Is Stage 2 the new normal?

President Ramaphosa’s recent announcements for the energy sector embracing the private sector and various renewable energy initiatives were certainly very welcome. However, these initiatives will hardly make a dent in what is the real problem. These initiatives will enable approximately 2000 MW of additional energy to the grid in the next 3 to 6 months.

The country currently has approximately 40 000 MW of installed generation capacity of which only 25 000MW is, on average, available at any one time. The current shortfall is approximately 6000MW in order to meet current demand and ensure grid reliability. So the measure announced, while welcome, will not solve the load shedding crisis. Indeed, in his announcement the President acknowledged that these measures would hopefully stablise the grid to a maximum of Stage 2 load shedding.

The fact remains electrification in the country has gone backward. The current demand is the same as it was 10 years ago. Of particular concern, is the number of un-electrified households has climbed from 20% in 2011 to 26% currently. Industrial demand has also stagnated.

Most commentators agree Base Load Generation remains the only long-term solution. This would necessitate a massive investment over the next 10 years of up to 20 000MW. This is on top of the current renewable generation and other short-term fossil fuel solutions. How you may ask is this even thinkable?

As always when it comes to long-term strategies it’s normally a safe bet to “follow the money”.

It is unlikely that new coal generation will be part of this new Base Load mix. The carbon offsets would be too costly for the country making SA uncompetitive internationally. In addition, international finance for these projects would not be forthcoming.

That leaves nuclear generation as the only viable and proven Base Load energy solution.

Hear me out before discarding this approach.

Nuclear energy is a proven technology with a 50-year plus track record. It produces a small but manageable waste problem.

International consortiums will line up to finance and install nuclear plants in southern Africa, at no upfront costs provided a stable, long-term off-taker is guaranteed. No local participation would be required.

In my view, this is the only long-term pragmatic option.

South Africa, unfortunately, has no other choice.

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