IPPs: Mabuza pandering to the loony left

3 March 2020

Deputy President David Mabuza’s comments in the National Council of Provinces today that Independent Power Producers (IPPs) don’t make any difference to South Africa’s electricity security, demonstrates a woeful ignorance of the role these generation entities play in shoring up the failure of Eskom.

What makes this statement worse, is that it comes during the height of Africa Energy Week and the Africa Energy Indaba, at which the Department of Energy is promoting the roll-out of IPPs.

According to the March 2019 Independent Power Producers Procurement Programme Quarterly Report, at that time 3976 MW of electricity generation capacity from 64 IPP projects had been connected to the national grid. That is the equivalent of staving off 4 stages of loadshedding.  The same report goes on to point out that:

Installed and operational capacity of the 64 IPPs is the equivalent of 83% of the capacity of the Medupi power station at full capacity;

As at March 2019, 100% of IPPs scheduled to be operational have commenced commercial operations; and

The average lead time for these 64 projects to complete construction was 1.9 years.

Mabuza is pandering to the loony left in dismissing Independent Power Producers as irrelevant.

Only today, the country’s economic decline was confirmed.

Much of the problem can be attributed to the lack of electricity. Businesses are closing their doors because they do not have a guaranteed supply of electricity, and mining companies are retrenching and disinvesting for the same reason.

The reality is that these IPPs are keeping the lights on. They are the only hope in the short term of alleviating the burden on a dying Eskom. They are the only solution that can be brought on line quickly, using external capital rather than incurring more debt within Eskom or the national fiscus.

Mabuza needs to reevaluate his role as chair of the Eskom War Room, which was initially established to “deal with any challenges to our energy supply in the country”, according to the cabinet minutes of 13 December 2019, when South Africa was at the height of stage 6 rolling blackouts.

It appears that now that the pressure has eased slightly, Mabuza is less committed to solving our energy crisis, and more enamored of propping up Eskom at any cost.

President Ramaphosa needs to demonstrate to South Africa that he calls the shots. He needs to pull Mabuza into line, or get rid of him.

South Africa cannot afford more disruption to its power supply or its economy, and Mabuza’s comments are indicative of a government that is firmly committed to a path that leads to both.

If Ramaphosa fails to do so, he will basically be admitting that it is Mabuza who sets government policy.

The Democratic Alliance (DA) has tabled legislation (the Independent Electricity Market Operator Bill) to open up the electricity supply market, and allow IPPs to compete on a level playing field with Eskom.

This aligns with both the Integrated Resource Plan and the needs of South Africa.

We need to give power to the people now!

Issued by Kevin Mileham,DA Shadow Minister of Mineral Resources and Energy, 3 March 2020