Electricity policy is economic policy: the race for reliable power

Electricity policy, at its core is economic policy. Nations that can produce abundant, reliable, and affordable electricity create the conditions for industrial growth, technological leadership, higher wages, and rising living standards. Those that fail to do so eventually discover that electricity shortages are a direct threat to national prosperity.

The world is at a pivotal moment. The rapid growth of artificial intelligence, advanced manufacturing, electrification, and data centers will require vast quantities of dependable electricity. Meeting demand requires more than slogans, subsidies, or politically fashionable technologies based on ideological movements. It requires a serious commitment to baseload power and laser sharp focus on nuclear generated electricity, including the development of advanced spent fuel solutions.

The challenge is not simply one of funding. Governments around the world have demonstrated that throwing money at electricity projects such as weather dependent wind turbines and solar panels, does not guarantee success. Two people cleaning a small shed instead of one may increase the time of success by twofold, but placing fifty people in the same small area will make the task nearly impossible. What needs to be done is the immediate creation of conditions where public policy and private-sector execution work together to deliver measurable outcomes.

Despite America watching the world's 80 nuclear reactors under construction around the globe,

America has an opportunity to become the global leader in next-generation nuclear generated electricity if policymakers focus on results rather than handouts. While the federal government is definitely moving in the right direction, it should focus its attention on acting as a catalyst, executing on regulatory frameworks timeously, supporting strategic research and development, and partnering with private industry to commercialize advanced reactor technologies, small modular reactors, and spent fuel recycling solutions. Success should be measured not by dollars allocated but by electricity generated, costs reduced, jobs created, and industries built.

History provides a useful lesson: South Africa once possessed one of the most respected electricity systems in the world. Eskom was established as a state-owned utility focused primarily on reliable power generation and infrastructure delivery. For decades, the organization functioned as a highly capable engineering and project management institution responsible for building the backbone of the country's electricity network.

One of its biggest achievements in South Africa was the construction of the Koeberg Nuclear Power Station in the Western Cape. Unit 1 being synchronized to the grid in 1984 and Unit 2 in 1985, the power station has just been granted a 20-year life extension. Koeberg remains the only commercial nuclear power station on the African continent and continues to provide stable, low-emission baseload electricity. It has demonstrated the long-term value of nuclear infrastructure.

Electricity problems later emerged not because the country lacked assets or engineering expertise, but because governance and incentives deteriorated and changed over time. Following South Africa's political transition in 1994, many critics argue that state-owned enterprises became increasingly influenced by political objectives rather than operational excellence. Inefficiencies accumulated, maintenance was deferred, and accountability weakened. The result was a predictable decline in electricity reliability and the ensuing correlated macro-economic effects.

Losses generated by mismanagement from Eskom were socialized across society, while the benefits often accrued to politically connected insiders. As power stations became less reliable and new generation capacity failed to arrive on schedule, South Africa entered a cycle of rolling blackouts known locally as load shedding. The consequences extended far beyond the electricity sector. Factories reduced production, small businesses struggled to survive and investors, domestic and foreign, became wary of committing capital to a country where electricity supply could not be guaranteed, and as a result, economic growth slowed, and productive activity suffered. Note that this is in addition to the millions of people that still lack access to electricity in the country and who were certainly not prioritized during the process.

Against this backdrop, South Africa pursued weather dependent wind turbines and solar panels procurement initiatives resulting in the Green Economy Accord being signed in November 2011 as part of a broader effort to promote green industries, employment creation, and wind and solar development. The Accord emphasized partnership among government, business, labor, and communities while encouraging investment in renewable energy technologies. The employment creation promises of the accord have failed dismally on their targets, and so has the impact on national grid infrastructure stability.

In tandem, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was also launched in 2011 to attract private-sector investment into wind and solar electricity generation through a competitive procurement process. The program was designed to stimulate wind and solar electricity development and bring private capital into the sector, which it has to some extent, but the pudding proof is the highest year of rolling blackouts recorded in 2023.

In 2023, the country experienced the highest level of rolling blackouts, with the South African Reserve Bank estimating the daily economic cost at up to R1 billion. Koeberg's Unit 1 was out for maintenance at the time and frustratingly added a stage to every planned power outage (which refers to the frequency of how long you have to go without power – which in 2023, was up to 12 hours per day). None of the solar farms, nor the wind assets could assist in solving this problem.