He said this on Friday afternoon in an expert panel discussion centred on this development hosted by the North West University (NWU). 

Roodt says the move leans more towards the privatisation of electricity generation in the country as more players will now enter the energy sector. 

On Thursday, President Cyril Ramaphosa made the surprise announcement that Schedule 2 of the Electricity Regulation Act is being amended to increase the National Energy Regulator of South Africa (NERSA) licensing threshold for embedded generation projects from 1 MW to 100 MW. The embedded generation is when a private company produces electricity for its own use or for use by others. 

Roodt elaborates further on his point, “Because of the lack of electricity, we’ve had a huge improvement in electricity production in the last decade or so in South Africa. Eskom has been run into the ground. Outstanding debt is roughly R400 billion or so. So Eskom needs a lot of support. I’m afraid to say it’s likely the beginning of the end for Eskom”.

Nuclear physicist and former chairman of the South African Nuclear Energy Corporation (Necsa), Kelvin Kemm, on the other end cautions that South Africa’s power system is more complex than people give it credit for. He says Khusela and Medupi are the 3rd and 4th biggest power stations in the world so any suspicion of something being wrong especially on the back of a lack of maintenance over time, results in management closing operations down to be on the safe side.  

Roodt, Kemm and Ebrahim Fakir, who is the director of programmes at Auwal Socio-Economic Research Institute, weighed in on the developments. 

Ramaphosa’s announcement has been welcomed by private power producers and experts. It is expected to alleviate the impact of load-shedding by Eskom, which has in the last two weeks caused an uproar in light of the winter period. Ramaphosa said, “generators will also be allowed to wheel electricity through the transmission grid, subject to wheeling charges and connection agreements with Eskom or the relevant municipality”. 

Private power producers do need to be in possession of a grid connection permit in order to ensure compliance.

South Africa’s energy crisis has over the last years been attributed to rampant looting at the power regulator, Eskom, notably exposed during the Commission of Inquiry into State Capture.

OFM News