Key reforms by the government can accelerate energy turnaround and boost business confidence. That’s the word from the chief executive officer at the Energy Council, James Mackay. He says, as President Cyril Ramaphosa is set to deliver the State of the Nation Address on Thursday, 8 February 2024, there is certainly good news to reflect on, including a strengthening of the business-government partnership through Business for South Africa that is “getting the job done” through the National Energy Crisis Committee (NECOM).
Key reforms by the government can accelerate energy turnaround
The SONA is an opportunity for the President to confirm the government’s commitment to a sustainable energy future for all South Africans. It’s also for him to announce key interventions that will accelerate efforts to end loadshedding, ensure future energy security and modernise our energy sector. A strong message in this regard is critical to building investor confidence needed to unlock economic growth and job creation.
Accelerate efforts to end loadshedding
When reflecting on the most visible part of our energy crisis – loadshedding – there is increasing confidence that the historical downward trend of Eskom’s plant availability has stabilised and this is backed by a sustained positive performance at priority power stations. While Eskom has a lot of hard work ahead, with the new Eskom CEO starting on 1 March and the new National Transmission Company (NTCSA) Board already in place, a clear message of performance and accountability in Eskom is important.
Boost business confidence
The most important reform message should be for the government to continue to push for the passing of the Electricity Regulation Amendment Bill (ERA), currently before the National Assembly. This will help lay the foundation for the long-awaited sector modernisation, including the unbundling of Eskom and the introduction of our first energy market.
Improve confidence in energy policy
A clear message on ERA will significantly improve confidence in energy policy, including the critical need for grid expansion under the new NTCSA. This, is turn, will enable a shift in efforts to focus on efficient regulations and implementation capacity. The one-month extension to the IRP 2023 deadline announced by DMRE is also welcomed.
To open and robust debate on national energy policy
This is an opportunity for SONA to emphasise the government’s commitment to open and robust debate on national energy policy, which has multiple and significant impacts on all South Africans and should therefore be accessible to all, including labour and communities.
Our reality
Our reality is that business confidence is near historic low levels resulting in continued reluctance to make the much-needed capital investment required to grow our economy and create jobs. It is well accepted that the majority of future energy investment will come from the private sector.
READ MORE: Loadshedding-free SONA
Building a national energy vision that has the buy-in of the public and private sectors is critical. It is important that SONA acknowledges the important role of the private sector and the significant efforts of business, and supports the acceleration of an investor-friendly environment.
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The Energy Council remains committed to the partnership with the government to effectively address our energy challenges. We will continue to work with partners in Business, through Business for South Africa, and with the government to deliver an energy transition in the interests of all South Africans and put the economy on a path to sustainable growth.
THIS ARTICLE WAS WRITTEN JAMES MACKAY, THE CHIEF EXECUTIVE OFFICER AT THE ENERGY COUNCIL
