Remarks by the Honourable Minister of Mineral Resources and Energy Mr Gwede Mantashe (MP) Black Business Council Summit, Kempton Park, 30 June 2023

Programme Director,

President of the Black Business Council, Mr Elias Monag,

CEO of the BBC, Mr Kganki Matabane and your executive,

Distinguished guests,

Ladies and Gentlemen,

Allow me to express our appreciation to the Black Business Council (BBC) for the invitation to attend and address this year’s Black Business Summit.

I am particularly pleased that the engagements here are geared towards finding solutions to our economic challenges and improving the standard of living for the people of South Africa, mainly those that were previously disadvantaged.

Ladies and gentlemen, I have been asked to speak on “South Africa’s Energy Security and Sovereignty in the Context of Just Energy Transition”.

South Africa’s long-term plan, the National Development Plan (NDP) 2030, defines the country’s desired destination where inequality and unemployment are reduced, and poverty is eliminated for the attainment of a decent standard of living by all South Africans.

The plan predicts that, by 2030, our country will have an energy sector that provides reliable and efficient energy service at competitive rates; that is socially equitable through expanded access to energy at affordable tariffs; and that is environmentally

sustainable through reduced emissions and pollution.

In the context of the country’s electricity infrastructure development plan, the Integrated Resource Plan (IRP), energy security is characterized as the development of sufficient generation capacity to meet South Africa’s growing demand for electricity.

To give effect to this, the IRP 2019 – which is currently under review – identified a diversified energy mix required to meet the expected electricity demand growth, whilst reducing reliance on a single or a few primary energy sources.

This mix is inclusive of coal, nuclear, and gas which play an integral part by providing us with the much-needed baseload energy. Adding to this, are renewable technologies such as Solar PV, Wind, Hydro, and Battery Storage which present us with an

opportunity to diversify the electricity mix by producing distributed generation and provide off-grid electricity.

Today, South Africa’s power system consists of generation options varying from 38 GW installed capacity from coal, 1.8 GW from nuclear, 2.7 GW from pumped storage, 1.7 GW from hydro, 3.8 GW from diesel and about 6.0 GW from renewable energy.

Despite this connected capacity, our nation continues to be subjected to electricity supply-demand imbalance which must be resolved as speedily as possible.

To address this challenge and guarantee the people of South Africa a stable electricity supply, our government adopted a multi-pronged approach focusing on improving Eskom’s Energy Availability Factor (EAF) whilst speeding up the processes of adding

new generation capacity to the grid, including procurement of emergency power, and purchasing electricity from neighbouring countries.

Arresting the decline in Eskom’s EAF through maintenance of existing coal fired power plants remains the most feasible and logical option to resolve loadshedding. With the progress made thus far in this regard coupled with the work done to add more energy to the grid, we are confident that we will see an end to loadshedding sooner than anticipated.

For instance, the Department of Mineral Resources and Energy (DMRE) has through the Independent Power Producer (IPP) office procured a total of seven thousand seven hundred and eighty-six megawatts (7786 MW) via the Risk Mitigation

Programme and Bid Windows 4,5 and 6. A total of two thousand, one hundred and thirty megawatts (2 130 MW) are connected to the grid. Whereas a total of one hundred and fifty megawatts (150 MW) under RMIPPPP and seven hundred and

eighty-four megawatts (784 MW) under Bid Window 5 are envisaged to be operationalised between November 2023 and August 2024, respectively.

Whilst projects totalling one thousand megawatts (1 000) under Bid Window 6 have been allocated, three thousand, two hundred megawatts (3 200 MW) wind capacity could not be allocated due to grid unavailability. This is the single-most challenge we

face to address the current energy crisis. To enable Eskom to invest in transmission and distribution infrastructure, government has taken over a portion of the power utility’s debt. This is essential because with the limited grid capacity, we will not be able to add the new electricity.

Notwithstanding this challenge, the Department is working on procuring a further ten thousand megawatts of renewable energy under Bid Windows 7 and 8; three thousand megawatts of Gas-to-Power; two thousand, five hundred megawatts of nuclear energy; and one thousand, two hundred and thirty megawatts of battery storage. Whilst we are fully committed to achieving the energy trilemma balance through transitioning from high carbon emissions to low carbon emissions, as a sovereign state, we must exercise energy sovereignty and eradicate energy poverty not only in our own country, but on the African continent.

Statistics indicate that about 600 million Africans equivalent to 43% of the population do not have access to electricity. In our country, just less than 10% of the population does not have access to electricity. This is despite the progress made since 1994

where access to electricity stood at 34%, compared to the 90% access today.

The crux of the matter is that whereas developed nations have turned their focus to reconfiguring their energy systems to be supported by clean energy systems for the transition, the African continent is still grappling with achieving universal access to

energy.

There is no doubt that we are faced with tough and complex policy choices to address energy poverty while heeding the clarion call to combat adverse climate change which impacts on the health and wellbeing of the people.

However, as a sovereign state, our approach cannot be about one against the other, but one that is premised on the balance between fulfilling our country’s socio-economic needs whilst preserving the environment. Hence, we advocate for a Just Transition from high to low carbon emissions instead of a transition from coal to renewables. The Justness in the Transition must be seen to be done. It must be people centred and take into consideration the socio-economic conditions of communities that are directly affected by the transition, such as the communities in the Mpumalanga coal-belt.

We must, therefore, never allow ourselves to be encircled by the developed nations who fund lobbyists to pit our country’s developmental needs against their own selfserving protection of the environment. Our country deserves an opportunity to

transition at pace and scale determined by its citizens.

It is therefore important for us to develop the upstream petroleum industry and ensure that the new discoveries of gas in our country and our neighbouring countries find their way to our power plants for repurposing.

I trust that this summit will help us shape our Just Transition in a manner that is practical and actionable to sustain economic growth and the betterment of human life.

We look forward to the outcomes of the summit.

I thank you.

Source: Government of South Africa