President Cyril Ramaphosa surprised the country when he announced that the private sector would be allowed to generate up to 100MW electricity from renewable sources without having to apply for a generation license from energy regulator Nersa.
By all accounts, he seems to have surprised many in his party too, especially with Mineral Resources and Energy Minister Gwede Mantashe admitting his arm needed to be twisted to endorse this move.
The immediate question is: what does this mean for load shedding and our insecure energy grid? The move is a good one, and it should be welcomed. Long term it certainly will make a difference – it will have a positive impact not only on the shortfall in our grid, especially during peak hours, but it will slowly shift the scales away from the current reliance on coal.
100MW could, in theory, power up to about 100,000 houses. Fifty of those installations would generate the equivalent of powering up to 5-million houses. But, before we set lofty goals about fifty 100MW installations, let’s look at the other side of the coin.
In the short term, Ramaphosa’s announcement will have no impact on our load shedding woes. That’s the unfortunate truth. Let’s assume the private sector, which is said to have access to enough capital, rushes and applies to build renewable power installations. A smaller installation, let’s say anywhere up to 10MW, could take up to half a year to complete – and that is after the approvals. Large, 100MW installations currently take up to two years to complete.
The announcement should be Gazetted by the middle of August, after which it will undergo a 30-day public consultation. Once these wheels have turned, it will come down to individual environmental impact assessments and the amount of red tape private businesses will need to navigate with Nersa.
The long and short of it is that the announcement is one of the best pieces of news to emerge in the South African energy sector in some time. Besides being better for the environment, renewable energy technology is becoming cheaper and is commercially viable.
All renewable energy sources need energy storage, and this is where companies like Revov join the discussion. If ever there was an opportunity for this continent to be instrumental in driving the circular economy, it is now. 2nd LiFe batteries not only reduce the burden on the environment, but they are also fit for purpose for stationary storage.
And while we applaud the president for his progressive move, we appeal to South Africans not to get their hopes too high about load shedding suddenly being ended. This process will take a few years, but if it is run properly and if the private sector comes to the party, not only will the energy grid benefit, but small and large businesses will finally get some breathing room instead of being throttled by insecure power supply.