As a strategy to deal with the electricity supply crisis in South Africa, President Cyril Ramaphosa announced on 10 June 2021 that the limit for self-generation of electricity is being moved from 1MW to 100MW. This policy change will allow the private sector to sell excess capacity into the grid, which is expected to take pressure off Eskom.
This sudden move was deliberated upon on 11 June during the North-West University (NWU) Business School’s second Pitso webinar. The panellists were Dawie Roodt, chief economist at the Efficient Group, Dr Kelvin Kemm, nuclear physicist and former chairperson of the South African Nuclear Energy Corporation, and Ebrahim Fakir, director of programmes at Auwal Socio-Economic Research Institute.
Insightful perspectives ensued from the to-the-point questions posed to the panellists by Dr Piet Croucamp from the Business School.
An economic, political and nuclear energy perspective
Dr Kemm thoroughly explained what this policy means for South Africa and how the load shedding issue is more complicated than what most people realise.
“Adding privately generated electricity to the power grid is not as a simple as it may sound, since South Africa relies heavily on fossil fuel-generated electricity.”
He added that alternative energy sources such as solar and wind energy, and specifically nuclear energy, should be further explored.
Dawie spoke about Eskom’s debt and how the unstable and limited electricity supply affects the country’s growth potential.
“With this new policy the cap on economic growth could potentially be lifted which could result in an increase in foreign investment for the country,” he said.
He also emphasised the role the private sector could play in stimulating economic growth, through for instance increased competition in the generation and distribution of electricity, if allowed by government.
Ebrahim said due to the previous announcements on the issue and mounting pressure from the public and industry, the policy change by the President has been a long time coming. He added that this move is both practical and ideologically political, especially because local governmental elections are coming up, and this could give the President a quick political win.
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