On opening up the market for alternative power generation producers

1. On opening up the market for alternative power generation producers: 

Honourable Speaker,

As government, we have created a regulatory environment that is conducive to opening up of the market for alternative power generation producers. 

Within the framework of the Integrated Resource Plan, alternative energy generation measures are being explored and implemented to augment electricity supply and improve the stability of the grid. 

In addition, the President announced the amendment of Schedule 2 of the Electricity Regulations Act 4 of 2006 by increasing the Embedded Generation threshold from 1MW to 100MW. 

In this regard, the Department of Mineral Resources and Energy has amended the Electricity Regulations of New Generation Capacity and has put together processes to be followed to ensure requests by municipalities for own generation are speedily attended to. 

Currently, 292 small-scale generators have registered with NERSA and have generation capacity of 187MW. The Independent Power Producers Office is processing offers by Independent Power Producers for approval by Eskom and National Treasury. 

Furthermore, the Minister of Mineral Resources and Energy has issued Determinations on the required new generation capacity, in concurrence with the National Energy Regulator of South Africa.  

The Determinations made, resulted in the procurement of more than 7 309 MW from renewable and non-renewable energy. Most of these power plants are already in operation, with less than 400MW still under construction. 

We can report the following achievements to the House: 

• Preferred Bidders for 2 600 MW of renewable energy, known as Bid-Window 5, were announced in 2021 with Financial Close planned for April 2022.
• The Request for Proposal for 2 600 MW of renewable energy under Bid-Window 6, is scheduled for release end March 2022. 
• Request for Proposal for 513 MW of battery storage, is scheduled for release by end April 2022.
• Request for Proposal for 1 600 MW of renewable energy under Bid-Window 7, will be issued by end August 2022. 

We must make the point that Eskom’s load shedding is not as a result of limited market role for alternative power generation, but mainly a result of breakdowns encountered from the old and aging power generation infrastructure. 

The Eskom Political Task Team continues to provide political leadership support to ensure that Eskom meets its obligation of providing electricity. 

This support includes ensuring that Eskom, in the short term, is able to implement a credible and transparent national maintenance programme to ensure that power generation plants operate at optimal levels to reduce negative impacts of electricity supply disruptions. 

Collectively, these measures are aimed at addressing the current load shedding and future power generation needs.  

Thank you! 


2. On consultations with Traditional and Khoi-San leaders:

Honourable Speaker,

Indeed, on 10 March 2022, we consulted the Traditional and Khoi-San Leaders on progress made in the fight against the ongoing Covid-19 pandemic. 

We communicated the intention of government to lift the National State of Disaster as advised by the National Coronavirus Command Council, including calling on each sector to develop its own sector plan to continue fighting the spread of Covid-19. 

The Traditional and Khoi-San Leaders expressed support for the work done by government in the implementation of the Covid-19 Risk Adjusted Strategy. The leaders encouraged government to fast-track the finalisation of Amendments to Health Regulations towards ending the National State of Disaster. 

The leaders further committed to continue in partnering with government on the path of advancing efforts on communities vaccinating against the Covid-19 pandemic, in the spirit of saving lives and livelihoods. 

In accelerating our vaccination programme, we have consistently ensured that we also consult with inter-faith leaders to solicit their inputs, and access places of worship to promote vaccination. 

In our view, these consultations, which are not only with the Traditional and with Khoi-San leaders, have reaffirmed South Africa’s strength of working in partnership with various social partners for the common good. 

The success we have achieved in bringing down Covid-19 infections, hospitalisation, and deaths is due to strong partnerships with various social formations and communities.  

We would like to take this opportunity to thank the private sector, organised labour, civil society, sport federations, athletes, artists and cultural workers, as well as all our vaccination ambassadors who gave time and resources to partner with government in the fight against the coronavirus pandemic. 

Thank you!


3. On government’s just transition plans:

Honourable Speaker,

Our energy generation is guided by the Integrated Resource Plan 2019, which provides for the use of all energy resources available in the country. This includes, amongst others, coal, gas and renewable energy sources. 

Currently, there are no plans for the discontinuation of the use of coal as 99 percent of South Africa’s electricity supply is derived from coal and 30 percent of liquid fuels are derived from the same commodity. Coal remains one of our largest natural endowments that will continue to form part of our energy mix in terms of the IRP 2019. 

Notwithstanding this fact, our country is committed to forging a low-carbon growth path that prioritises environmental sustainability, in line with our constitutional and international obligations. We need to ensure that we deploy new infrastructure, technologies and solutions that enable us to adhere to ambient air quality standards, and protect the lives of communities from negative environmental externalities. 

Going forward, the IRP 2019 proposes the use of high efficiency, low emissions coal technologies. Government is currently working on other measures such as the Gas Utilisation Master Plan and the Renewable Energy Master Plan. 

We are exploring the development of the Nuclear Procurement Framework as proposed in the IRP 2019. All of these are part of the medium to long-term plans in ensuring security of energy supply. 

Having said that, it is important to point out that, out of the entire fleet there are planned optimised plant shutdowns that is aligned with the Integrated Resource Plan, to balance capacity, environmental, social and economic considerations. 

This is inevitable because, in the main, these plants are approaching the end of their lifespan, and have become uneconomical, unpredictable and costly to run. 

Nine coal-fired power stations will be shut down by 2035, thereby impacting significantly on the reduction of generation capacity.

From a power generation perspective, there is an immediate priority to address the issue of generation capacity losses resulting from the planned decommissioning of power stations. 

Of course, the decommissioning of the existing coal-fired plants, will drive the demand for new capacity. As coal-fired units and stations are shut down, it is essential that new capacity is added to the grid, to ensure energy security. 

Overall, the country has a 4 000 to 6 000 MW need that must be built per year. 

In addition, the Department of Mineral Resources and Energy has tabled a plan for an additional 8 000 MW clean energy projects to be added to the grid over the next 2 to 5 years. This is a combination of greenfield renewables and gas projects, as well as repowering its existing coal sites, as the coal plant shuts down. 

The costs for renewable energy technologies continue to decline as compared to when we started with Bid Window 1, and this will add generation capacity sooner and thus reducing the risk of load shedding. 

For example, solar photovoltaic projects now take between 18-24 months to complete, wind projects have a lead-time of between 24 and 36 months, and gas requires 24 to 60 months to complete.
  
Our current focus on the implementation of the Just Energy Transition, is Komati Power Station as the first coal-fired power station to be repurposed. 

It will be repowered in the next 12 to 18 months, using solar photovoltaic plant supported by 244MWh battery storage. 

Komati is ideally positioned to be a flagship Just Energy Transition project to act as a ‘proof of concept’ for subsequent projects at Grootvlei, Hendrina and Camden Power stations. These power stations are all scheduled for retirement by 2025. 

Clearly, the socio-economic impact will be dire if nothing is done to implement Just Energy Transition Plans that will repower and repurpose these plants to sustain local economic development activities and job creation in areas affected by the shutdowns.  

We need to state upfront that any just transition that government undertakes, must be done sensibly and in the best interest of South Africa’s economy.  

As part of the energy transition process, studies were conducted on the impact of plant shutdowns on the communities where Eskom has power plants. 

Studies based on the Integrated Resource Plan programme, demonstrate that 300 000 net direct, indirect, and induced jobs could be created over the next decade by investing in the clean energy programme as described in the IRP 2019. 

The studies have also looked into mining projects with specific attention to the repurposing of old mines, infrastructure and mine water, as well as the rehabilitation of mining land or property for farming opportunities. 

A significant element of Eskom’s Just Energy Transition strategy is to ensure that efforts, initiatives and projects, are aimed towards safeguarding impacted and affected communities as far as it is possible when a coal plant is shut down. 

The repurposing and repowering of the stations to be shutdown will also involve reskilling and upskilling of staff and communities to match and align their skills with new opportunities offered by emerging sectors, especially in renewable energy sector value chains.  

Our approach to the renewable energy sector must not only focus on energy generation, but must also have at its centre  the goal to stimulate local manufacturing and re-industrialisation in partnership with other industries and government, especially in the communities where the shutdowns are planned.  

It must be a programme that contributes to the re-industrialisation and stimulation of South African manufacturing sector through localisation of the supply chains of components, technology and equipment whilst impacting on the development of black and women industrialists.  

Honourable Speaker,

Without grid development, new generation capacity development is moot. The development of the transmission grid in the Northern and Eastern Cape Provinces is paramount to the addition of new generation capacity. 

In aligning these plans to the expansion of the country’s generation capacity, Eskom has tabled a transmission development plan for this purpose, which indicates that 8000 km of line must be built in the next 10 years. 

This project will require significant financing, which Eskom has tabled as part of the Just Energy Transition financing and regulatory support to acquire land and servitudes. 

In the final policy-adjusted scenario, the costs that come with the transition should not be ignored, especially in the context of a fiscally constrained environment. 

The speed at which we will be able to move, will be determined by the scope, scale and availability of resources. Due diligence will be taken to manage the just energy transition financing modalities in a responsible manner that does not collapse the economy, and burden the fiscus with unsustainable debt obligations. 

It is our conviction that our undivided focus on the implementation of our just energy transition and the completion of restructuring of Eskom, will in future deliver energy supply security and a much needed reprieve from the negative impact of load shedding. 

Thank you!


4.  Addressing concerns raised by Military Veterans:

Honourable Speaker,

The President established the Presidential Task Team on Military Veterans in order to ensure that amongst others, there is urgent and continuous engagement with the community of military veterans in order to resolve their grievances. 

The Presidential Task Team has since November 2020 held extensive consultations with different Military Veterans’ Associations.  

Flowing from these consultations, it became evident that a multi-faceted approach that brings different spheres of government to collaborate in accelerating the delivery of benefits to military veterans was necessary. This would ensure that we sufficiently address the grievances of military veterans. 

In advancing this holistic and integrated approach, the workstreams drawn from a cross-section of government departments and provinces are seized with the tasks of resolving issues that have been raised by military veterans. 

Among other key issues, this work covers the improvement of socio-economic conditions, such as education, housing and employment, institutional support, heritage, the legislative review as well as pension and benefits of military veterans. 

As reported by the President to Parliament on the 25th of November 2021, significant progress has been made by respective technical workstreams designated to focus on specific challenges. 

More specifically, the Pension and Benefits Workstream, is currently finalising the pension policy that considers inadequacies that have been identified in the Military Pensions Act 84 of 1976. 

In addition, discussions between the Department of Military Veterans and the National Treasury about the provisioning of military pension, as provided for by current legislation are at an advanced stage. 

The draft Actuarial Report, which is required to support the proposed changes to the Pension Policy, will soon be presented to the Executive Authorities for consideration. 

In relation to the proposed Military Veterans’ Amendment Bill, the Minister of Defense and Military Veterans has taken an approach that emphasises the importance of an extensive definition of a military veteran, the qualifying criteria for beneficiaries, and the role and existence of the South African National Military Veterans Association as a body that manages the affairs of military veterans. 

The Department of Military Veterans is currently in a process of ensuring that all inputs of stakeholders are incorporated into the Bill. 

Furthermore, as of March this year, the department has also started working with the Government Technical Advisory Centre in preparation for the costing of the implementation of the Bill. 

Once all required processes like the Socio-Economic Impact Assessment System Report and certification by the Office of the Chief State Law Adviser are complete, the Bill will then be presented to the Cabinet system for approval to solicit public comments by the 3rd quarter of the 2022/2023 financial year. 

Thank you!


5.Promoting the values of ethical leadership, good governance and accountability in local government: 

Honourable Speaker, 

We reiterate that Moral Regeneration Movement remains a critical platform to galvanise our society to advance the promotion of positive values and ethical conduct. 

These positive values empower us to confront deep-seated challenges of moral decay within our communities, including in our public service. 

This outlook is further underscored by the Auditor-General when announcing the Municipal Audit Outcomes of the 2019/20 financial year. 

In that announcement, the Auditor-General pointed out that provincial leadership needs to work together with municipalities and focus on ensuring that political leadership sets the tone of ethical and courageous leadership, service-orientation, good governance and accountability. 

We therefore support the Auditor-General’s call by encouraging Members of Parliament, Members of Provincial Legislature, Municipal Councillors to drive the desired change, especially in the local sphere of our government. 

This call extends to political and administrative leadership in the executive branch, to effectively play its part in ensuring accountability in government spending, and to inculcate a culture of ethical and accountable leadership in service of the people. 

To this end, the National School of Government has since introduced a training programme that will equip public officials including Municipal Councillors, with the required skills and competencies to make ethical decisions.

The programme is also aimed at equipping these officials to develop organisational integrity, prevent fraud, and combat corruption in the Public Sector. 

This is in line with the ongoing work of the Moral Regeneration Movement to implement its Ethical Leadership Programme for public office-bearers, which includes the induction of newly elected Municipal Councilors.

To further augment the work of the Moral Regeneration Movement, the Department of Cooperative Governance and Traditional Affairs in partnership with South African Local Government Association is implementing a project on ethical leadership in municipalities, which is called Local Government Ethical Leadership Initiative.  

The aim of the project is to develop a Code for Ethical Governance for municipalities, which will have a similar standing as the King Code on Corporate Governance in the private sector. 

This is in line with one of the focus areas of the Local Government Anti-Corruption Strategy calling for a national dialogue on ethical leadership in local government. This project is on-going and is aimed at producing a Code of Ethical Governance for Municipalities. 

The Moral Regeneration Movement will continue to engage local and district municipalities to incorporate their Anti-corruption strategies into the Integrated Development Plans for implementation, and sustainability support. 

Thank you!


6. Enhancing the vaccination roll-out to reach population immunity:

Honourable Speaker,

As of the 28 March 2022, we have administered 33.5 million Covid-19 vaccines to 20.9 million individuals including 19.35 million adults and 1.55 million children aged 12 to 17 years. 

This translates to 48.6 percent of adults having received at least one dose of Covid-19 vaccine. 

The coverage is not equal across all age cohorts with more than 68 percent of people 60 years of age having been vaccinated, compared with only 35 percent in those between 18 and 34 years. 

Of course, whilst reaching unvaccinated older people and providing ongoing protection to this group through provision of booster doses remain a priority, increasing coverage in younger cohorts especially in 18 to 34 years old, is also key to increase coverage at the population level. 

This strategy, which is, protecting those most vulnerable and increasing overall population coverage, is important if the effects of any future waves are to be mitigated especially given the easing of restrictions as announced by the President on 22 March 2022. 

It is critical that more people are vaccinated in order to reduce the number of infections, especially the number of hospitalisations and deaths associated with Covid-19 infections. This will also help a great deal to reduce the impact of any future waves. 

Honourable Speaker,

Poor demand for and uptake of vaccination remains the largest barrier to increasing vaccination coverage. However, we are encouraged by efforts of a number of sectors of society that have implemented policies and programmes, aimed at increasing demand for and access to vaccination. 

Moreover, surveys as indicated by CSIR have shown that many unvaccinated South Africans are not opposed to vaccination, and are willing to be vaccinated. 

In this regard, we are addressing identified structural barriers like bringing vaccination sites closer to the people in order to address costs of getting to and from vaccination sites for those wanting to vaccinate. 

We do hope that more people will step forward and vaccinate so that we move towards full normalcy, and open the economy to reverse the losses caused by the impact of the coronavirus. 

On the issues of workplace vaccine mandates, workplaces, especially those with large numbers of employees, have actively played a role in providing vaccination to employees as well as in encouraging workers to vaccinate. 

We will continue to encourage employers to develop and implement policies that promote the uptake of vaccination within workplaces. 

The regulations recently published by the Minister of Cooperative Governance and Traditional Affairs provide an over-arching framework that guides various sectors to promote vaccination as part of incentives to participate in specific gatherings and sporting activities.

All these protocols are intended to persuade people to vaccinate in order to contain the spread of Covid-19 infections.  

Thank you!