Response By Minister In The Presidency For Electricity To The President’s State Of The Nation Address

13 February 2024

Madam Speaker (adapt based on presiding Officer)
Honourable President, Deputy Presidents and Cabinet Colleagues,
Members of Parliament, the Media and the People of the Republic.
Madam Speaker,

In his recent State of the Nation Address, the President introduced us to Tinswalo.

This eloquent metaphor encapsulates the lived experiences and journey of progress our nation has undertaken over the past three decades of democracy. As we reflect on this metaphor, we are reminded not only of the strides we have made but also of the challenges we continue to face, particularly in the realm of energy supply. Much like Tinswalo, the path to achieving a stable and sustainable energy landscape has been fraught with obstacles, uncertainties, and temporary setbacks, and yet – with each passing day, we continue to register progress as we chart the path to energy security.

Moreover, just as Tinswalo symbolises our people’s resilience and perseverance, so does it inspire our resolve to confront the complexities of the political economy of energy provision. South Africa stands at a pivotal juncture where the imperative to modernise and diversify our energy infrastructure is paramount.

It is incumbent upon us to harness the potential of renewable resources, foster innovation, and cultivate partnerships that will ensure the reliability of our energy supply, drive inclusive economic growth, and further expand the reach of reliable and affordable energy. Our definition, therefore, of energy security is not only to keep the lights on; it is about empowering communities, driving progress, and ensuring a future where every individual has access to reliable, affordable and sustainable energy sources.

Through collaborative efforts and unwavering determination, we have and continue to navigate the currents of change and emerge stronger, guided by the spirit of Tinswalo towards a brighter, more sustainable future for all South Africans.

Units returned to service and Demand side gains.

As part of our immediate relief to load shedding last year (2023), Units 1-3 of Kusile, which had been out of service since October of 2022, were successfully returned ahead of schedule. As planned, Unit 5 was synchronised to the grid in December 2023, contributing 800 MW. The four Kusile Units collectively injected 3,200 MW of capacity into the grid.

The Standard Offer Programme has been hugely successful. It has been developed and implemented whereby generators can sell energy at a standard determined rate or according to the dynamic rate. As of January 2024, 720 MW was contracted, with 100MW made available to the grid, and a further 316 MW have been approved for contracting.

Medupi Unit 4 will return to service this year in September 2024. Kusile Unit 6 will be synchronised in late November 2024. These units will add 1600 MW to the grid. In addition, Unit 2 of Koeberg will return to service in September 2024, giving us 980 MW following a planned outage. These interventions will add another 2580 MW to the grid. The end of load shedding is indeed within sight.

Our demand-side interventions have similarly yielded exceptional results. South Africa’s installed rooftop solar PV capacity increased from 983MW in March 2022 to 4,412MW in June 2023. It is expected that private generation will continue to contribute to rooftop solar and embedded generation growing exponentially; an additional 1500 MW is expected to come online incrementally in 2024

Since September 2023, planned maintenance increased sharply. This meant that whereas we could have opted for the short-term gain of reducing load-shedding; since then, we opted for the more enduring approach of ramping planned maintenance.

This will ensure that going into the winter of 2024, the fleet’s reliability will have been significantly strengthened. This also means that heading into the winter peak demand period, we can claw back up to 2000 MW by tapering planned maintenance and strengthening available capacity. From March 2024, we will begin reducing planned maintenance from 6000 MW to 5000 MW in April 2024 and to around 3500 MW in May 2024, a threshold that will be sustained during the winter demand period.

Bolstering New Generation Capacity

Whilst the unbundling of Eskom continues, the sustainability of the Generation division is critical to ensure the national utility remains the backbone of our energy supply capability and, ultimately, our energy security. Eskom will increasingly leverage its vast land portfolio and transmission infrastructure to expand its renewable energy and battery storage systems investments.

Eskom is proceeding at pace to appoint a Transaction Advisory (TA) Team to undertake a procurement process for partners to develop the Richards Bay Closed Cycle Gas Turbine, which is planned to yield a further 3000MW.

Madam Speaker, Gas will increasingly feature prominently in our short to mediumterm base load requirements. ESKOM is working on converting Gourikwa and Ankerlig to gas from diesel on the Open Cycle Gas Turbine (OCGT) technology. This initiative is anticipated to yield an additional 2000MW, with a further 1000MW expected from the conversion to Closed Cycle Gas Turbines (CCGT).

Emphasising the pivotal role of nuclear energy in our energy mix, the government will commence the procurement process of an additional 2,500 MW of new nuclear capacity this year on an affordable scale and pace basis, as well as the 1500 MW pump storage facility at Tubatse in Limpopo.

While acknowledging that these are long-term endeavours, we underscore the importance of sustained strategic long-term planning to ensure the sustainability of our energy infrastructure and security.

As we delve deeper into the intricate web of the political economy of energy, it becomes evident that our expansion plans for generation and transmission serve as linchpins for fostering industrialisation, massifying skills development, and catalysing job creation. The interconnectedness of the energy industrial complex and broader industry underscores how a robust energy infrastructure is pivotal in driving economic growth and fostering industrial competitiveness.

Crucially, Madam Speaker, the efficacy of our generation initiatives, including our renewable program, hinges on modernising and expanding our National Transmission infrastructure.

The Ministry of Electricity will lead the process of establishing an Independent Transmission Project Office (ITPO) to fast-track procurement, planning and financing for upgrading, modernising, and expanding our transmission infrastructure. Over the next ten years, this intervention will attract up to R400 billion in transmission infrastructure investments. To this end, plans are at an advanced stage with various fit-for-purpose South African Development Finance Institutions (DFIs) to confirm the institutional locus of the planned ITPO; an announcement in this regard will be made in the coming weeks.

The Office will crowd in private sector participation by creating a programmatic approach to accelerate the country’s transmission network infrastructure rollout and advance South Africa’s economic growth and development ambitions.

As part of this work, in the short term (2024-2028), the focus will be implementing a set of interventions, or priority corridors, to strengthen transmission capacity in the Western, Northern and Eastern Capes. Projects that will inter-alia be delivered include 2,335 MW of new grid capacity, including the Aries Upington 400kV line, the Juno Gromis 400kV line, the Poseidon Pembroke 400kV line and transformers at Nama, Kronos and Upington sub-stations.

These priority corridors will be implemented as a ring-fenced structure whilst the Independent Transmission Projects Office (ITPO) institutional arrangements are being established.

Using our response to the crisis to support industrialisation, skilling and job creation

Expanding and modernising our energy infrastructure will not only bolster the reliability and accessibility of energy but also lay the foundation for a thriving industrial sector. Strategic investments in energy and energy-intensive industries and targeted support for small and medium enterprises can unlock new opportunities for innovation, diversification, and value addition, propelling South Africa towards becoming a global leader in sustainable manufacturing and production in the energy sector.

By investing in developing a skilled workforce tailored to the demands of the energy sector, we ensure the long-term viability of our energy projects and empower Tinswalo and her generation with the tools and knowledge needed to thrive in a rapidly evolving economy.

In this regard, we will, in the coming days, finalise a Memorandum of Understanding between the Ministry of Electricity and sister Departments supported by the Manufacturing, Engineering and related services SETA (merSETA). This MoU consolidates an inter-departmental initiative that will annually seek to train, skill and reskill upwards of 25 000 beneficiaries in the energy sector.

Madam Speaker, energy security must go beyond mere resource preservation; it must be the basis for equitable access and empower historically marginalised and vulnerable communities. Let us act now to lay the building blocks for a future where sustainability, prosperity and social justice intertwine, and energy catalyses our collective prosperity. To Tintswalo, as your beloved uncle, I hear your cry, understand your anger, and feel your pain due to load shedding.

I draw counsel from President Oliver Tambo when he said, “The end is glorious; it is peaceful. The intervening period is dark and bitter and finds its glory in acts of struggle.”

I do give you my word:

The end of loadshedding is indeed in sight; the future is bright

Tinswalo! Tinswalo! Tinswalo!