,” the President said.

Tackling corruption 

Responding to a question on what government is doing to tackle the alleged corruption at Eskom, President Ramaphosa said that no evidence has been presented to him in this regard.

“I have not been presented with any evidence of members of the Cabinet or other senior government officials alleged to be involved in corruption at Eskom.

“Anyone who does have such evidence should provide that information to the relevant authorities so that a thorough investigation of all credible allegations may be conducted,” he said.

The President told Members of Parliament that there are relevant institutions, whose job it is to investigate these matters, as they have the legal mandate, personnel and capacity to do so.

He said that significant progress has been made by law enforcement agencies, Eskom and the relevant government departments in addressing crime and corruption at the entity.

Just Energy Transition 

President Ramaphosa said a number of interventions are underway to ensure that the just transition is actualised.

He said that the pledges made by the International Partners Group – comprising the United States, United Kingdom, France, Germany and the European Union – to support South Africa’s Just Energy Transition, with around $8.5 billion in financing, is on track.

In 2022, South Africa formulated the Just Energy Transition Investment Plan, which sets out the scale of investment needed to meet the country’s international carbon emissions reduction commitments.

“The pledges made by the International Partners Group towards this investment are contained in this investment plan. These pledges consist of a combination of concessional and commercial loans, grants and guarantees. Work is underway to deploy these funds.

“Financing under the Just Energy Transition Investment Plan will not be used for investment in coal-fired power generation. International climate financing is for investments that transition economies away from the use of fossil fuels,”  he said.

President Ramaphosa explained that the bulk of the financing is for the energy sector, including decommissioning, repurposing and repowering of identified coal power stations in line with South Africa’s decommissioning schedule.

This also includes support for new generation capacity, investments in the transmission grid and strengthening the distribution network.

“Importantly, funds have been allocated to just transition interventions that will support vulnerable workers, reskill, train and provide new diversified economic opportunities and jobs for workers and communities affected by the transition,” he said. 


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Loadshedding Strangling SA construction sector growth

Persistently high loadshedding is extracting a heavy price from the construction industry, severely constraining its economic growth and job creation potential, warns industry expert Roelof van den Berg, the CEO of Gap Infrastructure Corporation.

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Empower IPPs to fast-track a stable power supply for essential services

Extended blackouts and relentless loadshedding is crippling essential infrastructure and service delivery in South Africa. In a recent announcement, one of South Africa’s largest telco providers stated they were making the shift from the national power grid and would begin sourcing electricity from Independent Power Producers (IPPs). This signals the start of a new era in commercial autonomy as essential service providers seek to bypass the effects of loadshedding.

By Barend Matthee, National Projects Director at Workforce Staffing

By engaging IPPs, businesses with the funding will either establish their own power plants or purchase power directly from them, as South African IPPs are ready to roll out their alternative power generation projects. To date, several have been signed off and are already at various stages of implementation. With a national state of disaster hanging in the balance, timing is critical and the urgency of getting these projects up and running as soon as possible cannot be understated. Here, a Temporary Employment Services (TES) provider can leapfrog unnecessary delays and get IPPs on track toward creating the stable power supply our country so desperately needs.

Impending state of disaster

The South African government is currently considering whether the ongoing energy crisis meets the legal requirements to declare a national state of disaster, as record levels of power cuts continue to hamstring the economy. Fuel stations in remote areas, medical facilities, water supply services, food production and telecommunications have suffered immensely in recent months due to incessant scheduled power cuts. With no decisive action taken to date by the government to rectify the ailing power grid, service providers are having to take matters into their own hands now that regulations within the IPP industry have been eased. Following the example of Central and South America where telco companies use renewable energy to power signal towers in remote areas, such solutions will need to be applied in South Africa, not only to power telecommunications but for critical services as well.

Providing skills and speed

Given the scale and urgency of demand, however, it is unlikely that IPPs have reached a point of maturity where they can step up and meet this deficit, particularly from a labour perspective. Many skills and many hands are required to build the power generation capacity required, and this is where a TES provider would be an ideal partner. With a national footprint and an extensive database of verified skills and labour, a TES provider will help IPPs find and deploy the workforce necessary for the construction, operation, maintenance and repair of renewable power plants. Not only does a TES provider source and place the workforce, but theirs is also an end-to-end employment solution that encompasses the entire administrative burden of managing a large workforce as well as the various compliance considerations required by law. By partnering with a TES provider, IPPs will be able to hit the ground running much faster, overcoming all the usual hurdles involved in projects at scale, and will be able to take on much larger projects which would otherwise have been impossible without the necessary resources.

Saving time through support

In this respect, a TES provider can save a substantial amount of time on IPP projects. During the consultative phase, the TES provider offers invaluable experience from previous similar undertakings for the IPP to leverage, ensuring that all obstacles and delays are swiftly overcome. At the point of execution, the TES partner can provide critical support in the form of budget planning, HR and IR management, as well as safety and strategic advisory. Of central importance is the direct supply of labour, including contingency staffing and recruitment. The TES provider delivers agile support, including contractor-side recruitment, and the fulfilment of local content requirements. Additionally, the TES partner is capable of handling the indirect supply where the IPPs are required to onboard many suppliers within the project ecosystem.

Reducing the administrative burden

With the right TES partner in place, IPPs have access to the proper systems and technology for transparency, traceability and auditable information to support the compliance framework and reporting structures required by the Department of Mineral Resources and Energy, massively reducing the administrative burden on the IPP. Here, the TES provider plays an inclusive facilitatory role with the experience and infrastructure necessary to support that procurement function – everything from staff medicals, to transport, training, Personal Protective Equipment (PPE) and staff wellness initiatives. By utilising a TES provider, it becomes possible to achieve labour harmony, as the TES provider also facilitates community and stakeholder engagement, completely handling all elements of human resource management and ensuring the surrounding community benefits properly from job creation, skills development and enterprise and supplier development.

Accelerating the entire project lifecycle

When considered from this perspective, it becomes clear that a TES provider is effectively competent, enabling turnkey operation, playing a pivotal acceleratory role in the journey to get to that empowerment of the IPPs that results in achieving a stable power supply for essential services, much quicker. Furthermore, the faster a project is completed, the faster the TES provider can assist the IPP to get to the next phase, which is longevity development. This is where true economic recovery and progress happen, as the TES provider supports IPPs and local communities as an empowering catalyst that drives economic initiatives to full effectiveness.

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Detrimental effects of rolling blackouts on SA’s plastics industry

With the seemingly endless challenges that South Africa and its people face, the driving force behind these challenges seems to be the notorious rolling blackouts that have plagued our country for more than a decade. From manufacturing and production, to retail and education, not a single industry is being left unscathed and unaffected.

Plastics SA Executive Director Anton Hanekom says, the local plastics industry is no exception when it comes to experiencing the negative impact of relentless interruptions in power supply. “Our industry is especially exposed when it comes to loadshedding due to the fact that the processing and production of plastics and plastic products are done primarily through thermal processing. This means that high temperatures must be maintained throughout the manufacturing process. However, without power, these high temperatures cannot be effectively reached and maintained, nor is there enough time between scheduled power outages for the machines used to reach the required temperature for the processes to be restarted,” Hanekom explains.

Furthermore, when producing and manufacturing large quantities of polymer materials, the extrusion process is required, in which the materials are enriched with additives and melted in order for production to be completed successfully. This entire process comes to a halt when manufacturers experience power outages. While restarting the production process may appear simple, there are serious consequences when machines shut down unexpectedly for extended periods of time.

“During the extrusion or melting process, once the machine shuts down for a three- to four-hour loadshedding stint, the materials that were being processed solidify in the machine. This means that the time required to remove the solidified materials, clear the machine, and prepare to restart the process from scratch is added to the overall production time. A significant amount of time and material is wasted, which has a knock-on effect on operating costs, staffing, and production. Revenues are being eroded and thousands of jobs are being threatened in an industry that is a priority sector and contributes approximately 17 percent of the country’s manufacturing GDP,” Hanekom explains.

Ripple effects felt by other industries

Plastics are ubiquitous in our lives and can be found in almost every aspect. As a result, plastic manufacturing and use serve as the foundation for other products. When the plastics industry faces such severe challenges, it quickly snowballs and affects other closely related and critical industries, such as the packaging sector, which accounts for half of total plastic polymer consumption in South Africa, followed by the building and construction sector.

“Our country has a number of major packaging producers. However, the challenges extend beyond the financial bottom line of these producers, as effective packaging is important to avoid food waste, extend the shelf life and prevent spoilage or breakage of certain products. We need to start talking about “packaging security” in the same breath as food security. When plastics packaging production suffers, it leads to increased transportation costs, food waste and inflation,” Hanekom explains.

Impact of loadshedding on the recycling of plastics

During the previous reporting period, the country’s plastics manufacturing and recycling industries showed a welcome recovery from the devastating effects of the Covid-19 pandemic, indicating a 4.7% growth rate in 2021. Unfortunately, loadshedding threatens to undo these gains and efforts to recoup the industry.

“The recycling process is in essence also an extrusion process based on thermo-processing principles.  Profit margins in this industry are already extremely marginal. Add to that rising transportation costs and the need to invest in alternative energy sources such as generators or solar power to stay operational, and our recyclers are being brought to their knees when left in the dark for up to six hours at a time,” Hanekom emphasizes. Smaller entrepreneurial companies doing collection and baling do not have the funds for alternative energy sources and this causes further bottlenecks in the supply of recyclables.

Whilst relying on generators for private use can be effective to keep homes operational and the lights on until loadshedding ends, it does not pose an effective long-term solution for large companies that mass produce plastic products. Owing to the high cost of diesel, manufacturers find themselves paying double the tax when they use generators. In 2000 Government started implementing a diesel refund system to provide full or partial relief from the general fuel levy and the Road Accident Fund (RAF) levy to primary sectors such as agriculture. The refund system is in place for the farming, forestry, fishing and mining sectors. However, during the last budget speech, in light of the electricity crisis, a similar refund on the RAF levy for diesel used in the manufacturing process, such as for generators, has been extended to the manufacturers of foodstuffs. We believe this refund must be extended, to all manufacturing sectors using generators, to bring much needed relief from the general fuel levy and RAF levy.

The importance of becoming self-reliant

With the country’s power utility predicting at least two more years of loadshedding on the horizon, the plastics industry cannot afford to wait on the government to solve its problems. Hanekom says that, as the representative body of the plastics industry, Plastics SA strongly advises plastic producers to find practical and innovative ways of getting around the power supply issues they face. Load curtailment is another alternative solution, for those companies which gets their electricity directly from Eskom and where arrangements exist whereby Eskom can ask energy users to curtail or reduce their power usage up to a certain percentage of the load.

If no other economically viable solutions can be found, at least bargain for longer periods.  The industry would welcome loadshedding cycles of 12 hours or more.  In other words, switch the supply off for 12 hours but then allow the manufacturers and recyclers to run continuously for 7 days.  The stop-start cycles are not the solution for thermo-processing technologies.

“As part of government’s Industrial Policy Re-imagined, a Plastics Industry Master Plan is being developed to put the industry on a growth trajectory. This plan is already three years in the making and sees an active collaboration between industry, labour and government to develop a vision for the industry, identify blockages and constraints, and develop a set of key actions that need to be taken forward over the short and medium term. We are tapping into these resources and partnerships to try and find affordable and workable energy solutions to ensure our industry remains competitive. Whether these solutions involve going off the grid, feeding power back into the grid, or using renewable energy, a viable solution needs to be found and implemented as a matter of urgency if we hope to see any form of success in the future,” Hanekom concludes.

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Locally manufactured energy saving product

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Solar expert weighs in on president’s plan to reduce loadshedding

Home solar is still South Africa’s most reasonable short-term solution to the growing energy crisis, notes solar expert Rein Snoeck Henkemans, Managing Director of Alumo Energy.

Of the five key interventions outlined by President Cyril Ramaphosa during his 2023 State of the Nation Address (SoNA), home and business solar generation is the only immediately available, feasible, and inexpensive option relative to the other more ambitious, time-intensive, and expensive options, he says.

“The inescapable fact of the matter is that we need a working solution today, not a couple of years from now. We have experienced close to a thousand hours of loadshedding this year alone. If this trend continues, it is impossible to know or even guess how much it will cost the average person or business owner in the long term,” he says.

“Ultimately, our economy needs more grid-supplied energy, but repairing Eskom’s coal stations, accelerating investment into generation, procuring more renewable gas and battery storage capacity, and the vague ‘transforming the electricity sector’ options mentioned during SoNA will take too long and cost the taxpayer far too much.”

He adds that the government and Eskom’s actions are commendable, but warns that the proposed temporary solutions to fast-track construction on three generation units at Kusile, recruit skilled personnel to underperforming stations, and secure 300 megawatts from neighbouring countries is akin to putting a bandage on a deep wound.

There is some encouraging news for the future of solar

“The address gave us at least one flickering ray of hope. The President promises to implement a tax incentive for solar, which may prove to be a sizable step in the right direction. Currently, we have no information on the conditions or extent of the incentive, but if this proves to be substantial enough, we could enter a golden age for solar which will significantly benefit business and households,” says Snoeck Henkemans.

He explains that solar is already a far more affordable option than many people realise. With a rent-to-own package, households may pay an amount quite similar to their current electricity bill for a fairly high-capacity solar system.

Although this option would not take a household completely off the grid, it does allow for continued electricity access during loadshedding, and considerably lower electricity bills. Given that Alumo Energy recommends using solar for up to 80% of a household’s electricity needs rather than attempting to go completely off-grid, this represents a highly attractive solar solution.

“Additionally, with this purported tax incentive, solar could become South Africa’s energy generation solution of choice in the coming years, especially if government takes additional steps to promote its use.”

The bounce-back loan scheme implemented during Covid-19 to help businesses get back on their feet may be the additional support that the solar industry needs.

President Ramaphosa stated that the National Treasury is working to adjust the loan scheme to help small businesses invest in solar equipment. Additionally, banks and development finance institutions will be able to borrow directly from the scheme to facilitate the lease of solar systems.

“This is South Africa’s eleventh hour. We don’t have the luxury to sit on our hands and hope that the problem resolves itself. Unfortunately, this is not just Eskom and the government’s problem, but ours as well. As such, we have to take up the task of finding a solution. For households and business owners, that means turning to solar and reducing dependency on the grid.”

He points out that this will further mean partially sidestepping the upcoming 18.65% electricity tariff increase in April, as well as the proposed 12.74% increase for next year.

“It remains to be seen how many of these commitments will be realised this year, and to what degree they will resolve the country’s energy crisis. Until then, I recommend looking at all the available options, considering the best course of action, and getting solar installed by a reputable provider sooner rather than later.”

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Minister of Electricity to focus solely on resolving loadshedding

President Cyril Ramaphosa says the proposed Minister of Electricity will assume “full responsibility for overseeing all aspects of the electricity crisis response” and will drive the action of the National Energy Crisis Committee to end loadshedding “as a matter of urgency”.

The President was replying to the debate on the State of the Nation Address (SONA) in Cape Town, on Thursday. Delivering the SONA last week, the President announced a new Minister of Electricity to be based in the Presidency.

“The reality is that the resolution of the energy crisis requires effective coordination across several departments and public entities. It requires the undivided attention of a political principal who does not need to split their time and energies among different important responsibilities.

“This appointment will ensure that there is a Minister who is ultimately responsible for resolving loadshedding and who is able to work with all fellow Cabinet ministers, departments and entities to do so,” he said.

President Ramaphosa moved to dispel notions that the new minister will cause fragmentation in the light that the Minister of Public Enterprises takes charge of state power utility Eskom and that there is a Minister of Mineral Resources and Energy.

He thrashed out the key responsibilities for each of the three ministers.

“The Minister of Mineral Resources and Energy deals with matters of energy policy as well as mineral resources. Beyond the energy crisis that we face, the restructuring of government will be effected to enable entities that fall under various departments to be properly located in those departments.

“The Minister of Public Enterprises is executing the recommendations of Presidential Review Commission as well as the State Owned Enterprises Council in relation to the ownership and the governance of state owned enterprises. That function should be completed in time as we continue with the restructuring of government. The Minister … will therefore continue to work on the restructuring of Eskom as well as other state owned enterprises until then.

“The Minister of Electricity will be focused day in and day out only on addressing the load shedding crisis, working together with the management of Eskom and the board. The Minister will be leading the National Energy Crisis Committee and interacting with all other departments in the spirit of cooperative governance,” he said.

National State of Disaster

Turning focus to the National State of Disaster declared by government in relation to the energy crisis, President Ramaphosa reiterated that the move will allow government to accelerate the implementation of the Energy Action Plan announced last July and move with urgency to mitigate the social and economic effects of load shedding.

“As I said in the State of the Nation Address, we will ensure that environmental protections and technical standards are maintained, and that procurement is undertaken with transparency and proper oversight.

“We will use the state of disaster to get rid of unnecessary bureaucratic obstacles that stand in the way of urgently bringing new generation capacity onto the grid. We will use it to ensure continuity in the provision of critical services and supply chains, and to address the impact of loadshedding on businesses and households,” he said.

Coal as an energy source

President Cyril Ramaphosa told MPs that the country will continue to use coal as a fuel source in the foreseeable future. More than half of South Africa’s energy is derived from Eskom’s coal-fired power stations – rendering the country heavily reliant on the sedimentary rock as an energy source.

“As we build an electricity system that will meet our energy requirements into the future, we need to dispel some of the myths that have been circulating – and that have been repeated here – about the path we are taking.

“We need to dispel this idea that we are abandoning coal as a fuel source. We should all remember that coal fired power stations provide 80% of our energy source and will therefore continue to provide the bulk of our ‘base load’ supply into the future,” he said.

The President added, however, that South Africa is also committed to a “future energy mix” including renewable, nuclear, gas, hydro, storage and biomass energies.

President Ramaphosa also assured MPs that unbundling Eskom and creating a competitive energy production market is a move that will wholly benefit the country’s future energy security. Eskom is undergoing a process which will see it divided into the Generation, Transmission and Distribution entities.

“We must dispel the idea that unbundling of Eskom into three separate state-owned entities is out of step with international trends. The reality is that over 100 countries including China, Germany and Russia have established independent transmission and system operation companies.

“We need to dispel the claim that creating a more competitive, efficient and sustainable electricity generation market threatens the ability of the state to provide affordable electricity to its citizens.

“On the contrary, the reforms we are undertaking will improve the ability of the state to provide power to the people now and into the future,” he said.

The President assured South Africans that a combination of all of the steps government is taking and the work done at the state power utility will bear fruit in addressing the energy crisis.

“With the focus that the Minister of Electricity will have on loadshedding and the work that is being done by Eskom and the board I do believe that we stand a much better chance to address this overriding challenge and crisis that our country faces,” President Ramaphosa said.

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Solutions boost for power-strapped property owners in SA

With loadshedding on the horizon for the foreseeable future and increasing concerns about water supply in many metros, property owners – particularly in the non-residential space – are under pressure to find solutions.

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