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Floundering Eskom is hurting the economy by standing in the way of economical renewable electricity generation

3rd May 2019

By: Martin Creamer

Creamer Media Editor

     

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State electricity utility Eskom is living on the edge, yet it has the audacity to keep renewable-energy aspirants on an even narrower edge with the help of the National Electricity Regulator of South Africa (Nersa).

As a utility that can no longer offer energy security, it should see getting out of the way of those who can provide their own power as being in the national interest. Instead, it is exercising monopolistic power to stand in the way of those wanting to generate not only much cheaper electricity but also infinitely cleaner electricity.

This is South Africa shooting itself in the foot. The country has better solar and wind resources than just about any other country on earth and South Africa should be going flat out repositioning itself as the investment destination of choice for all electricity- intensive businesses.

Instead, those mining companies encouraged by renewable- energy providers and hurt by load-shedding are not allowed to progress with any meaningful megawattage.

It is estimated that 2 000 MW-plus is on offer from renewable- energy providers and the opening of the market is essential.

South Africa, which has failed to expand by more than 2% a year since 2013, can only pick up the pace once domestic constraints are removed.

While much is made of Eskom’s poor financial position, it should be far better acknowledged that the utility’s load-shedding and high tariffs are also forcing mining companies into poor financial positions.

New project developers wanting to put themselves on an energy- secure footing from the outset are being stunned into inaction by the imposition of exceedingly high transmission charges.

The Northern Cape has hot sun and prime wind, but what is the use of that if Eskom and Nersa make progress impossible? Regulations are forcing continued pollution and ever-rising power tariffs with the one hand and then having the cheek to charge carbon tax with the other.

Although South African Reserve Bank estimates point to another 125 000 jobs being potentially lost through more load-shedding and forfeited investment, ears continue to be shut to the benefits of renewable energy.

Surely the global trend towards the electrification of just about everything is obvious, as is the global demand for decarbonisation.

Those who cause any delay in allowing renewable-energy projects from going ahead are foolish in the extreme.

The sun and wind can be our new workhorses. The steep decline in the cost of solar and wind can recreate this country’s stunted minerals-energy complex.

For South Africa, which is trying to reindustrialise and transform, renewable power represents a wonderful opportunity.

Financial institutions are committed to funding sun and wind projects. South African mining companies in particular should offer the strongest lobbying to those disallowing the generation of energy that is cheaper and cleaner.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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