EPaper

SIGNPOST

Too many regulations, slow bureaucracy and lack of co-ordination are serious obstacles to easy solutions

Mike Teke and Peter Venn ● Teke is CEO of Seriti Resources and Venn is CEO of Seriti Green

Mike Teke and Peter Venn: All levels of government can support private sector in ending energy crisis

Resolving SA’s electricity challenges requires a careful balance of three imperatives — ensuring the country’s energy security, affordability and sustainability, the latter of which includes both the pathway to net zero and the just energy transition. While this is a complex set of tasks, there are developments that, with simple policy contributions from the various levels of the government, could drive a kick-start in reaching a quick resolution. These are steps that would take us towards the fulfilment of each of these three imperatives.

Seriti Green has just announced plans to construct a 155MW wind energy facility in Mpumalanga as part of the first phase of a larger 900MW renewable energy cluster. This project is just one of a number of private sector initiatives that could quickly solve the country’s loadshedding crisis and simultaneously take us towards meeting our international decarbonisation undertakings timeously.

To speed up such projects requires simple steps by different levels of the government to remove unnecessary regulatory obstacles to renewable power facility construction and the introduction of simple incentives that, far from costing the fiscus, will benefit it by eliminating the drag on economic activity that load-shedding has wrought.

In recent days the City of Cape Town has shown the way when it announced that it will pay cash and an incentive to businesses — and later ordinary households — that feed their excess power into the grid. This will help it to reduce load-shedding by up to four levels.

The precedent has been set. It is a shame that it is limited to Cape Town at this stage. Every one of the eight metro local authorities should have been ready to initiate this too, along with the large towns that also have the capacity, based on a common set of standards.

The failure to do this is due to inefficiency. Hopefully, it won’t take long before the others catch up. Most districts and local municipalities may not have the capacity, but they can get support from their nearby metros in various ways.

The local authority initiative could easily be incentivised through a tax rebate or municipal rate rebate for households that install solar power and batteries. This is probably the best short-term solution — about 12 months to mobilise citizens — given that other methods will take longer.

The Eskom emergency plants are costing about R7 per kWh to produce power and are burning a huge quantum of diesel. For a local authority to pay you R1 per kWh is therefore a huge saving for the country and allows the gridtied generation to be used elsewhere.

Yes, they also want you to purchase a R12,000 bidirectional meter to enable the purchase of household- and business-generated power. Some cannot afford that. The council could fund that purchase and allow it to be paid off through a credit against the first R12,000 of power sold.

There is also the question of municipalities’ intention to charge a minimum monthly flat fee (said to be R900) for any household wanting to retain an Eskom connection for periods when solar power is unavailable. That is exorbitant and a disincentive for those wanting to install a solar system. But a fee of some level for the connection is reasonable. What it needs is a sensible balance. We need to minimise these frictional costs.

Commercial banks can assist with this process. They could allow bondholders to draw an additional amount on their home loans to finance the installation of rooftop solar and battery storage in their homes. If banks know you are getting a rebate and are going to use the installation to generate income, they would doubtless be happy to do something like this. This will also be a great environmental, social & governance initiative for the financial industry as it would be helping households “go green” quicker.

Then there are other ways to facilitate the more rapid spread of larger-scale renewable energy facilities by businesses. Mpumalanga is the coal mining heartland, and as we progress with a just transition, it will become even more important to speed up the approvals needed to break ground for renewable energy projects, including the rezoning of agricultural land.

A widespread system like this carries so many positives. It will create skilled jobs, relieve the power grid system, enable businesses that are suffering due to load-shedding to be relieved of a portion of that burden, employ more people and pay more taxes. It is a win-win arrangement all the way.

This is the case even more so with businesses that have installed large-scale wind farms or solar plants. When a business has installed, say, a 155MW plant for an operation, this immediately relieves the grid of the net energy output from that plant and enables Eskom to provide that power to others.

And when the business has a wheeling arrangement with Eskom and is able to sell it some of the excess power generated, it provides even more capacity to the national grid. Furthermore, this additional power will be provided at a price far lower than it costs Eskom to generate power from its own facilities.

Finally, a major constraint is the absence of co-ordination among the government departments from which consent is required to establish renewable energy facilities. They should be working together, but instead it takes months, even years, to take applications from one department to another and another in turn.

Consider just some of the many permissions required to build a typical wind farm:

● The Civil Aviation Authority must give aviation approvals for tall structures;

● The department of forestry, fisheries & the environment requires an environmental impact assessment;

● The department of mineral resources & energy must grant a section 53 approval to “sterilise” surface mining rights;

● A water-use licence application is required by the department of water & sanitation, for water to be used during construction and operations;

● Eskom needs a cost estimate letter and a budget quote for access to the grid infrastructure;

● Municipalities must rezone the land. (Why, one asks, can municipalities or provinces not make all agricultural land open for wind and solar farms since it is known that they do not affect agricultural activities?;

● The SA National Roads Agency needs to grant a permit where a road is potentially affected; and

● The SA Weather Service needs to confirm that turbines are not interfering with weather radar.

Of course, all these matters need to be regulated. And the industry would be happy to pay existing fees. But they can be co-ordinated and the process carried through far more rapidly.

There is huge potential for SA to make inroads, and quickly, into the load-shedding challenge, using power that is good for the environment and cheaper than anything Eskom can produce. Why can we not set off on that journey right now?

FRONT PAGE

en-za

2023-02-03T08:00:00.0000000Z

2023-02-03T08:00:00.0000000Z

https://bdmobileapp.pressreader.com/article/281560884940624

Arena Holdings PTY