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Open the electricity market for faster economic recovery

Taking back control. This is the general message from governments and companies as they tackle the hefty responsibility of structuring plans to drive a post-lockdown recovery.

Originally published in the ESI Africa weekly newsletter on 21/10/2020

In South Africa, on 16 October the government announced its Economic Reconstruction and Recovery Plan, which places energy security at the forefront to rebuild the economy post-COVID-19.

According to President Cyril Ramaphosa, the plan will facilitate the removal of unnecessary regulation, the implementation of reforms, security in our power supply, and freeing up of digital infrastructure.

It’s not the first time the president has put digital transformation on par with energy supply. There is a link here in that smart cities and smart infrastructure are critical factors within the energy revolution.

But it does start with a stable electricity supply on which smart applications rely.

Further, it’s all good and well to state that regulatory reform is part of the plan but if it does not include freeing up of the self-generation power market we will not see the necessary speed of positive economic results. 

As a concept, the self-generation market holds considerable potential for sustainable job creation – not just temporary job opportunities but lifetime careers. This market is ripe for those with an entrepreneurial disposition.

The private sector, from small businesses to large manufacturing, industrial and mining groups are ready to invest in their own clean power supply. And they are willing to sell excess power to the grid.

However, regulation is literally hampering the free flow of energy.

One area of regulation that is of interest here is wheeling frameworks. Wheeling offers generators and buyers the opportunity to enter into bilateral PPAs, using Eskom and/or municipalities’ networks to deliver the power.

This topic is up for discussion tomorrow, Thursday 22 October at 12h30 SAST, where the South African Independent Power Producers Association along with guest speakers will cover some of the more important practical aspects of wheeling from the perspective of municipalities, Eskom and users.

Eskom has a well-established methodology to handle wheeling; however, the application in municipalities is not standardised. It’s an important conversation that you should be part of as adopting wheeling frameworks is a starting point to a realistic energy solution.

Until next week.

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.