Drastic action to address the power crisis in South Africa, like the Cabinet meeting that President Cyril Ramaphosa announced this past Friday, should have been taken long ago. And even though it is a bit late, the FF Plus welcomes the opportunity that he is creating for decisions to be taken that can save South Africa's economy.
The best way to mobilise funds from the private sector to contribute to power supply is to open up the power grid to Independent Power Producers (IPPs). Numerous large-scale projects are just waiting for a favourable regulatory environment; but one can unlock even greater potential by allowing consumer-producers to contribute to the power grid.
The alternative to opening the power grid to IPP's is to throw even more money at Eskom. In reality that would come down to subsidising fossil fuels, while that is precisely what we should be moving away from.
Ironically, it is often argued that renewable energy or "green energy" is too expensive, while it is state funds and guarantees that are keeping "unclean energy" going at the moment.
Consumer-producers may include households, small businesses, shopping centres, large factories and farms. Every single roof in South Africa could be transformed into a power generating surface.
For example, if one million RDP houses are each fitted with photovoltaic panels of four kilowatt, it would contribute a staggering four gigawatt to the country's power generating capacity. Even if these panels have no additional battery storage capacity, their power contribution would ensure that South Africa does not have to endure stage 6 load shedding during working hours again.
While mounting solar panels on RDP houses would require external funding, more affluent households and businesses can easily fund such investments themselves if they can save or even make some money out of it.
The critique usually voiced against these kinds of plans raises the issue of the administration related to something of this extent. The critique does not make any sense if one considers the fact that every consumer's power usage is already being administrated; so why would it be impossible to administrate production.
While everyone agrees that a good mix of various power sources is important to fully meet the demand for power, it is also necessary to open up the power grid to independent power suppliers of all sizes. It will lead to a more stable and green economy, while it will reduce fiscal deficits.
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