1/ Energy security is 1 of 4 priorities in President @CyrilRamaphosa’s Reconstruction and Recovery Plan. Makes sense. South Africa cannot power a post-COVID economic recovery unless it has an adequate & reliable power supply. Here’s my thread on the + & -
2/ Positives in @CyrilRamaphosa’s plan
Energy security is prioritized
Key intervention areas are recognized:
a) fast track procurement of new power as per IRP elec plan
b) ease licensing for self generation
c) restructure Eskom to enable competition
d) no nuclear distraction
3/ Negatives in @CyrilRamaphosa’s energy security plan
a) silly mistakes around dates for new power coming on line (will embarrass president next year)
b) insufficient detail to hold ministers to account
Accuracy & details matter in strategies if we’re to see postCOVID recovery
4/ There’s no way for 2000MW emergency power procurement to come online by June 2021
Please correct this expectation @PresidencyZA
Also RMIPP programme design is geared to fossil fuels and will result in expensive power, late
Need to focus instead on least-cost IRP options
5/ There’s no way for 11,800MW IRP power to come on line by 2022
Please correct this expectation @PresidencyZA
3m for preparing bids
2m for evaluating & awarding
6-12m for contracts & financial close
12-18m for solar PV construction
18-24m for wind construction
gas much longer
6/ Freeing up self power gen is NB in South Africa but regulatory reform proposals need to be precise. Energy Minister @GwedeMantashe1 says it’s allowed but omits that license exemption only if off-grid. Mines and large industries want to invest in solar PV but remain grid tied
7/ If SA is serious about economic recovery we need to make it easier for electricity consumers to invest in their own power solutions. Energy Minister @GwedeMantashe1 needs to amend Schedule2 of Electricity Regulation Act to exempt licences for self generators EVEN IF GRID TIED
8/ South Africa has an unusually dirigiste power planning and investment & regulatory framework. Energy Minister @GwedeMantashe1 needs to publish a letter to the regulator NERSA permitting deviation from the IRP plan and allowing it to licence self generators even if grid tied
9/ Electricity consumers want freedom to generate their own power, feed back to the grid and sell to 3rd parties. South Africa is short of power. The energy minister @GwedeMantashe1 needs to amend schedule 2 of the Electricity Regulation Act to exempt licence requirements <40MW
10/ South Africa is so far behind the rest of the world, including our BRICS partners, in freeing up our electricity market.
No one would now argue for a Telkom monopoly in telephony, internet, broadband, fibre.....
@Eskom_SA can no longer be a monopoly
11/ Three examples of how current regulations frustrate investment in power (there are many more)
A. Large mining company wants to invest in low cost solar PV to off-set high Eskom supply costs, wants to remain grid-tied, but NERSA won’t grant licence because no provision in IRP
12/ Another e.g.
Large global tech company has electricity intensive data centers in a South African metro & has commitment to be 100% renewable energy supplied by 2025. They want to contract with solar & wind IPPs but they can’t get licences and grid wheeling charges uneconomic
13/ Another e.g.
South African household has rooftop solar PV + batteries. Against industry advice vis a vis bureaucratic barriers, opts for feedback but municipality pays half supply tariff & annually cancels out any surplus fed back, i.e. requiring household to be net consumer
14/ It’s obvious that a huge pipeline of investment could be freed if regulations allowed electricity consumers to generate their own solutions. And South Africa could move swiftly to energy security. It’s not difficult. Energy Minister @GwedeMantashe1 has the power
15/ Two more comments on President @CyrilRamaphosa’s energy security proposals in the Reconstruction and Recovery Plan
Deadlines need to be set for the unbundling & establishment of a separate state-owned transmission system and market operator (ITSMO) to facilitate competition
16/ Last comment on President @CyrilRamaphosa’s Reconstruction and Recovery Plan.
Despite sound advice, no concrete proposals have yet been adopted for @Eskom_SA debt relief and refinancing. South Africa’s government can’t keep kicking that massive can down the road....
17/ OK, not quite the last comment on the energy component of President @CyrilRamaphosa’s post COVID recovery plan. We could say more about the energy ministry’s fixation on gas, or the need for more detail on a just energy transition. Another time

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More from @AntonEberhard

27 Mar
1/ I’m really trying to stay positive during the lock-down but we also need to think about the resilience of our economy and future growth prospects. This move by SA’s Energy Minister @GwedeMantashe1 was cranky, short-sighted and detrimental. Here’s why (in the thread below)
2/ South Africa’s Energy Minister has gazetted a schedule 2 amendment (under the Electricity Regulation Act) specifying which categories of electricity generators don’t need a licence from the regulator, NERSA. He decided <1MW rather than <10MW, ignoring stakehokder advice
3/ The Dept of Mineral Resources & Energy argues that they need control over, and knowledge of, who connects to the electricity grid & that the NERSA licensing process enables this. Let’s examine why & whether there are more efficient ways of doing this for smaller generators
Read 9 tweets
18 Mar
1/ It’s not easy for me to tweet this. I was a Board member of the National Energy Regulator of South Africa (NERSA) many years ago but they are not now serving South Africa as they should. Let me explain why in the thread below. Read this first nersa.org.za/wp-content/upl…
2/ South Africa is experiencing crippling power cuts which constrain economic activity and prejudice household welfare. We urgently need new power procurements and investment, especially now when our economy will be battered by COVID-19 as well
3/ South Africa has a highly regulated power system. NERSA determines the electricity tariff & approves market access through licences (>1MW for generators). NERSA can only approve generation licences if there is an allocation in the IRP electricity plan or the Minister agrees
Read 12 tweets
19 Feb
1/ President @CyrilRamaphosa and energy Minister @GwedeMantashe1 (in his speech in parliament today) have outlined progress around 4 interventions aimed at accelerating investment in new generation capacity in South Africa. My comments in the thread below.....
2/ these are the 4 interventions:

a) ease permissions for self generation

b) procure emergency power

c) issue Sec34 determinations to implement the IRP and kickstart IPP procurements

d) allow municipalities to procure their own power

So, what progress has been made?
3/ On self generation: the Minister reported wrong data on the pipeline of applications/MWs for registration or licences. The industry says its much higher.
Minister says NERSA will decide self gen licence applications (any size >1MW) within 120 days, implying there’s no problem
Read 12 tweets
28 Nov 19
1/ Some take-aways from the 6 monthly financials reported this afternoon by South Africa’s national power utility Eskom
2/ Eskom’s net profit for the 6 months is R1.3 billion. But that doesn’t mean the utility is profitable. Higher winter tariffs skew the results and Eskom predicts another record loss of >R20 billion at year end. Dwarfs losses in all other SOEs
3/ Eskom’s revenue is up 10% despite electricity sale volumes declining 1.3%. Tariffs have increased double the rate of inflation. Eskom sells less electricity than 12 years ago. Classic utility death spiral. Can’t sell more so it hikes tariifs and consumers use even less
Read 9 tweets
13 Aug 19
1/ South Africa’s electricity planning continues to be paralyzed by vested interests. All planning models of the past decade, with the objective function of a least-cost, RELIABLE power system have never selected nuclear, but some still push it regardless dailymaverick.co.za/opinionista/20…
2/ Many who criticize Integrated Resource Planning Models don’t understand how they work. IRP models assess every hour of demand and supply over a year and select the optimal mix of supply options which result in adequate and reliable electricity supply at the least cost
3/ The objective function of IRP electricity planning models is the least cost supply mix to meet a defined reliability standard. Additional boundary conditions can be set such as meeting minimal environmental standards, and maximisation of local manufacturing and job creation
Read 7 tweets

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