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Resolving energy challenges critical to economic recovery

President Cyril Ramaphosa says resolving the current energy challenges is fundamental to South Africa’s economic recovery.

“That is why we are making every effort to bring new power generation capacity online in the shortest possible time,” President Ramaphosa said.

In his weekly newsletter, President Ramaphosa said the country’s electricity shortages have been a problem for more than a decade. He said economic activity has been severely interrupted with power cuts affecting smaller businesses and large industries alike.

“Over the years, it has contributed to slow economic growth and weak investor confidence,” President Ramaphosa said on Monday.

A step forward in addressing electricity shortages, was the announcement last week by Mineral Resources and Energy Minister Gwede Mantashe of companies that had successfully bid to supply 2 000 megawatts of emergency power to address the gap in capacity.

“Over the course of next year, government plans to release four more requests for proposals for new power generation projects, in renewable energy, gas, coal and battery storage respectively. These projects would be expected to provide over 7 000 megawatts of electricity.

“These projects will involve an investment of around R45 billion by the private sector. Around half of all the materials used in the construction will be locally sourced,” said the President.

Power will be produced from a range of sources including solar, wind, liquefied natural gas and battery storage.

In addition, government has released a request for proposals for the procurement of a further 2 600 megawatts of renewable energy.

“Another part of the effort to fill the electricity supply gap is to make it easier for industry to generate electricity for its own use.This ‘embedded generation’ will reduce the demand on Eskom’s power stations and will increase the country’s overall generation capacity through private investment.”

The President described these new sources of electricity as vital to ensure a reliable supply of energy into the future.

“Most of the coal power stations are more than 40 years old and are prone to breakdowns. In addition, much of the necessary maintenance on these plants was neglected for many years. Eskom estimates that breakdowns consume as much as a fifth of our electricity capacity,” President Ramaphosa said.

President Ramaphosa spoke out against illegal connections, meter tampering and the illegal sale of prepaid electricity vouchers saying this makes it much harder for Eskom and municipal power utilities to improve their infrastructure and even to continue to provide electricity.

“The actions we are taking to restructure and to strengthen our electricity system will fundamentally change the country’s energy future. We are making progress. Our efforts are gathering momentum.

“We are steadily restoring Eskom to technical, operational and financial viability. We are making our electricity system more efficient and competitive. And we are making great strides in bringing new generating capacity online as quickly as possible,” the President said.

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