02 January 2014, Johannesburg – In finding solutions to South Africa’s future energy needs, the country is looking to invest in new generation facilities, rationalise consumption and diversify its energy mix.
In mid-November, state-owned utility Eskom called on its main heavy-industry clients to reduce their power consumption by 10% during peak periods to avoid widespread outages.
While these restrictions lasted a few days rather than the up to two weeks originally anticipated, manufacturers still incurred losses and affected confidence in future power supplies.
It was also a reminder of the rolling blackouts in the country throughout 2008 and underlined the urgency of the growing energy deficit.
As the Department of Energy has conceded, investment in the energy sector over the past 20 years has not been enough to meet the rapid demand growth that began in the early 2000s.
The fact that there have not been more blackouts since 2008 is largely the result of a global economic slowdown, which has reduced domestic industrial activity.
Although capacity expansion has not kept pace with demand, two new coal-fired power plants – Medupi and Kusile – are nearing completion. Each will add 4 800MW to the grid, making them among the largest power stations in the world. Medupi is expected to be ready in late 2014, followed by Kusile soon after.
Alongside the planned long-term expansion in capacity, Eskom has sought to slow demand growth, calling upon both retail and corporate customers to reduce their consumption, especially during peak demand hours.
The government has also announced plans to provide tax incentives to companies that initiate measures to reduce consumption.
According to Nelisiwe Magubane, director-general of the Department of Energy, the aim of the programme is not just to have companies cut consumption through reducing activity but to promote energy efficiency.
“The allowance for energy efficiency savings will provide tax incentives for energy savings improvements, as outlined in regulations for businesses based on measured and verified energy savings through registrations with the South African National Energy Development Institute,” said Magubane.