Page 5 - AfrElec Week 43

AfrElec COMMENTARY AfrElec
Renewable energy
Meanwhile, Mineral Resources and Energy Min- ister Gwede Mantashe said on October 29 that fresh bidding rounds for new generation to fill the estimated four-year supply gap would wel- come interests from all forms of generation, not just renewables.
“We can’t deal with renewable energy pro- ducers as if they are an emergency [measure]. We should treat them as a technology and not an emergency. When we open applications for new generation everybody will be able to bid for that, including renewable producers,” he said.
He said that one result of the new IRP was that the government would immediately look at 17 applications for distributed generation licences that had been on hold awaiting the details of the IRP had been promulgated.
Mantashe’s refusal to approve new green projects is based on a distinct lack of enthusi- asm about renewables in the ANC and the trade unions, for whom Eskom is often a source of political power and patronage.
Recent revelations of corruption at Eskom and nuclear operator Necsa have highlighted close bonds between the power sector and ANC politics. Eskom board member Busisiwe Mavuso told Parliament this week that the company had experienced intense political pressure over the past year to keep the lights on irrespective of the cost.
Budget
There was little better news on October 30, when Finance Minister Tito Mboweni in his budget speech confirmed that the government would give ZAR26bn ($1.8bn) to Eskom this year. However, this is not new cash and forms part of the existing bail-out promises.
He also said that the government would pro- vide ZAR230bn ($15.7bn) over 10 years, as pre- viously promised.
He lowered the economic growth forecast to 0.5% for 2019 from February’s forecast of 1.5%. Growth would then rise to 1.7% in 2022.
Questions remain about how well the break-up of Eskom is carried out. The emer- gence of a truly independent and robust TSO that cannot be influenced by Eskom will play a crucial role.
The sheer scale of Eskom’s debt, its vulnera- bility to blackouts and its absolute dependence on government policy for its financial and oper- ational future means that Eskom will play a cen- tral role in South African politics for some time to come.
The government may have outlined its reform plans, but it had yet to name a new CEO or board. Eskom’s problems are demonstrated by its daily notices about load-shedding, which again reached a peak two weeks ago because of technical problems at the flagship Medupi power station.
Esko’s twitter account said on October 30 that no load-shedding was anticipated this week, which is good news of a sort.
However, the firm said that its power plants continued to remain vulnerable, and any unex- pected shift such as an increase in unplanned breakdowns could result in load-shedding at short notice.
This could be an accurate outline of the com- pany’s economic position as a whole. It is not going bust this week, but it could at any point in the future if unexpected events take place.
The next shock could be Moody’s review of the country’s sovereign debt on November 1. South Africa’s last investment grade credit rating is extremely vulnerable.
Any downgrade could be a powerful eco- nomic blow to the South African economy. This could cause $1.5bn of investment to leave the country immediately, the International Mone- tary Fund has warned.™
Recent revelations
of corruption at Eskom and nuclear operator Necsa have highlighted close bonds between the power sector and ANC politics
Week 43 30•October•2019 w w w . N E W S B A S E . c o m
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