Sussex Energy Group at SPRU

In April I wrote a blog in Le Monde Diplomatique about South Africa’s on-going electricity crisis. This crisis has resulted in regular load-shedding across the country since late last year as the country’s cash strapped utility Eskom faces a $17 billion funding gap to 2018. Electricity consumers face a 250 per cent cumulative increase in electricity prices since 2008. The country’s state-owned monopoly electricity sector was almost exclusively coal-fired until a procurement programme for privately generated renewable energy was introduced in 2011. Since writing my blog, there have been a number of notable developments in an electricity sector that is currently subject to constant confusion and very likely, change. Despite the uncertainty it is clear that South Africa’s electricity crisis has opened a window of opportunity for the development of different technologies and the procurement models that facilitate them.

Firstly in mid-April, government announced the winners of the latest round of the country’s renewable energy independent power producers’ procurement programme (RE IPPPP). This takes the total of privately generated renewable energy up to 5.2 GW (the country’s total installed capacity is currently 44 GW, of which only 33 GW is currently available). Government has also announced that a further 6 GW of renewables will be procured by 2020. In the case of electricity generated by wind and solar PV IPPs, the average cost of electricity has now reached grid parity with Eskom’s coal-fired power plants still under construction. When built, Medupi and Kusile will be the largest coal-fired power plants on the continent at 4,800 MW each. However, both have been subject to delays, labour unrest, and continuing cost overruns.

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