President Moves to Reduce Energy Cuts' Impact in South Africa

President Cyril Ramaphosa announced an increase to the National Energy Regulator of South Africa (Nersa) licensing threshold for embedded generation projects from 1 MW to 100 MW. Ramaphosa intends the move to remove obstacles to financing embedded generation projects, saying: "This reform is expected to unlock significant investment in new generation capacity in the short and medium-term, enabling companies to build their own generation facilities to supply their energy needs."

Ramaphosa went on to say that, in the long term, this will increase the available supply of energy in the country and help reduce the burden on Eskom, allowing the national power utility to proceed with its intensive maintenance programme and reduce its reliance on expensive gas and diesel turbines.

South Africa is facing an uphill battle to keep the lights on, with energy supplier Eskom's past mismanagement and misspent funds being some of the reasons for the country's growing electricity woes. The energy supplier has also been plagued by breakdowns at various power supply stations, ageing infrastructure and wet coal for more than a decade. Load shedding power cuts have impacted the economy to such a degree that several small businesses have shut down since its introduction.