Ramaphosa stresses role of municipalities in energy transition, grid expansion
President Cyril Ramaphosa says municipalities can now buy power from independent producers and establish their own power-producing entities.
Ramaphosa made these remarks whilst delivering his keynote address at the opening ceremony of the Municipal Just Energy Transition (JET) Conference, on Monday morning in Johannesburg.
This after he signed into law the Electricity Regulation Amendment Act which sets out far-reaching reforms of the country’s electricity sector, including the establishment of a competitive electricity market.
Ramaphosa says the Act aims to foster a competitive electricity market despite South Africa's Local Government Association’s request for more discussions.
“The reforms contained in the law must help to speed up the decarbonisation process but more than that, they must result in a better deal for households and businesses. The national climate change effort must not come at a higher cost for electricity users”.
Ramaphosa says the country needs to reduce its reliance on carbon emissions as it poses a significant risk to the economy and environment.
“This has implications for South African goods and products entering these markets. For as long as we don’t embark on this journey as we produce our goods with fossil-intensive energy when they reach their destination or markets, they will impose tariffs on us, making our goods uncompetitive”.
“The regulatory changes we introduced in 2021 to increase the licensing threshold for generation projects has results in a pipeline of over 130 confirmed projects. This amounts to approximately 22 000 MW of capacity with an estimated investment value of some R390 billion”.
“Municipalities need to be in the driving seat when it comes to providing clean, affordable energy to communities, businesses, and industries. One of the aims of this conference is to unlock the institutional arrangement required to drive the decarbonisation effort”.
Ramaphosa says government must ensure that energy transitions do not contribute to energy poverty.
This is as South African households are already battling with the rising cost of living and electricity prices.
“We continue to call on municipalities to join the efforts of reducing the level of poverty amongst our people by implementing the indigent policy. It will be important to sustain and expand this support during the just energy transition and ensure that many poor households benefit from this subsidy”.
“This investment will need to draw on both public and private sources of capital. As government we are working on financing solutions that will include loans for the national transmission company of South Africa to expand the grid by almost 14 000km” added Ramaphosa.
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