Finance minister raring to go, but energy minister and regulator are slow-walking desperately needed new energy sourcesFinance Minister Tito Mboweni at a media briefing ahead of his Budget Policy Statement in Parliament. Date: February 26, 2020. Picture: ESA ALEXANDER/SUNDAY TIMES
Among Moody’s main reasons for the downgrade was limited progress made with structural reform over the past two years. Of these, Moody’s singled out constraints in electricity supply as a particular impediment to growth. While Ramaphosa and Mboweni have a lot to deal with right now, easing the energy constraint should be top priority so that when SA emerges from the Covid-19 crisis the prospect of a more reliable energy supply will be on the horizon.
But instead of loosening regulations to allow more entities to do this quickly, Mantashe maintained the status quo, which requires that anyone who wishes to generate more than 1MW of energy to obtain a licence from the National Energy Regulator of SA . Gazetting of schedule 2 came soon after another spanner was lodged in the works, this time by Nersa. For the government to procure more energy capacity, the minister of mineral resources & energy must first publish determinations under the Electricity Regulation Act calling for proposals from power producers to provide capacity using specified technologies.
We should declare the Eskom_SA situation also a national disaster and thereby allowing the process to be fast tracked for new generation capacity. The energy minister is tighten the regulations, instead of allowing the market dynamics to boost generation capacity.