Minister in the Presidency Jackson Mthembu
While Cabinet considered the much-anticipated update to South Africa’s Integrated Resource Plan (IRP) for electricity at its meeting on Wednesday, Minister in The Presidency Jackson Mthembu said discussions had not yet been concluded.
Mthembu attributed the extension of Cabinet-level deliberations on the IRP largely to the importance of the document, but insisted that they would be concluded “soon”.
He refused, however, to offer a timeframe for its eventual approval.
Mineral Resources and Energy Minister Gwede Mantashe said on Friday that he was anxious for the document to be promulgated, as it would open the way for the procurement of new generation capacity.
South Africa is once again facing supply shortages, largely owing to the underperformance of the existing Eskom coal fleet and delays to the introduction of new capacity from Medupi and Kusile. Those units that have been introduced have also been performing below design specifications.
The IRP has not been updated since the IRP2010 was officially approved as the country’s generation roadmap in early 2011, despite two previous attempts to do so.
A draft update was published for public comment in August 2018 and, following a national road show, the then Department of Energy (DoE) received thousands of written and oral comments on the plan.
Parliament’s Portfolio Committee on Energy also hosted hearings on the IRP, which was subsequently updated by the DoE ahead of yet further consultation by the government, business, labour and community constituencies represented at the National Economic Development and Labour Council (Nedlac).
A protracted Nedlac process, which began in early 2019, then ensued, with labour and community representatives reportedly raising concerns over the exclusion of new nuclear, as well as the diminishing role of coal in the IRP.
Mthembu also confirmed that the paper on Eskom’s restructuring, which was being prepared by Public Enterprises Minister Pravin Gordhan, had not yet served before Cabinet.
The Eskom document is expected to outline government’s approach to the restructuring of the State-owned company’s debt, as well as its future structure in light of President Cyril Ramaphosa’s announcement that the vertically integrated utility would be broken into three separate businesses of generation, transmission and distribution.
CABINET MEETS ON MBOWENI’S PAPER
Mthembu drew a direct link between the Eskom paper and ongoing Cabinet deliberations with regard to Finance Minister Tito Mboweni’s recently released paper, titled ‘Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa’.
A special Cabinet meeting, which included Deputy Ministers, was held on Thursday to debate the document, which has drawn criticism from within the African National Congress-led alliance, but which has been broadly welcomed by the private sector.
Following the release of the paper for public comment in August, the National Treasury had received over 700 responses.
The comments, Mthembu said, had been consolidated ahead of the special Cabinet meeting, convened for the sole purpose of discussing ways to reignite growth in the economy.
He said that, although the Eskom paper would be considered independently, it should be read together as a package with the eventual economic strategy, given its likely impact on government finances and the economy more broadly.
It was premature, however, to indicate what the economic strategy would look like and what form it would take, Mthembu said, in response to a question as to whether economic strategy would be published as official policy.
“Good progress is being made … and we believe we have made some strides in relation to crafting something that we can call an economic strategy for our country.”