Presidency, big business double down on forecasted end to Eskom blackouts by 2025

Optimism regarding the end of Eskom blackouts is largely based on the explosion of renewable energy projects, especially solar, in recent months.

Presidency, big business double down on forecasted end to Eskom blackouts by 2025

The Presidency and organised business remain committed to their forecast that higher stages of Eskom blackouts will end in 2024, but that if load shedding persisted during the year, the worst-case scenario was that it would be restricted to Stage 1.

Both parties also believe that blackouts will end entirely in 2025 after 16 years of damage to the economy and people’s quality of life.

Over the past year, some of the country’s top business leaders have partnered with government to mobilise skills and financial resources to help resolve the energy crisis, fix Transnet’s inability to operate efficiently and reduce crime and corruption.

Now, business leaders believe that reforms across key sectors of the economy are starting to deliver benefits, especially on the energy side.

Rudi Dicks (left), the head of the Project Management Office in the Private Office of the Presidency. (Photo: Ntswe Mokoena / GCIS) | Martin Kingston, Chairman of Business for South Africa (B4SA). (Photo: Supplied)

James Mackay, CEO of the Energy Council of South Africa and a member of the reform initiative between the Presidency and organised business, said the optimistic outlook on the end of Eskom blackouts is largely predicated on the explosion of renewable energy projects in the country, especially solar, in recent months.

In 2023, South Africa saw more than 2,600MW of roof-top solar installations, said Mackay, which made people’s homes and businesses partially independent of Eskom’s unreliable electricity supply.

More than a year ago, government allowed businesses to generate their own power and to sell excess electricity to the grid.

Since then, Mackay said businesses have been enthusiastic about developing wind and solar energy projects at a utility-scale — a growth trend he expects will continue in 2024 and 2025.

Mackay said the end-of-blackouts forecast by the Presidency and organised business is also informed by Eskom’s efforts to increase power plant performance and minimise breakdowns.  This has, in part, helped South Africa to avoid load shedding over the past 40-odd days.

At a media briefing on 9 May, Mackay gave an update on energy reforms: “The plan [by Eskom to fix its power stations] said we can largely end load shedding in 2024, which, from an economic perspective, is an average Stage 1 and below.

“By the end of 2025, we would have recovered enough [electricity] in the system to have reserve margin and stability, where we can say we are out of load shedding.”

Rudi Dicks, head of the project management office in the Presidency, shared Mackay’s enthusiasm, saying there would be 22GW (22,000MW) of electricity generation capacity from the private sector in the coming years.

This generation capacity, said Dicks, is in the “final stages” and awaiting approval for grid access,  a process of making the country’s electricity infrastructure available to connect the renewable energy produced by private players.

However, the infrastructure is old and inhibits grid access.

“Our estimation is that during 2024, we will get under 4,000MW from private sector initiatives; in 2025, over 7,000MW; and 8,000MW in 2026. Irrespective of the situation, the private sector projects that were planned three years ago are now coming into fruition,” said Dicks.

Electricity procured from private producers through the previous six bidding rounds, as part of the IPP programme, is starting to deliver megawatts, he said.

The government recently launched bid window seven, which is set to procure 5,000MW of renewable energy capacity consisting of 3,200MW of onshore wind and 1,800MW of solar projects.

Bid submissions were scheduled for 30 April 2024 but there were delays, which might also push out the announcement of preferred bidders to a later date.

The optimism of the Presidency and organised business is not reflected in the Cabinet-approved draft 2023 Integrated Resource Plan (IRP), which serves as a guide for the procurement of new generation by the government.

The plan, which replaces the 2019 version, still sees power supply in South Africa being constrained for the next six years due to an “electricity supply gap”, despite efforts to add new supply to the grid.

Dicks said that the IRP is still being reviewed by government and will likely be amended to reflect the current energy reality.

On the logistics side, the Presidency and organised business want to help Transnet to move with speed in auctioning rail slots, allowing private sector players to use their skills to run trains/railway lines for a set period, while also investing in the upgrading and securing of infrastructure.

On crime and corruption, business wants to implement measures that help to speed up the successful prosecution of State Capture cases and capacitate the National Prosecuting Authority with private sector skills. It also hopes to see legislation passed to grant the Investigating Directorate permanency, with government recommendations on key intelligence, policing and security reforms to be implemented expeditiously.

Martin Kingston, the chair of Business for South Africa, said the upcoming general election would not delay the implementation of reforms as organised business was prepared to work with the next administration.

Most of the reform initiatives have a deadline of 2025, said Kingston. DM