Mantashe cannot scapegoat the private sector for load-shedding – here are 5 reasons why

Issued by Kevin Mileham MP – DA Shadow Minister of Mineral Resources and Energy
02 May 2023 in News

Note to editors: Please find attached soundbite by Kevin Mileham MP.

After spending the past 5 years, since his appointment as the Minister of Mineral Resources and Energy, frustrating and blocking the full participation of the private sector in the energy sector – Gwede Mantashe has made a shameless turn and is now accusing the private sector for the load-shedding crisis.

The reality is that no amount of blame shifting will hide the undeniable fact that Mantashe has, since his appointment, failed to move the needle on the procurement of independent power generation and the incentivisation of private investment in the sector. Together with his ANC comrades, he has fostered policy and regulatory uncertainty, and has not moved fast enough to remove red tape impeding the active participation of Independent Power Producers.

Listed below are the 5 occasions where Gwede Mantashe has either actively fought against private sector participation in the energy sector or has failed to remove red tape standing in the way of IPP investment:

  • “Overreliance on the private sector will be a mistake” – In November 2022, Gwede Mantashe insisted that electricity generation will remain largely in government hands for the foreseeable future. Mantashe said previously that overreliance on the private sector would be a mistake. He suggested the establishment of another state entity to compete with Eskom and boost energy supply.
  • Refused to increase the threshold for embedded generation – Since his appointment in 2018, Mantashe was strongly opposed to the idea of increasing the threshold for embedded generation to 100MW. On one occasion he criticized the call as ‘academic’ and argued that the market is only ready for a 10MW threshold. He had to be strong armed to increase the threshold to 100MW.
  • Failure to remove red tape for IPP investment – The South African Independent Power Producers Association has long made the argument that 5,000MW to 10,000MW of plant that could be built in the next two years if IPPs could be granted a waiver on power purchase agreements with private off-takers. Mantashe’s Department still insists that IPPs sign PPAs before building a power generation plant. It takes months and sometimes years to get to a signed PPA.
  • Failure to update the Intergraded Resource Plan – Despite repeated assurances that the review of the 2019 Integrated Resource Plan (IRP) will be concluded by the end of March 2023 – Gwede Mantashe has failed to meet this target. Without an updated IRP, South Africa will be forced to continue relying on the outdated energy assumptions of IRP 2019 do not reflect what must be done to address the ongoing electricity crisis.
  • Small Projects Programme has stalled – The Small Projects Programme (SPP) which was established in 2013 to help local independent power producers run power projects up to 5MW in size, has stalled. Five years after incurring costs to keep the 20 projects, which range across wind, solar and biomass technologies, on standby for government go-ahead, no power purchase agreements have been signed and no projects have proceeded into construction.

Eskom’s inability to maintain a regular supply of electricity, effectively subjecting the country to rolling blackouts much more frequently than any time in the past 14 years, has become the single biggest threat to livelihoods and our economy. Instead of taking responsibility for creating this crisis, the ANC and Gwede Mantashe have decided to shift blame to imaginary villains.