The South African Wind Energy Association (SAWEA) says the wind industry supports government’s plans to reconsider how energy is supplied in South Africa, so that the electricity generation system can evolve and adapt to fit the country’s rising energy demand.
However, it asserts that the implementation of the Integrated Resources Plan 2019 should remain an imperative to ensure sufficient lead time for procurement processes and to support stable and consistent growth as laid out by the energy roadmap.
SAWEA’s comments are in response to a media report stating that the ruling African National Congress endorses a market-friendly approach to South Africa’s constrained energy supply, which includes allowing municipalities to procure their own energy, expanding the independent power producer (IPP) programme and freeing up regulations around self-generation by businesses.
“To shift away from a centralised monopoly to a more efficient decentralised generation model will increase competition and drive down energy prices. This will ultimately stimulate the economy and support the growth that South Africa is seeking, in line with a global shift away from large centralised utilities,” says SAWEA CEO Ntombifuthi Ntuli.
She emphasises, however, that the focus needs to remain on implementing the country’s latest IRP to address the short- and long-term electricity supply capacity constraints and to ensure sustainable economic growth.
With private sector participation in the energy generation business, where municipalities and large-scale private power users can buy power directly from IPPs, the benefit of introducing competition into the electricity generation market should naturally result in lower prices, while also increasing generation capacity, SAWEA posits.
“We need the market to be opened for private power producers to be able to supply electricity to the national electricity system. Private renewable energy producers can supply electricity to intensive users at a rate of 25% less than Eskom’s mega-flex tariffs, this includes municipalities,” concluded Ntuli.