While South Africa is on the road to long-term energy stability as business and independent power producers (IPPs) begin construction on various embedded generation projects, the country is probably two years away from a major change in the electricity supply scenario, Business Leadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter.

“Despite progress in opening the way for private companies to more easily build plants up to 100 MW and [a resumption in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)], we are facing unprecedented levels of load-shedding, severely disrupting business and our daily lives,” she says.

“The obvious question is whether we have exhausted our wells of creativity to find ways to lessen the challenges in the interim and speed up the point of resolution. I think there is more we could be doing,” Mavuso avers.

She says the organisation will be working with its members to assess progress by business in using the regulatory space now available to invest in new generation. It intends to ensure all parties are aligned to make the delivery of new generating capacity as smooth and rapid as possible.

Mavuso highlights that the key challenge is how quickly electricity can be connected to the grid.

“In this respect, we have failed to ‘make a plan’ when confronted with challenges. One attempt was the so-called ‘expedited’ procurement round of the IPP Office. This was an effort to rapidly bring 2 GW of power to the grid but it is now in disarray.

“It was meant to be delivering new capacity from the middle of next year, but it is embroiled in litigation largely because more than half of the power was awarded to Karpowership, which would use liquefied natural gas [to generate electricity] at a high cost.

“Many have [also] rightly objected to the 20-year procurement agreements that the programme envisaged signing,” Mavuso notes.

She posits that, in the medium term, the country should be bringing on low-cost and clean generating capacity.

She highlights that the recently closed fifth bid window of the REIPPPP showed how that is possible, with average prices secured of 47c/kWh for a mix of solar and wind energy.

“So, we have somehow failed to make the obvious plan – engage Karpowership on a short-term deal while we wait for more sustainable lower cost generation to come into production. I think this comes down to vested interests and a lack of political will. But it remains a plan that could be made.

“The other obvious point is that the balance of the emergency round, which consisted of renewables and battery storage solutions, should be pushed forward as soon as possible,” Mavuso emphasises.

She says interventions should not only focus on capacity from outside of State-owned utility Eskom.

“Eskom has resources that it could combine with private sector operators to quickly develop new capacity. That would take a willingness for Eskom to directly contract with private partners to exploit such opportunities, which will need political support. Yet it is a way we could be making more plans to deal with the immediate crisis faster,” she states.