Cape Town: The Western Cape Government unveiled a multi-year plan to address Eskom's ballooning energy crisis, pledging billions of rands to stem unprecedented power cuts of between eight and 12 hours a day.
Delivering her maiden budget in a rowdy legislature on Tuesday, MEC for Finance and Economic Development Mireille Wenger set aside R1.1bn to ramp up energy security plans and decrease reliance on ailing power utility Eskom.
Wenger’s plans look at providing project preparation funding for energy projects to get to bankable feasibility, a move that will assist numerous developers, particularly smaller and local developers who were looking to participate in energy projects.
This, according to experts, is an essential step in getting a pipeline of projects that will increase energy supply.
Furthermore, the Western Cape wants to incentivise demand side management activities which is where anyone starts when looking to reduce energy demand.
In 2008 this programme was spearheaded by Eskom and looked at retrofitting lightbulbs from incandescent lighting to compact fluorescent lighting. It also led to the installation of solar water heaters, geyser blankets, heat pumps and pool timers to reduce demand.
The single current biggest threat to Western Cape residents, according to Wenger, is the “missing in action” stable supply of electricity.
"To take action, an additional R1.1 billion has been set aside over the [medium term] ... this is the action the Western Cape Government will take to tackle rolling blackouts," she said.
Almost R600 million was earmarked to reduce the impact of load shedding, to boost the green economy, to set up green energy projects, support to municipalities to help them get more power into the grid, and to identify critical transmission infrastructure upgrades.
The budget earmarked a further R501.52m for energy projects in the pipeline which was a "critical element" of the province’s ability to respond in an agile and flexible way.
Another takeway was the Western Cape’s R11.5m integrated resource plan which is vital given the transmission challenges in the province and how it will negatively impact on further investments in the energy sector.
“An amount of R11.5 million over the 2023 [medium-term framework] is allocated to develop the Western Cape integrated resource plan in relation to grid, generation, and [fiscal] planning, to provide a least cost plan for new generation in the province and to give policy [certainty] and attract investment,” said Wenger.
This ties into the Western Cape’s R15.8m network development plan to optimise the distribution network for Eskom's benefit.
When it comes to the province’s new energy generation programme, R444.5m was set aside over the 2023 medium-term framework. This will include support so that the province has expertly designed and well-prepared projects to deliver more energy, faster.
Energy expert Nick Hedley welcomed the new energy plan, saying it’s clear that Wenger was ready to work with the private sector.
"They [the Western Cape Government] won't have to pay for lots of the projects - they can just procure the power from private power producers ... the private sector can take charge of financing and building projects - the municipality just needs to buy their power,“ said Hedley.
Energy economist, Lungile Mashele, said the Western Cape understands the crux of the problem and how to solve it at a provincial level.
“While their ambitious plan may not achieve energy independence it will certainly assist Eskom by alleviating demand,” said Mashele.
“It should be noted however that the funds provided by the WC government will not build any new plants directly but will facilitate the development of gas and renewable energy projects not just for the Western Cape but for the benefit of the country as a whole,” said Mashele.
Global political and financial expert, Dr Dale Mckinley said the devil is in the detail.
“It’s not simply about the allocation of the funds, it’s where those funds go,” said Mckinley.
“Will they be transparent and accountably used? Or will it be jobs for pals? I think these are the real questions. Who is this really going to benefit? Only middle and upper classes?” he asked.
“Although welcomed, there are so many questions.”
Weekend Argus