S.Africa’s Gordhan thinks otherwise about alternative energy - CNBC Africa

S.Africa’s Gordhan thinks otherwise about alternative energy

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Contracts for 47 renewable energy projects were concluded in South Africa in 2012 and 2013, many of which are already under construction.

“Contracts for 47 renewable energy projects were concluded in 2012 and 2013, many of which are already under construction. These will add 2,460 MW of power capacity, and investment of 70 billion rand. A further 45 billion rand in investment will be contracted this year,” he said. 

“Over the medium term, we will add to electricity supply to improve the balance between available energy and the amounts required by businesses and households to thrive [and] pursue the exploration of shale gas to provide an additional energy source for our economy.” 

While an increase of 6.2 billion rand in spending was allocated to Economic Affairs in general in this year’s National Budget, spending on fuel and energy decreased from 11.1 billion rand to 8.6 billion rand. 

According to the National Treasury, this spending is expected to focus on expanding the Integrated National Electrification (INE) programme. 

The programme aims to increase the number of households with a connection to the electricity grid and the number of non-grid connections, provide substation infrastructure and promote energy efficiency through the continuation of the solar water geyser programme.  

A National Treasury official indicated that spending in fuel and energy doesn’t cover South African power utility, Eskom, which falls under the Department of Public Enterprises.  

“It goes towards the National Department and entities spend. The big spend goes towards the INE programme,” he said. 

Eskom, which generates approximately 95 per cent of the electricity used in South Africa, has been under the spotlight recently as Medupi power station, who’s first generating unit was expected to come online in December 2013, had its project deadline moved to the second half of 2014.   

Huge investment is also needed by 2015 to supply Eskom's power plants and 60 million metric tons of coal is needed by 2020 to curb fuel shortages. 

Despite this, Gordhan emphasised the positive developments surrounding the future of South Africa’s electricity supply. 

“The first unit of the Medupi power station is expected to be completed towards the end of this year. Transnet has increased capacity on its coal line. Plans are in place to further expand the coal, iron ore and manganese lines,” he said.

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