Inroads being made to facilitate procurement of independent power by municipalities, says Presidency

Minister in the Presidency Khumbudzo Ntshavheni on Tuesday said government was making headway in facilitating the procurement of independent power by municipalities and the reinstatement of water quality monitoring systems.

The Energy Action Plan, which President Cyril Ramaphosa announced in July last year, outlines a clear path to reduce the severity and frequency of load-shedding in the short term and achieve energy security in the long term through a fundamental reform of the electricity sector.

In a statement, Ntshavheni said the key achievements in implementing energy reforms to date include amending Schedule 2 of the Electricity Regulation Act to remove the licensing requirement for generation projects of any size.

“More than 100 projects are now at various stages of development, representing over 10,000MW of new generation capacity and over R200bn of private sector investment.

“Second, accelerating procurement of new generation capacity. Three projects from the risk mitigation programme have entered construction, with a further five projects expected to reach financial close during this quarter. Project agreements have been signed for 25 preferred bidders from Bid Window 5 and 6 amounting to about 2,800MW, of which 784MW is already in construction,” Ntshavheni said.

Also progressing is the facilitation of municipalities’ procurement of independent power.

“Driving the living progress on the unbundling of Eskom into separate entities for generation, transmission and distribution. Significant progress has been made towards the establishment of the National Transmission Company of SA [NTCSA] as an independent subsidiary of Eskom.

“The NTCSA has applied to Nersa for transmission, electricity trading, and electricity import and export licences on which a decision is expected shortly. The appointment of a board for the NTCSA is being finalised in parallel to the licence application to ensure that the new entity can be operationalised as soon as possible,” she said.

“Also, the 2023 budget introduced R254bn in debt relief to Eskom, subject to strict conditions and, finally, introducing tax incentives to support small-scale embedded generation.

“The minister of finance [Enoch Godongwana] announced powerful tax incentives for businesses and households to invest in rooftop solar, where we are now seeing a massive surge of investment,” she said.

In terms of water resources control, Ntshavheni said the number of water use licence applications processed within the revised time-frame of 90 days has increased to 70% from 35% in the first quarter of 2022, and the water department is targeting a further improvement to 80% of all applications.

“The Blue Drop, Green Drop and No Drop water quality monitoring system has been reinstated, with updated reports due to be published within the next quarter. This will provide a thorough assessment of the state of water infrastructure at municipal level and enable intervention where municipalities are failing to meet minimum norms and standards for water service delivery,” she added.

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