Eaton Africa’s Seydou Kane on what the liberalisation of SA’s energy sector means

The energy sector in South Africa has been facing significant challenges, with mining companies losing between two and a half thousand and three thousand megawatts a year due to power cuts. This loss is equivalent to the size of one large power station. To address this issue, mining companies are seeking the freedom to self-generate more power, beyond the current limit of one megawatt without ministerial approval. They have projects in the pipeline, such as two thousand megawatts of wind and solar projects, which could help fill the gap in just nine months. However, they are encountering bureaucratic hurdles that slow down the process, such as wheeling charges to connect to the national grid and negotiating with municipalities for land use rights. Despite the recent announcement by the Minister regarding energy sector liberalization, there are concerns about the pace of execution and the impact on the economy. Seydou Kane, Managing Director for Eaton Africa, believes that new technologies and solutions can help mining companies utilize excess capacity and contribute power back to the grid. He acknowledges the challenges of bureaucracy and emphasizes the need for swift execution to address the energy crisis. Kane highlights the importance of liberalizing the energy market to attract new technologies and modernize infrastructure. However, he cautions that this transition will take time and requires a rigorous procurement process to ensure effectiveness. While there is optimism about moving away from coal and towards renewable energy sources, such as wind and solar power, there are concerns about the industry's ability to finance and sustain this transformation. Kane suggests that the right regulatory framework and incentives, such as tax breaks and financing options, are necessary to drive investments in renewable energy. He emphasizes the potential of embedded generation and bidirectional flows in electricity distribution to accelerate the transition to cleaner energy sources. Kane calls for a visionary approach to energy policy and urges the government to consider the opportunity cost of not investing in the energy sector, which could amount to 1.5% to 2% of GDP. Despite the challenges ahead, Kane remains hopeful that with the right strategies and incentives in place, South Africa can overcome its energy crisis and create a more sustainable and efficient energy sector.