The South Africa Government is encouraging new deals with private investors to start their power plants with a limit of 100 megawatts power generation capacity. The country has been struggling with frequent power cuts; the recent move should help solve the problem.
The country faced challenges due to insufficient power supply affecting industrialization from 2005; therefore, the government built 1 megawatt to have an uninterrupted power supply. The Eskom Holdings SOC Ltd. cannot provide the country with adequate electricity, mainly as the power plant is old and not properly working.
President Cyril Ramaphosa commented that they aim to have energy security even though it has economic risk involved.
Although approvals for the project to connect to the grid are still in progress, they will obtain licenses faster. They will allow new companies to supply through the transmission network after Eskom and municipal authorities concur to the move.
The country plans to utilize different sources and contract independent producers to scale the power supply efficiently to the national grid.
The Congress of South African Trade Unions and Business Unity South Africa assured that the new amendment would improve job opportunities and promote the economy. As the new contractors might take some time to supply power, the present supplier Eskom which provides electricity for 90% of the country, has requested increased self-generation.
Power-intensive industries urge for higher cap; Mineral Resources and Energy Minister Gwede Mantashe proposed increasing to 10 megawatts.
As per S&P Global Market Intelligence, the previous year saw a dip in four years in Mining companies’ exploration budgets that fell 10%.
Alex Khumalo, head of social performance at the Minerals Council, South Africa, expressed that the aftermath of Covid smashed the mining value chain and exploration.
Errol Smart, CEO of Orion Minerals, said that nearly 30 projects cut around $20 million worth of exploration expenditure in the last year.
A report states that nearly 600 million Africans still suffer due to a lack of power supply. The growth in demand is rapid; therefore, the government needs to take swift measures that build a robust energy supply system keeping the climate crisis in mind. An IEA estimates a minimum of 95% in Sub- Saharan and nearly 1.5 billion Africans will continue using traditional bioenergy for needs despite increased GDP.