19 July 2024
FROM CRISIS TO OPPORTUNITY
A must watch speech by a very wise man during the Debate on Opening of Parliament Address 2024. Minister of Energy and Electricity Dr Kgosientsho RamokgoThe Constitution affords all South Africans the right to see and hear what happens in Parliament.
View: https://m.youtube.com/watch?v=nT2AYFrIshQ
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Back in the 80s’: SA in crisis, but energy investment drive could rival gold rush, says JP Landman
29 September 2023 Thought Leadership Comments Offon ‘Back in the 80s’: SA in crisis, but energy investment drive could rival gold rush, says JP Landman
According to JP Landman, South Africa is on the brink of disaster
Image By: Daily Investor
The original article can be
found here.
SA is in a crisis, but investments into the energy transition and beating load shedding over the next decade could rival the growth explosion that followed the discovery of gold and diamonds.
That’s the view of well-known independent political and economic analyst JP Landman, who said SA is in many ways
back where we were in the late 1980s.
Speaking at a panel discussion at the opening of the annual convention of the South African Property Owners’ Association in Sun City on Wednesday, Landman said the trillions in rands that stand to be invested in energy, in the coming years, could yet be the silver lining the country has been looking for.
According to Landman:
If you put it all together, the move from fossil to green, the move to new technologies of hydrogen, what you will find is a landscape of investment possibilities which are, any day of week, as big as the combined effect of diamonds and gold so many years ago.
But he added SA has new and different challenges as well.
“There are differences between now and the late 1980s. We had a civil war, we don’t have that now, but I must say that organised crime is giving us quite a go. We didn’t have democracy then; we do have one now. But there are similarities. The similarities are simply that the economy is stagnant, that the population growth is faster than the economic growth, and that our politics is stagnant.”
‘Opportunity of a lifetime’
Referring to SA Reserve Bank’s estimates that load shedding had shaved about 2 percentage points off of GDP growth, Landman said the only way out of the energy crisis was “massive investment in new generation and transmission capacity”.
“And it is that investment, which is really the biggest opportunity, I think – in a sense, in our lifetime.”
Landman pointed out that a total of R1.5 trillion was expected to be spent on electricity generation, transmission and distribution in SA over the next eight years, with a further R3 trillion likely needed after 2030.
If the nascent hydrogen industry in SA were added into the mix – including the harbour being built on the country’s West Coast to potentially export hydrogen to Europe and elsewhere – there was also cause for optimism, he said.
“Bear in mind that our economy is only about R7 trillion, and then you get a feel for the magnitude of what is busy playing out.”
As to where “all the money would come from” for all these investments, Landman said it would come from the private sector, drawing comparisons to the creation of the mobile phone industry in SA more than a quarter of a century ago.
“People ask where will the money come from… Well, let me just remind you that that 25 years ago none of us had smartphones – certainly not 30 years ago. People didn’t have cellphones – they didn’t exist in this country. Today you have a vibrant cellphone industry.”
Landman added:
Where does the money come from, well the money came from the private sector – there is not a cent of public money in our mobile [phone] industry. It’s all private capital that was mobilised over a quarter of a century and it gave us what we have. And that is the model that is going to play out in electricity as well.
He said the focus should be on what the private sector could be able to do in resolving the power crisis, rather than on the question of whether Eskom can be fixed.
While he does not necessarily believe the situation at the power utility will deteriorate further, he does not expect it to improve either.
As such, the hope for significantly more energy generation should not be pinned on Eskom, which would in any case in the coming years be taking out of commission at least eight of the 14 South African power stations.
He quipped at one point that “Eskom was f***ed,” prompting laughter in the auditorium.
End of monopolies
What gave him hope in the prospect of the private sector coming to SA’s rescue was the fact that President Cyril Ramaphosa had, in two moves in 2021 and 2022, effectively “changed the regulatory and legislative environment for power/energy in SA completely”.
“We went from a highly regulated electricity market where one company, a state-owned monopoly had the monopoly on the power and had the monopoly provision on power, and we move to a free market/open market of electricity in about 13 months.
And the consequences of that is busy flowing through.”
He said while he would not say “load shedding was a good thing”, but if it weren’t for the energy crisis, SA wouldn’t have experienced “this change from a government-run monopoly to private market electricity
