What A Revolution In SA's Electricity Landscape Can Do For The Economy

Load shedding costs the economy billions every year. Regulatory red tape is holding back a potential boom in the market for privately generated renewable energy, which has the potential to not only solve local power shortages, but also to attract substantial investments and create thousands of jobs.

- Mariam Isa

Commercial companies, factories and farms in South Africa are fighting for the right to generate their own electricity to keep operating during the rolling blackouts that are threatening their businesses, delaying expansion plans and in some cases forcing them to cut back.

Small-scale embedded generation (SSEG) systems, mainly solar photovoltaic (PV) installations, have already sprung up across the country as companies take steps to ensure stability of power supply and mitigate the prohibitive cost of electricity prices, which have climbed by nearly 400% in the past decade.

But pent-up demand for many more private renewable projects – which would quickly help to address the power shortages hobbling the economy – are being stymmied by red tape and regulations which are both onerous and outdated. The constraints are unlikely to ease quickly amid conflicting interests within government, the National Energy Regulator of SA (Nersa) and Eskom.

“We’re now in a position where we sit watching the unfolding crisis at Eskom and are very aware of the fact that there is a very unclear plan about how that’s going to be resolved and who is going to pay for it,” says Mike Levington, chair of the Green Economy subcommittee at the South African Photovoltaic Industry Association (SAPVIA).

“What business is starting to say is that ‘I now have to take responsibility for my electricity supply’. They are seeing that embedded generation is a way in which they can have some control over the operating cost of their business going forward.”

SAPVIA’s programme director, Niveshen Govender, says the industry body has identified 880MW of capacity which could immediately come online from SSEG projects which have already been built by the private sector but are standing idle in the face of the regulatory gridlock.