Explosive revelations about South Africa’s power utility: why new electricity minister should heed the words of former Eskom CEO

A month ago South Africans heard some hard truths about the state of the power utility, Eskom, from the outgoing CEO André de Ruyter. In an interview broadcast on television, De Ruyter made accusations about the role of criminal gangs as well as politicians in corruption that’s crippled the utility. The interview triggered his immediate departure.

By David Richard Walwyn Professor of Technology Management, University of Pretoria

But, in my view, South Africans – particularly the new Minister of Electricity Kgosientsho Ramokgopa – would be well advised to look more carefully at what De Ruyter said, rather than trying to discredit the messenger. De Ruyter outlined four levels at which Eskom is being destroyed.

Firstly, there is the issue of a lack of political support from Cabinet for a renewal strategy for Eskom which De Ruyter attempted to implement. The plan included dealing with crime, separating the existing entity into three different companies (generation, transmission and distribution) and over time, decarbonising energy generation. Effectively this meant, over time, closing coal-fired power stations and replacing them with renewable energy storage capability.

Secondly, De Ruyter outlined how Eskom continues to be infiltrated by systematic corruption involving private individuals and companies using public assets for personal gain. The pattern of state capture began in earnest under the presidency of Jacob Zuma but these players have continued to hold onto powerful interests within the company, including contracts for coal, construction and maintenance. They are principally rent-seekers, and extract money for no added value.

Thirdly, there is organised crime. These groups are distinct from the agents of state capture. They control how money flows as well as the operations of several power stations. For instance, Eskom has lost control of Tutuka, one of the bigger coal-fired power stations that should be generating at least three GW (12% of the total demand). Yet energy availability from the plant is now an eye-watering 12% of its capacity.

Finally, De Ruyter identified intentional malfunction and petty crime as a major threat. Anyone who can break the law does so without consequence.

Much of the resource and power that are necessary to solve problems at all four levels are in the Minister of Electricity’s or government’s control. He needs to get Cabinet behind a renewal strategy that aligns with the global energy transition, he needs to get the police to do their job with competence, and he needs a powerful CEO who has local legitimacy and support.

And he needs to act immediately.

The depth of the crisis

South Africa’s electricity supply crisis has never been more severe. This is clear from the data that Eskom publishes on its data portal.

Power cuts – known locally as loadshedding – have now risen to 15% of total demand. This means that, on average, embattled customers are without power for at least 5.5 hours for each 24 hour cycle (see figure below).

David Richard Walwyn

As the figure shows, loadshedding rises every month, with February being the worst on record ever.

(The data in the graph is based on actual dispatched generation versus the anticipated demand, where the latter is obtained by Eskom from historical patterns of use.)

Just when South Africans had hoped that the situation could improve, it deteriorated. In May last year, loadshedding was a 2% of the total demand. At the time they still had confidence in President Cyril Ramaphosa’s ability to solve the crisis with his six-point action plan.

Since then the country has endured a string of broken promises, heard explosive revelations from the De Ruyter interview and witnessed the further collapse of the coal fleet.

The longer the crisis lasts, the more Eskom’s energy market will shrink. Using the data from the last few years, it is possible to model what is happening to energy demand and what could happen in the future.

About nine GW of Eskom’s customer base are untouchable – these customers are unaffected by Eskom and unlikely to source alternative supply. We also know that about nine GW of demand mainly allocated to the Energy Intensive Users Group, will be replaced by in-house generation over the next two to three years.

Combined with the growing use of rooftop solar in residential and commercial buildings, my prediction, based on my modelling studies, is that by March 2026, the shifted demand will be 11 GW, leaving a residual demand on the national grid at 14 GW, or about 40% of the average demand in 2020.

David Richard Walwyn

If Eskom cannot sell the electricity that it generates, operating costs will quickly outstrip revenue. The challenge is therefore not only to rebuild generation, but also to keep high value customers, who are switching to solar.

What will help

All eyes are on the new Minister of Electricity. Does he have the skills, energy and political influence to resolve the energy crisis? Or will his appointment further obfuscate an already incoherent portfolio?

Minister Ramokgopa needs to add three important tasks to his programme of action. He needs to learn from the De Ruyter interview (and address the problems he identified), he needs to rapidly unbundle Eskom and he needs to solve problems that are delaying the implementation of the renewable energy programme.

In his budget speech, Minister Enoch Godongwana made it clear that the establishment of the National Transmission Company of South Africa is a priority. Although National Treasury will borrow R254 billion to refloat Eskom, the funds can only be used to secure and extend the assets of the transmission company. The implications of this position are clear – sell off the generation capacity to private investors and leave distribution to local authorities, where this is possible.

One aspect of the De Ruyter interview which has been largely ignored is the issue of the renewable energy programme and how this has been derailed despite its obvious benefits in terms of lower energy cost and minimal water usage. As De Ruyter mentioned, if the programme had remained on track, South Africa would have avoided 98% of the 2022 loadshedding.

In addition, the closure of several Eskom coal-fired water-cooled power stations will release billions of litres of water for use in domestic applications, savings which will become essential for a water-scarce country. Closure of these stations will also deal with the air quality concerns and the ongoing breaches by Eskom of its emissions permits.

It is apparent, now, that nothing will save Eskom in its present configuration. It will join a list of state-owned entities that are a fraction of their former scale – the Post Office, South African Airways, the Passenger Rail Association of South Africa.

How far it sinks will depend on how effective Minister Ramokgopa can be in his new position.

Article courtesy The Conversation.

GreenEconomy.Media believes that Minister Ramokgopa may light the end of the tunnel. Uncover how the minister proposed a way out of South Africa’s infrastructure emergency.

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Dear Minister Ramokgopa, here is a list of corruption cases impacting on Eskom

New minister of electricity, Kgosientsho Ramokgopa, said this week that Eskom’s challenges were technical problems which had nothing to do with ‘so-called corruption’. Well that is simply not so, with reports of corruption frequently uncovered by the media, and some cases with law enforcement agencies and the courts. The South African Police Service is currently investigating 131 Eskom-related cases, while the Hawks have 83 cases across six provinces, with 18 in court.

By Vincent Cruywagen

The Eskom cases before courts include:

  1. Ex-Eskom executive France Hlakudi is one of several people accused of fraud, corruption and money laundering in connection with an allegedly fraudulent R745-million contract involving the Kusile Power Station.
  2. In March 2022, the Asset Forfeiture Unit obtained a freezing order valued at R2.4-billion related to the Optimum Coal Mine and its assets, bought with the proceeds of crime by the Gupta-owned Tegeta company.
  3. In October 2022, former Eskom acting CEO Matshela Koko, his wife and two stepdaughters were among eight people arrested on corruption charges relating to a multimillion-rand irregular contract for building the Kusile Power Station. The charges stem from a 2015 contract awarded to the Swiss conglomerate Asea Brown Boveri (ABB) to install control and instrumentation systems at the power station.
  4. In November 2022, two security guards were arrested in connection with the theft of diesel worth R145,930 from an Eskom plant. The guards were employed by a security company contracted by Eskom and had been guarding the Port Rex gas turbine station in East London.
  5. Also in November  2022, Eskom reported multiple arrests linked to sabotage, coal theft and coal fraud at Camden Power Station.
  6. Around 30 November 2022, a truck driver and his supervisor from a transport company subcontracted to haul coal to Eskom were arrested at the Matla Power Station. The arrests took place after the truck driver was found to be in possession of subgrade coal destined for the facility.
  7. Angelo Cysman, a 40-year-old plant operator at the Ankerlig Power Station in Atlantis, is accused of stealing diesel worth R500,000. He was released on R50,000 bail by the Atlantis Magistrates’ Court in December last year. It is alleged he allowed a vehicle to collect stolen diesel from the site, declared the diesel tanker was empty and all the fuel offloaded, and then allowed the vehicle to leave with the stolen load. 

Article courtesy Daily Maverick

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CT Mayor lays out plan in Premier’s Energy Digicon to end blackouts

Cape Town Mayor lays out plan in Premier’s Energy Digicon to make city first metro in country to “say goodbye to loadshedding”.

At his fourth Energy Digicon today, Premier Alan Winde welcomed the Executive Mayor of Cape Town Geordin Hill-Lewis to explain how the City of Cape Town (CoCT) is tackling the energy crisis. Mayor Hill-Lewis touched on several exciting initiatives the City has embarked on. “We are actively working towards ending loadshedding as aggressively as we can,” remarked the Mayor.

He outlined four ways the CoCT is tackling rolling blackouts:

  • Renewable power without battery storage – this would help ensure sufficient and cheaper power supply. 200 MWs are in the process of being purchased;
  • In the next week the CoCT will make public a tender for 500 MW of dispatchable power – this is power that is available immediately at the flick of a switch;
  • Small-scale embedded generation – to this end major policy shifts have been made at the City, namely allowing people to be net generators of energy at their homes or businesses. Excess power can be sold back to the municipality, businesses can currently do this and households will be able to do this by the end of the year. This incentive has seen a dramatic increase in solar installations in the city; and
  • The Power Heroes initiative – where residents are rewarded for reducing their power use.

Special Advisor to the Premier on Energy Mr Alwie Lester also gave an update on the implementation of the Western Cape Government’s (WCG) Energy Resilience Programme. He focused on the New Energy Generation Programme (NEGP) aspect of the plan, which looks at the following interventions:

  • A focus on public spaces, specifically schools – 100 schools will be identified provincewide to be fitted with solar power systems that are linked to battery and inverter systems to ensure learners are not disadvantaged during school hours;
  • Identifying 4 or 5 towns in the province to be taken off the grid, to make them as independent as possible from Eskom in the coming months. This will be done through mobile containerized PV battery units which can tap between 1 MW to 400 MWs into the power system and can be connected to municipal power generation networks; and
  • One other key Western Cape Government intervention is the Municipal Energy Resilience (MER) plan, which is well-advanced and currently targets five municipalities.

Premier Winde emphasised, “The measures the CoCT is implementing are very encouraging. Cape Town’s population is growing at a rapid rate and it is important that the Mayor and his team do everything they can to boost power production, protecting households and businesses from severe blackouts. This includes embracing innovation. I urge all our municipalities to put the needs of our citizens first amid this crisis and to continuously work on their energy plans.”

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How to talk to your family and friends about the new IPCC report – five tips from climate change communication research

The Intergovernmental Panel on Climate Change’s latest report is a sobering read, which some describe as a “final warning” from scientists. The core message remains the same as prior IPCC reports: human-driven climate change is happening, it’s bad, but we can act – though we now have even less time.

By Josh Ettinger Doctoral Candidate, School of Geography and the Environment, University of Oxford

On the positive side, there are growing indications that humanity will avert worst-case global warming scenarios – we already have the knowledge and tools needed, and progress is being made (but not quickly enough). It’s important that people who already know about climate change and treat it seriously take proactive steps to speak with others about IPCC reports and climate change more generally.

Young beautiful girl holding blank sheet paper over isolated background with open hand doing stop sign with serious and confident expression, defense gesture

As a researcher examining how to promote successful climate discussions among diverse groups of people, I have become convinced that one of the most effective ways of doing this is simply by talking to our family, friends, coworkers and communities about climate change. This not only helps mobilise climate action, it also creates spaces for us to process and reflect upon climate change, which can at times feel very overwhelming.

Despite the scale of the problem, we do not often speak about it. There are a variety of reasons for this, including a false perception that others do not care about climate change as much as we do, that it will spark contentious political debates, and a lack of confidence in our own knowledge about the topic. Raising such a depressing topic can generally feel awkward. Speaking up about climate change therefore takes courage.

So, rather than hoping that others will read about the new IPCC report in the news, here’s an alternative idea. Send someone you know a link to a news article about it, or even the report itself, then have a discussion about it. (You could also share this discussion at www.talkclimatechange.org – a website colleagues and I created to track climate conversations happening around the world.)

Ideally, try to engage someone who doesn’t normally talk about climate change. Here are a few conversation tips to consider if you decide to raise the topic:

1. Listen more than you speak

Remember, it’s a two-way conversation, not a lecture. Focus on asking questions – what do they think about climate change? How do the conclusions of the new IPCC report make them feel? What do they think we should do about it? Really try to listen to what they have to say rather than interjecting your own views, though of course you can and should share your perspective as well.

2. Affirm emotional responses

Climate change can spark diverse emotional responses in different people. Some might feel angry, fearful and worried, while others might feel hopeful and optimistic. If your conversation partner expresses emotional sentiments, it’s not your job to judge these feelings. Simply affirm that it is a complex topic and that it’s OK to feel the way they do.

At the same time, don’t be afraid to push back against claims that the world is absolutely doomed. You might say something like: “I understand where you’re coming from, but for what it’s worth, thousands of IPCC experts say there is still time to act to avoid the worst consequences of climate change.”

3. Tailor the conversation

Find ways to adjust your conversation based on what people are interested in. Researchers call this “tailoring”. You do not need to do this surreptitiously – simply express that you’d like to explore what climate change means to them. For example, if your friend loves skiing, talk about the potential impacts of climate change on mountain slopes. If they have grandchildren, talk about intergenerational impacts. The key is to find ways to help people connect the dots between what they already care about and acting on climate change.

4. Embrace uncertainties

IPCC reports are very carefully calibrated with levels of scientific certainty. Likewise, you do not need to know all the answers on climate change. In discussions, don’t be afraid to say you don’t know. Sometimes the best answer can be: “That’s a good question. I’m not really sure so we should look it up.”

5. Explore actions together

Before ending your discussion, try to pivot to action. The new IPCC report makes clear that feasible climate solutions already exist for every sector, and that individuals have an important role to play. Explore what steps you might be able to take together, whether through lifestyle choices such as diet or transportation, or through actions aimed at policymakers (such as voting, contacting elected officials or joining a protest).

If your conversation partner is ready to act, make plans. If they are hesitant, suggest that you can follow up at a later point. If they respond negatively to the idea of taking personal climate action, agree to disagree and try to end on a positive note. Even if no direct outcomes arise out of your discussion, remember that simply having a climate conversation is a significant accomplishment.

With scientists across the world warning us about the need for urgent climate action with greater alarm than ever, it is uncertain how long heightened attention to climate change in the wake of the new report will last. However, by speaking with our family, friends and communities about it, we can help maintain the attention this crucial issue deserves, and widen the pool of people engaged in climate action.

Article courtesy The Conversation

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Sustainable transformation in the energy sector

  • Scale-ups rather than start-ups: scaling market-ready technologies and companies for a sustainable transformation of the energy and technology sectors 
  • Profitable markets for renewable energy as the basis for a successful energy transition 
  • Institutionalising and scaling the potential of green investment

Sustainability in every sense of the word, ClimateTech and economic success: these terms describe the investment philosophy of econnext AG. The parent company of several ESG-oriented companies for the development of green technologies focuses on so-called scale-ups. They differentiate themselves from start-ups as their products and services have already reached full market maturity and they are ready for market expansion. A decisive factor in the selection of investments by econnext AG is the potential for synergies among of the scale-ups among each other. This holistic approach enables econnext group to think of innovations in a networked way and thus to decisively advance solutions for climate neutrality.

Given the need to reach climate neutrality by 2045 in Germany and by 2050 in the European Union there is no more time to lose in the energy transition. The significant fossil fuel price spikes and supply disruptions put further pressure on markets. With targeted investments in scale-ups, econnext AG is committed to practical solutions to these challenges. Sabrina Schulz, PhD, board member of econnext emphasises: “We now need a consistent shift away from all fossil fuels. This clears the way for existing renewable and green technologies to be successfully deployed. econnext AG has made it its mission to support young ClimateTech companies in establishing themselves on the market.”

econnext AG is currently invested in seven scale-ups. As an industrial management holding company, econnext focuses on two essential factors: innovative and scalable technologies as well as a positive effect on climate, environment and society in terms of the 17 Sustainable Development Goals (SDGs) of the United Nations. The portfolio ranges from companies in the B2B sector, such as Circular Carbon, which specialises in green heat and biochar, or the energy project developer GRIPS, to B2B4C companies such as Autarq, a provider of solar roof tiles. 

Since January 2023, econnext AG has been a founding member of Invest.Green, a membership-based network of companies, retail investors, their financial advisors and other key players in the emerging green economy. Dr. Matthew Kiernan, Co-founder and Executive Chairman of Invest.Green: “Our corporate goal is to make green investing accessible to all segments of the population and to channel capital into environmentally sound and financially attractive projects. Partnering with pioneering companies like econnext brings us an important step closer to these goals.”

In addition to a diversified portfolio with a clear, sustainable and market-ready focus, econnext AG relies not least on synergies between its subsidiaries: The subsidiary Ambibox, for example, already produces solar inverters that are used for Autarq’s PV systems, among others. Another subsidiary, LUMENION, can store renewable energy using a special power-to-heat technology and make it available as industrial process heat. The interplay of the various solutions demonstrates the objective of econnext AG: the successful establishment of innovative and scalable technologies with a positive and sustainable effect on climate, environment and society on the market.

“The transformation of the energy sector goes hand in hand with great investment opportunities in Germany and Europe,” says Sabrina Schulz, board member of econnext AG. “Climate neutrality relies on innovation and new business models – and young tech companies and their solutions are already waiting in the wings to make it happen.”

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Climate risk is our reality and we need actions today to shape the future of business and society

We operate in an interconnected system that requires a healthy society for it to achieve sustainability in profits and business. This is against a dire backdrop in which the world has now recognised that trillion-dollar losses could occur due to inaction on climate change.

By Jehaan Anthony

Economists have warned that the potential economic costs of damage from climate-related disasters and extreme weather could be staggering. In 2018 the US alone incurred a loss of around $160 billion due to such disasters, and these numbers are only expected to increase as hazards become more complex and unpredictable.

In Africa, the energy crisis coincides with the dual threat of climate change, which is driving the imperative for renewables, not only to plug energy gaps but also to deliver power to drive sustainable economic growth as the continent has seen a rapid escalation of extreme weather events such as tropical cyclones, severe droughts, wildfires and floods. Already, climate change in Africa has caused an estimated $38 billion damage in two decades. Adding to this is a heavy reliance on fossil fuel – South Africa, which relies on coal for 80% of its power, is also said to be warming twice as fast than the rest of the world.  

Rolling power outages are red flagged as a high-risk scenario that’s expected to continue until at least April 2023 and probably a lot longer. In June last year, President Cyril Ramaphosa raised the licensing threshold for self-generation power to 100 MW, with an option to sell into the grid, which will allow residential estates, shopping centres, mines, factories and other providers to not only generate their own electricity, but also to power nearby communities and help support economic recovery. This will help reduce dependency on Eskom and the government, and the first power-generation project in the private market has recently been approved by the National Energy Regulator of South Africa.

As the green bank, which has been on a sustainability journey for some years, Nedbank has fine-tuned our solutions for the market and offer specialised finance structures such as longer payback periods, structured repayments around the savings that the infrastructure provides, and offtake deals where the user does not own the equipment.

That said, going green encompasses far more than turning to renewable energy, and our first recommendation is to find ways to operate more efficiently before investing in costly systems.

There are always ways to use electricity more efficiently, reduce water use in operations, recycle water wherever possible and process waste in a more resourceful manner. Understand what your goal is. If you are planning to go off the grid, understand the size of the inverter (how much power you are going to need) and then build your system by buying components and adding more as and when required or as budget allows.

While it is inescapable that there is a need for urgent action to mitigate the risks associated with climate change, as failure to act now could result in huge financial losses and irreversible damage to the planet, businesses must take the lead in the fight against climate change by adopting sustainable practices and reducing their carbon footprint.

That is why funding solutions become an integral part of the solution. Nedbank Commercial Banking, for example, offers term debt funding for its commercial and agriculture clients. This provides for funding of capital expenditure to expand public access to safe and affordable drinking water, provide access to adequate sanitation facilities, improve water quality to be fit for human consumption, and increase water use efficiency through water recycling, treatment and reuses.

In short, this solves for rising water costs, mitigates against water interruptions due to drought, water scarcity or failing infrastructure, prevents unnecessary or preventable wastage and avoids business downtime.

Another is funding provided for construction, maintenance, manufacture and other components for clean energy to generate or transmit energy that would include wind, solar, hydro, biomass and geothermal power, or funding of energy efficiency initiatives that include energy efficient technologies in new and refurbished buildings, energy storage, district heating, smart grids and appliance products.

The benefits are that this would enable businesses to generate sufficient energy for own use, thereby mitigating the impact of rising energy costs, minimising the impact of power interruptions, and ensuring income generation capacity for the company and employees during power cuts. Both options could take the form of an extended repayment term of up to 10 years, considering the savings when calculating cash flow or affordability, competitive pricing and direct ownership versus third-party ownership.

Nedbank Commercial Banking also provides term debt funding for commercial and agriculture clients to invest in environmentally sound technologies and processes that promote the recycling of post-consumer products, the upgrading of infrastructure and retrofitting of industries to facilitate increased resource efficiency, substantially reduce waste generation through prevention, reduction, recycling and reuse and promote sustainable agricultural practices. This addresses the rising energy and raw material costs hindering businesses from sustained growth, enabling community upliftment through job creation and the prevention of missed revenue opportunities.

In this regard, structured solutions are tailored to each business, with competitive pricing and off-balance sheet financing.

South Africa is not alone in facing energy and water scarcity challenges – it affects the whole world. Businesses must prioritise awareness around energy challenges and water scarcity in their operations and supply chains to mitigate against climate risks, while ensuring that clients derive value that will ensure that they are on a sustainable path while reducing their carbon footprint.

Do not miss GREEN ECONOMY JOURNAL ISSUE 77 (APRIL/MAY): we talk climate finance.

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SAPVIA launches NERSA registration data portal

SAPVIA has begun to track the uptake of embedded generation for different technologies.

“As a start, we are tracking the NERSA registered projects. We’ve already observed exponential growth in the registration of generation facilities. We anticipate that amendments to Schedule 2 of the ERA will further catalyse deployment of RE technologies,” says Dr Rethabile Melamu, CEO of SAPVIA.

“We are proud to publish a link to the data portal for your interaction.”

Some highlights from the data portal are:

•             Solar PV dominates the embedded generation market, with a 78% share for all registered projects, with the highest concentration in the Northern Cape, Free State and the North West province.

•             1 MW licence threshold exemption has been catalytic: Registered projects from August 2021 stands at 547 projects and have a combined capacity of 2839 MW. 

•             Removal of licencing threshold unlocks 100 MW private projects: Since December 2022, 5 renewable energy plants that are larger than 100MW were registered. Three of those, all Solar PV technologies, amount to 552 MW were registered in February 2023. The largest of which is 283 MW plant. 

The data portal access link is https://www.sapvia.org.za/nersa-registered-plants-dashboard/ Please send any comments, queries or recommendations regarding the portal and data contained therein to

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Body corporates and your solar panels: don’t find yourself uninsured

Finance Minister, Enoch Godongwana’s announcement regarding the launch of the National Treasury’s rebate scheme for new rooftop solar installations on private homes from 1 March 2023, has further increased the demand for renewable energy solutions by homeowners and in particular that of solar panel installations.

“There is however currently confusion and uncertainty amongst some body corporates and homeowner’s associations (HOA’s) when it comes to insuring solar installations. Some are not aware or have not been advised that they are able to cover solar panels under their existing building insurance policies. There are various cover options available and unless specified, the cost implications are minimal,” explains Hermanus van der Linde, CEO – IntegriSure Brokers.

For body corporates and HOA’s some of the options in the market are to insure a typical rooftop solar system or fixed generator by increasing the building sum insured with the replacement value of the system, which can be added to the Participation Quota (PQ). “The system will be covered in full for typical building risks such as fire, hail, impact and accidental damage.”

Other cover options include increasing the power-surge and/or exterior theft first loss limit to ensure that they are covered for all losses up to the chosen amount on a first loss basis. Another option that has been seen in the market is to add the solar system as a specified item with an additional premium payable which includes full building cover without limitations on theft and power-surge. “In this instance, the system should be specified at full replacement value.”

Those who live in residential estates or complexes need to obtain approval from body corporates or homeowners’ associations when looking to install solar. “As this is a new subject matter to deal with, combined with the current reality of unprecedented load shedding, it is very important to add this insurance matter to the agenda at upcoming AGM’s for members to understand the cover they will enjoy for solar panels, what it excludes and if there are any limitations.”

But, what are your options if your body corporate or HOA does not want to increase the sum insured of your building? “We are currently seeing reluctance from some body corporates and HOA’s to add installed solar panels to their building insurance, even though owners should insist that building sums insured be increased.”

If there is still resistance, residents and owners living in estates or complexes will need to take out cover for their solar panels on their personal policies. “We have seen various cover options in the market ranging from adding these solar panels to contents cover, to specifying it as an all risk item.”

Van der Linde cautions consumers as well as body corporates and HOA’s to ensure that solar systems are installed by a qualified, accredited installer who is able to issue a certificate of compliance as insurance companies and manufacturers may reject claims if the system is not installed by an accredited installer. “Reputable installers should have liability cover, product liability and cover against defective workmanship. When contacting solar installers ask to see their proof of liability cover.”

“We will continue to keep a close eye on the market for further trends and developments on this front and remain committed to providing comprehensive advice on the best insurance solutions for solar panels.”

“If you plan on investing in renewable energy installations ensure that you are adequately insured by talking to your broker for the best product options for peace of mind should something go wrong,” concludes van der Linde.

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Dear Mr Ramokgopa: Ending the energy crisis shouldn’t stop our Just Energy Transition

After much anticipation, President Cyril Ramaphosa has announced the appointment of South Africa’s first Minister of Electricity, Kgosientsho Ramokgopa. With the new position introduced during the President’s State of the Nation address in February, Ramokgopa has now been given the thankless task of solving the country’s burgeoning energy crisis – or what Ramaphosa has termed an “existential threat” to both the country’s economy and the very foundations of our society. Considering how every hour of loadshedding costs the South African economy some R500-million in lost revenue, the pressure is on for Ramokgopa to make good on the President’s promises.

But as the debate over national leadership’s response rages on (i.e. the state of disaster, Karpowership, Eskom bailouts, etc.) it is important to consider that, while the energy crisis is indeed a foremost priority, so too is the need for a Just Energy Transition. What’s more, we recognise that these two focus areas are not mutually exclusive. On the contrary, the crisis has shown that renewables are playing a key role in fast-tracking additional supply. As a result, they are making important socio-economic contributions in a period of great market uncertainty, and in-turn accelerating South Africa’s progression towards a green(er) economy.

An obvious example of this is the explosive uptake of solar energy in recent weeks, propelled by households and businesses looking to get themselves off the grid. Supported with policy reform and new tax incentives, the sector is now unlocking new commercial opportunities for industry and consumers alike, with the construction of solar factories also resulting in new job opportunities for South Africans. With the proper support, similar outcomes can come from other renewable sources such as wind, which could deliver an additional 250 000 jobs and more than R150-billion in gross value-add to the economy over 25 years[1].

Likewise, the CEO of Anglo American – one of the leading coal mining operators in the country – believes that green hydrogen can add up to 14 000 jobs per year and unlock synergies with the platinum mining sector (which currently employs more than 170 000 people and would be expected to increase, thanks to platinum group metals being a key ingredient in the manufacture of hydrogen engines and batteries)[2].

Together, these findings signal how the introduction of renewable energy can usher in not only advantages for the environment, but new revenue opportunities for businesses and new job opportunities for the unemployed too. Furthermore, the adoption of renewables stands to bolster South Africa’s economic security and competitiveness for the long-term, as our leading trading partners like the European Union threaten to impose significant import duties on goods manufactured in high-carbon energy markets where coal and non-renewables remain dominant[3].

More importantly, these developments show that while energy insecurity is an immediate crisis that demands a swift response, it does not dictate that South Africa abandon its efforts aimed at introducing a Just Energy Transition (JET). In fact, Ramokgopa can take direction from both the President and Minister of Forestry, Fisheries and Environmental Affairs, Barbara Creecy, who have publicly shared their alignment in this regard.

In his address to the nation, President Ramaphosa stated that South Africa “will continue [its] just transition to a low-carbon economy…” further adding that this would be done in a way that accounts for the current crisis and opens up the possibility of new investments, new industrialisation, and new jobs[4]. This was echoed by Minister Creecy, who, during a panel discussion at the Mining Indaba in Cape Town, explained that national government remains committed to balancing the needs of the energy crisis with those of a just transition[5].

Admittedly, this will be no easy task for the new Minister, with opponents already calling on him for a laundry list of next steps. To this end, it would be wise for Ramokgopa to consult and partner with industry, which has the working knowledge, resources and networks needed to more efficiently solve the crisis and achieve JET. As a start, the Minister can simply tap into the partnerships already happening between players in the industry.

A good example of this is the ‘Innovation Partnership on Energy’, an initiative driven by Global Alliance Africa – a UK-Aid-funded project delivered by Innovate UK KTN. Over the past few months, Innovate UK KTN has organised several ‘Energy Advisory Brainstorms’ which brought together a group of representatives from energy producers and, among others, the likes of the CSIR, the Presidential Climate Commission, the South African National Energy Association, and the Department of Trade, Industry & Competition, and Department of Environment, Forestry & Fisheries. Together, they are exploring how innovation and international collaboration can be harnessed to unlock new opportunities for energy production and usage in South Africa.

Already, the group has identified several energy-innovation focus areas in which the public, private and civil sectors can collaborate towards:

First, innovation partnerships should be leveraged to support efforts aimed at developing a mix of small energy businesses and large corporations. A good mix of businesses will create space for more low-trained jobs, while leaving room for highly technical opportunities down the line. Second, that innovation partnerships should tap into global expertise and look to energy solutions from multinationals and foreign markets, where we are more likely to find successful use-cases and adaptable solutions to energy security and job creation. And third, that innovation partnerships can enhance policy redress, thanks to improved coordination across regulatory bodies and improved collaboration and knowledge sharing between industry players.

In doing so, the Innovation Partnership on Energy has also identified several first steps which South Africa should take in this regard:

Among these is the establishment of a ‘project help hub’ where businesses looking to enter the renewable energy space can receive technical and capacity-building support to equip both their operations and staff with the knowledge, resources and training they need to establish ‘green’ foundations. Another focus area is the development and implementation of new funding models (such as off-take agreements, project preparation grants, kick-starter funding, concessional debt funding, and other financial streams) to ensure that this process is well financed.

Additional priority areas include a focus on decarbonising hard-to-abate industrial sectors and creating new hydrogen commodities for export, such as green ammonia, sustainable aviation fuel, green steel, and green LPG, among others. Also, the development of South Africa’s workbench was also stressed, which entails identifying and attracting strategic foreign intellectual property rights holders to set up production houses in South Africa. Finally, we need to take active measures to stabilise the national grid on a smaller scale using many smaller solutions. Doing so will relieve the national utility of the sole burden of power generation, while also affording greater competition and stimulating innovation across energy fields.

These are just a few of the areas being investigated by Global Alliance Africa and the Innovation Partnership focusing on a JET. Their next step is to assist industry in the building-out of project plans, gathering of stakeholders to execute on them, and exploration of new funding mechanisms to enable movement. However, progress can only be achieved if we catalyse engagement from across the energy ecosystem. To this end, we call on Mr Ramokgopa  and other players in the industry to collaborate with us, should working towards solving South Africa’s energy crisis and Just Energy Transition meet your mandate.

You can get involved in these initiatives with the South African JET Global Innovation Network by contacting alana.kruger@iuk.ktn-global.org

This article was written by Alana Kruger, Knowledge Transfer Manager for South Africa at Innovate UK KTN Global Alliance Africa.

Do not miss GREEN ECONOMY JOURNAL ISSUE 57 (APRIL/MAY) featuring the Just Energy Transition

[1] https://www.engineeringnews.co.za/article/south-africangreen-energy-transition-can-create250-000-morejobs-over-25-years-gwec-2022-02-17

[2] https://businesstech.co.za/news/energy/666539/south-africas-hydrogen-valley-could-create-14000-jobs-ceo/

[3] https://www.businesslive.co.za/bd/national/2022-12-05-exports-will-suffer-if-power-sector-sticks-to-coal-creecy-warns/

[4] https://www.gov.za/speeches/president-cyril-ramaphosa-2023-state-nation-address-9-feb-2023-0000

[5] https://africaclimatereports.org/2023/02/south-africa-seeks-to-balance-addressing-energy-crisis-just-transition/

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Electricity Minister launches Resource Plan to accelerate Energy Action Plan implementation

Minister in the Presidency for Electricity, Dr Kgosientsho Ramokgopa, says collaboration between government, business and society is imperative if South Africa is to overcome the current electricity crisis gripping the nation.

The Minister was speaking during the launch of the Resource Mobilisation Fund (RMF) on 9 March. The RMF is a collaborative effort between government and Business Unity South Africa (BUSA) to provide resources and expertise that will assist government to fully implement the Energy Action Plan.

“The establishment of the Resource Mobilisation Fund is a significant step in this regard. It is only through a collective national effort that we will be able to end loadshedding and enable our economy to grow.

“The RMF is an example of the collaborative approach between government and social partners which the President has always prioritised. Most importantly, it shows what we can achieve if we roll up our sleeves and go beyond debate and discussion to engage in real, practical action on the issues that confront our society,” he said.

Ramokgopa explained that the fund is expected to play a critical role in assisting government to implement government’s Energy Action Plan (EAP) with more drive.

“The RMF will provide crucial expertise and resources to turbocharge the work of NECOM [National Energy Crisis Committee] and ensure that we put the best minds in our country and indeed across the world to work on this problem.

“The tremendous support which this initiative has already received from businesses and philanthropies alike is evidence that we can work together as Team South Africa to get our country back on track. We look forward to a strong partnership with the RMF as we move to ensure swift and full implementation of the President’s plan,” he said.

Minister Ramokgopa said although the RMF comes as a boon for turning around the current energy crisis, government has already been hard at work to bring more urgently needed megawatts onto the power grid.

Some of the work done includes:

  • Eskom is implementing a detailed Generation Recovery Plan to improve its performance, focusing on six power stations that contribute the most to load shedding.
  • The licensing threshold for embedded generation projects has been removed which has opened the way for private investment in electricity generation.
  • A new determination for close to 1 5000MW of new generation capacity from wind, solar, and battery storage has been published and project agreements for 2 800MW from bid windows 5 and 6 have been signed.
  • A Request For Proposals for 513MW of battery storage has been released which will be followed shortly by the release of Bid Window 7.
  • The Minister of Finance has announced significant debt relief for Eskom totalling R254-billion, as well as a substantial fiscal support package, which includes tax incentives for businesses and households to invest in rooftop solar.
  • Red tape has been cut and the regulatory requirements for energy projects has been streamlined to reduce the time that it takes for new generation capacity to the grid.

Article courtesy SAnews.gov.za

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