A new Minister of Electricity will be appointed by President Cyril Ramaphosa to help the Presidency organise the response to the electricity crisis, which is now formally recognised as a “national calamity” with immediate effect.
The president admitted that the nation was “in the throes of a catastrophic energy crisis” that was jeopardising social stability and food security in his seventh State of the Nation Address on February 9, which was first disrupted by the Economic Freedom Fighters.
“We are therefore declaring a national state of disaster to respond to the electricity crisis and its effects,” Ramaphosa said, announcing that a Gazette classifying the severe electricity supply constraint a national disaster had been published by the Department of Co-operative Governance prior to his speech.
“To deal more effectively and urgently with the challenges that confront us, I will appoint a Minister of Electricity in The Presidency to assume full responsibility for overseeing all aspects of the electricity crisis response.”
The Energy Action Plan, which was launched in July of last year, and its immediate implementation would be the Minister’s full-time priorities.
“To deal more effectively and urgently with the challenges that confront us, I will appoint a Minister of Electricity in the Presidency to assume full responsibility for overseeing all aspects of the electricity crisis response, including the work of the National Energy Crisis Committee.”
Ramaphosa said the Auditor-General would be appointed to ensure “continuous monitoring of expenditure in order to guard against any abuses of funds needed to attend to this disaster” in response to indirect criticism that designating the electricity crisis as a national disaster could facilitate procurement corruption similar to that which was encountered during the Covid lockdowns.
The President explained the justification for declaring a state of disaster, stating that it would allow the government to put into action the necessary practical measures to aid businesses in the food production, storage, and retail supply chain, including the deployment of generators, solar panels, and an uninterrupted power supply.
“Where technically possible, it will enable us to exempt critical infrastructure such as hospitals and water treatment plants from load shedding.
“And it will enable us to accelerate energy projects and limit regulatory requirements while maintaining rigorous environmental protections, procurement principles and technical standards.”
In response, Eskom stated that before making any more comments, it will carefully review the information in the Government Gazette to comprehend the ramifications of the disclosure. Additionally, it made no mention of the proposal to name an electricity minister.
Despite reports that the African National Congress (ANC) had decided to transfer control of State-owned enterprises (SOEs) to their line departments in an unofficially published National Executive Committee resolution, Ramaphosa used his speech to clarify that the Public Enterprises Minister would continue to be responsible for shareholder matters regarding Eskom.
“So as to remove any confusion, the Minister of Public Enterprises will remain the shareholder representative of Eskom and steer the restructuring of Eskom, ensure the establishment of the transmission company, oversee the implementation of the just energy transition programme, and oversee the establishment of the SOE Holding Company.”
The President’s announcement that the National Transmission Company South Africa (NTCSA) will soon be operating with an independent board served as further affirmation of the reform of Eskom.
In order to level the playing field for municipal and private generators and to ensure that the grid receives enough investment—which is now a major barrier to investment, particularly in the Cape provinces—the NTCSA must be separated from Eskom generation and distribution.
In keeping with the National Energy Plan he released in July of last year, Ramaphosa did not disclose any new ideas to address load shedding.
However, he announced that Finance Minister Enoch Godongwana would use his Budget to outline how households would be assisted in buying solar systems and how businesses could benefit from a tax incentive.
“National Treasury is working on adjustments to the bounce-back loan scheme to help small businesses invest in solar equipment, and to allow banks and development finance institutions to borrow directly from the scheme to facilitate the leasing of solar panels to their customers.”
Additionally, it was confirmed that Eskom had been given the go-ahead to purchase emergency power “that can be deployed within six months to close the immediate gap.”
Although the State-owned utility has not yet disclosed specifics of the procurement, there are worries that this initiative will make it easier for power-ships to enter on a long-term basis.