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Mitigating the current electricity crunch

19th September 2014

By: Sisa Njikelana

  

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Energy, particularly electricity, is acknowledged as an enabler of socioeconomic wellbeing, as aptly espoused by the South African government. Translating this acknowledgement into action has, unfortunately, eluded our government. The current crisis bears testimony to such a regrettable situation.

Further, acknowledging the deep-rooted nature of the crisis will go a long way towards providing solutions to the crisis. Regarding peak demand, the National Energy Response Team (NERT) predicted as far back as 2008 a generation net reserve margin of below 10% for six or seven years if no significant efforts were made. Demand-side activities were identified as the most viable at the time. Unfortunately, the call for a 10% reduction in electricity consumption could not be achieved.

The Energy Conservation Scheme (ECS) was then designed to respond to the crisis, with the main thrust being, besides others, to provide support and infrastructure for distributors’ direct customers to participate in energy conservation and to educate customers, as well as the broader population, on the benefits of playing their part in saving energy. Central to this was behavioural change and the implementation of energy efficient equipment in homes and offices. Barriers such as legislation, the state of readiness of power utility Eskom and municipalities, as well as acceptance of ECS rules and product preventing its full implementation, have long been identified.

Government has conceded that poor planning has resulted in the current quagmire.

The ECS, the power station return-to- service drive, the capital expansion programme, the 49M campaign and the industry energy efficiency drive were among efforts to reverse and mitigate the situation.

The business community recognises that certain interventions have borne success, but inputs during the submissions on the third multiyear determination period and presentations to Parliament were a clarion call for more to be done. Note should be taken of the complaint that opportunities to facilitate private-sector investment in power production remain curtailed.

While recognising that genuine efforts have been made, such as the ECS and other initiatives, delays in the completion of the Medupe and Kusile coal-fired power stations and the Ingula pumped-storage scheme have had the obvious results, which can only be decried. The desired effect of the Energy Efficiency Strategy was far from achieved and the strategy had a minimal effect, including the slow conclusion of the revised strategy. Further, delays in the finalisation of the Integrated Resource Plan (IRP), implementation of the Renewable Energy Independent Power Producer Procurement Programme and concentrated solar power projects in the Northern Cape, as well as a lack of plausible growth of the Industrial Energy Efficiency Improvement Project, ineptitude in addressing rehabilitation of infrastructure, especially the Approach to Distribution Asset Management (ADAM), inexcusable delays in expected refinement of the regulatory environment and institutional arrangements to improve operational efficiency, all contribute to the limited impact in mitigating the current power crunch.

The current undue focus on supply- side efforts, in my view, results in missing the opportunity to provide an effective mitigation drive that would provide a formidable base for a long-term turnaround project that will be guided by the IRP and the Integrated Energy Plan.

In my view, little effort has been, and is being, made with respect to visible implementation of the Energy Efficiency Strategy, including slow growth in industrial efficiency, cogeneration (by increasing allocation from 800 MW to 3 000 MW in the IRP), rehabilitation of infrastructure by crafting a public–private partnership-based investment model to finance the backlog of R35-billion, fast-track support for and payment of debts to municipalities and facilitate embedded generation, including a rooftop solar drive, to name a few.

I need to emphasise that a combinative approach to the supply side and the demand side is a viable option.

Other initiatives that can augment the mitigation drive are: •the reformulation of demand-side measures, including redirecting management of the previous demand-side management programme from Eskom to the South African National Energy Development Institute; •the establishment of an independent system and market operator, or ISMO, and the rationalisation of the transmission assets, as they are owned by both Eskom and municipalities; •the expedited transformation of the gas industry, particularly increasing the supply of liquefied petroleum gas; •the designation of coal as a strategic mineral and insisting on adequate supply of the fuel to Eskom; and •the non-negotiable payment of the billions owed to municipalities.

The current infrastructure rehabilitation and maintenance backlog is addressed through the ADAM as a critical emergency intervention; surely, R320-million for the ‘Mini ADAM’ as an initial allocation to address a R35-billion backlog that is growing at R2,5-billion a year is a mere pittance.

The NERT states: “The power crisis in South Africa is expected to persist until at least 2013, when new generation capacity begins to come on line.” Unfortunately, we are now beyond 2013!

A broader and strategic approach in mitigating the current power crunch is, undoubtedly, the most viable option, given its effectiveness. At the end of the day, such a multipronged effort must assume a strong national character, with government as a high-profile champion.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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