BUSINESS MAVERICK: Government seeks 2,000MW of ‘emergency power’ — but with enough conditions to keep the lights off

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The Department of Mineral Resources and Energy has launched a process to procure 2,000MW of ‘emergency power’ and R40bn in investment. Yet the process looks set to be throttled by red tape and disincentives. That should set red lights flashing.

The Cambridge English Dictionary definition of emergency is “something dangerous or serious, such as an accident, that happens suddenly or unexpectedly and needs fast action in order to avoid harmful results”.

“The objective… is, not only to alleviate the current electricity supply constraints, but also, to reduce the utilisation of diesel-based peaking electrical generators. The programme seeks to procure 2,000MW from a range of energy sources and technologies. Proposed technical solutions will have to be dispatchable and be able to provide a range of support services to the grid system operator.

BEE is official government policy and while its goals are laudable, the results to date have been mixed, to say the least. Yet the “stringent local content thresholds and targets” — one sees the Department of Trade and Industry’s fingerprints here — and other conditions laid out are hardly going to woo investors. In this kind of an economic emergency, one would expect onerous regulations to be dropped, or trimmed back. If you need a parachute, you don’t ask what percentage of it was made locally. You just need a parachute that works.

 

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