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Collaborative Solutions for South Africa’s Energy Crisis

“In South Africa, the first step in the right direction is the liberalisation of energy generation. However, we must also be bold enough to consider an open market system, allowing the private sector to play a more substantial role.” – Alwie Lester

During our recent thought leadership engagement, we had the privilege of hosting Alwie Lester, Special Advisor on Energy for the Western Cape Government. With his distinguished track record in South Africa’s energy industry, Alwie set the stage for an interactive and thought-provoking discussion on the current energy crisis.

Edward Belstead, Managing Partner at KMPG Cape Town and our host and sponsor, soberly reminded us that the situation may intensify before it improves. Keeping the lights on remains our paramount economic challenge.

While load shedding is not a new issue, its increased intensity directly corresponds to a more significant impact. In 2022, we experienced load shedding for 43% of the year (averaging levels 2-4). This year, however, we’ve seen an average of levels 4-6, with only one load-shedding-free day in the first eight months. Alwie underscored the importance of not becoming desensitised to load shedding, emphasising the dire consequences, such as the loss of 100,000 jobs in 2022.

Of major concern is the current energy availability factor (EAF) at 56.78%, with an annual average of 54.53% and a 2022 average of 58%. The required EAF for the stability of the current network grid is between 70% and 75%. The most pressing need is for increased energy generation, with municipalities playing a pivotal role in addressing this challenge.

The market is swiftly transitioning from consumers to prosumers, and Alwie emphasised the necessity of proactive measures in tackling the energy crisis. This involves dismantling barriers and opening up networks, models of which exist internationally.

In South Africa, the first step in the right direction is the liberalisation of energy generation. However, Alwie stressed that we must also be bold enough to consider an open market system, allowing the private sector to play a more substantial role.

While there’s no quick fix, Alwie shared some local initiatives to provide relief for businesses and citizens, particularly in vulnerable communities:

  • Load Shedding Relief Pack: Providing solar-charged lighting and charging facilities for mobile devices to 440,000 recipients, with a priority focus on matric students ahead of final examinations.
  • School Programme: Currently implemented in 46 schools with energy-efficient geysers and lighting, scaling to 100 schools. Phase 2 aims to provide solar to these same schools, with the goal of adding an additional 100 new schools per year.
  • Health Facilities: Implementing solar and energy efficiency measures in hospitals and clinics throughout the province.
  • Provincial IRP (Integrated Resource Plan): Assessing future energy needs and developing a plan to meet those needs from now until 2050, considering supply, demand, costs, and evolving technology.
  • New Energy Generation Plan: Implementing a distributed generation model for greater resilience, with multiple plants generating 100MW each.
  • Municipalities: Focusing on funding and the exchange of resources, skills, and knowledge.

Additionally, attention is given to developing robust transmission and distribution networks to ensure seamless and safe power delivery. The province aims to generate 5700MW by 2025, with a medium to long-term goal of reducing reliance on Eskom through an 80/20 split with 80% independent generation.

Alwie stressed the need for a shift in consumer behaviour, akin to the response to the Western Cape drought a few years ago. Energy conservation should become second nature, from turning off lights when not in use to boiling only the necessary amount of water.

In conclusion, Ryan Ravens, CEO of Accelerate Cape Town, emphasised that this problem cannot be solved by any single person or entity. Public and private enterprises must collaborate on both national and regional levels to be effective in this crisis.

We extend our gratitude to our speakers, sponsors, and members for your unwavering support. We eagerly anticipate further thought leadership discussions. Together, we are committed to finding solutions towards our collective goal of building a thriving economy and sustainable future.

Click to access Alwie’s Presentation, Western Cape Energy Resilience Programme

 

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