A unique guide to business and investment in South Africa.
Welcome to the eighth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. A special feature focusses on the huge potential for growth and job creation which the tourism industry holds. The possibilities presented by the age of renewable energy for the mining industry is the topic of another special feature and the CEO of Minerals Council South Africa responds to a set of questions on the state of mining in the country. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces.
FOCUS OVERVIEW Energy
FOCUS OVERVIEW Energy Policy decisions hold the key to stabilising power supply. The open-cycle gas turbine plant at Shakaskraal in KwaZulu-Natal. The decision in May 2019 that power projects generating less than 10MW do not have to get licences from national government has given hope to independent power producers and city governments across South Africa that a new era in energy policy has begun. These smaller projects can go ahead (up to a total of 500MW) outside of the country’s Integrated Resource Plan but the next step – allowing companies to sell any excess power they generate to the grid – will be a real game-changer. South Africa’s vaunted Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) attracted about R200-billion in committed investments in just five years but it was limited to large projects. An example of the potential that lies within companies is Tongaat Hulett. This company’s sugar mills are producing between 12MW and 14MW of power. The company believes that the national sugar industry could generate between 700MW and 900MW. The same could be said for Sappi’s wood and fibre mill and all of the country’s breweries. Most mining companies are now investigating (or have started) generating power for their own use. Discussions about feed-in tariffs will have to be finalised before the huge energy-generating potential of these sectors can be fulfilled. If SECTOR INSIGHT Small-scale independent generation could be a game-changer. national utility Eskom is broken into separate business units then the likelihood of the tariff discussions taking place will greatly increase. In his first medium-term budget policy statement in late 2018, new Finance Minister Tito Mboweni, expressed an opinion on the unbundling of Eskom. Mboweni said, “Restructuring of the electricity sector is underway. This must include a long-term plan to restructure Eskom and deal with its debt obligations.” Eskom runs electricity genera- SOUTH AFRICAN BUSINESS 2020 62
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