[Johannesburg, South Africa] – The Energy Council of South Africa (Council) welcomes President Cyril Ramaphosa’s announcement of a second wave of reforms to unleash rapid and inclusive growth made during the State of the Nation (SONA) address in the National Assembly on 06 February 2025.
It is important to reference that economic growth will drive increased demand in reliable and affordable energy. While the President appropriately highlighted that the brief return of load shedding last week was a strong reminder that our energy supply is still constrained, we all acknowledge and celebrate the positive progress made to date and the positive trajectory which is improving investor confidence.
The President emphasised the role of the Energy Action Plan, measures collectively executed through NECOM by all stakeholders, including a significant acceleration of private sector investment in new wind and solar PV generation. This has given overall system confidence that we can put load shedding behind us from a capacity perspective – however, this window of opportunity is highly dependent on accelerating the implementation of key reforms and investment to avoid returning to a major crisis and load shedding before 2030. This was also made clear in the President’s emphasis on the importance of the reform agenda and specifically the time pressure to improve delivery in 2025.
The promulgation of the Electricity Regulation Amendment (ERA) Act on the 1st of January 2025, along with the Climate Change Act now makes clear Government’s commitment to energy reform and decarbonisation. The Council regards the introduction of the Wholesale Electricity Market as the most fundamental reform step, which the President referenced as the foundation for a competitive market, and which must be laid this year.
While a competitive electricity market will drive investor certainty, efficiency and lower energy cost, it is important to expand on the building blocks referenced by the President, which the Council believes must include confidence and clarity on grid expansion and access rules, as well as accelerating investment in other balancing capacity, specifically Gas-to-Power and Battery Storage.
NECOM has proven to be a highly effective vehicle for change and has mobilised significant Business support to help accelerate Government objectives. The Council reiterates its commitment under the Business for South Africa partnership with Government to continue the open collaboration, good governance and facilitation of Business support to NECOM.
We particularly support the focused reference to addressing sustainable municipal electricity services and ultimately municipal debt and credit risk through a ring-fenced and competitive utility model. This has important bearing on the societal service delivery of affordable and reliable electricity services.
The Council welcomes and supports the determination expressed by the President to meet Government’s carbon reduction commitments. It is however important to recognise that our power system is coal dominated, and the operating extension has been a key part of ending load shedding. This will challenge the affordability and pace of decarbonising, which emphasises the need for transparent and robust joint planning and achievable milestones.
