HomeIndustry SectorsEnergy EfficiencyIs our new energy policy good enough?

Is our new energy policy good enough?

Energy Minister
Dipuo Peters
29 September 2010 – Government has taken the lead in rolling out a plan that will give a massive boost to the green economic commitments.

Since the heady days of Polokwane, the government has taken the lead in rolling out an electricity plan that will give a massive boost to the country’s large-scale green economic commitments. Renewable energy is becoming a buzzword in the political corridors of power.

The central command of this unprecedented activity is the Ministry of Energy which has become a greenhouse where new ideas about global and local shifts away from fossil-based energy sources are cultivated. The ministry has initiated projects to expand the mix of energy and power generation in South Africa. Energy Minister Dipuo Peters says the new path will "ensure a security of supply of energy resources that include clean and renewable resources". This tectonic shift comes at a time when the R9billion Pebble Bed Modular Reactor company and its projects have been decommissioned, and when nuclear energy has become just one of the generation possibilities that will form part of an integrated 25-year electricity resource plan. It also comes at a time when Eskom’s role as sole purchaser and supplier of energy for the nation will be radically altered, to enhance the attractiveness of South Africa’s energy space as an investment destination for renewable and non-renewable energy by independent power producers.

South Africa currently consumes 40 gigawatts of electricity. It is estimated that the country’s industrial and household sectors will be consuming double the amount of gigawatts in 20 to 30 years’ time. The centrality of energy policy on the development landscape is unmistakable, and the direction that this policy takes concerns all of South Africa’s citizens.

But this new developmental path is not without problems. Eskom has doubled up not only as sole seller of electricity but also as sole buyer. The government has therefore embarked upon a plan to construct a new buyer and seller of electricity, which is independent of Eskom. The Independent System and Market Operator (ISMO) will plan, procure and schedule generators to ensure that national supply meets demand. Key questions that must be answered with respect to this emerging new electricity authority are: Who or what will carry decision making responsibility? What kind of governance structures will ensure that this new authority leads energy generation in the interests of all South Africans and not narrow and vested interest groups? Will the authority become a Chapter 9 organisation, and what checks and balances will be in place to ensure that it is not interfered with by politicians and tenderpreneurs? What mechanisms will be in place to ensure that the ISMO is integrated into the country’s wider economic developmental strategy?

With South Africa’s huge stores of underground coal and with the energy needs of our growing economy growing exponentially, coal will remain the country’s mainstream source of power for the foreseeable future. However, government’s commitment to develop an expanding mix of energy sources has opened the space for a new debate that can be anchored in two questions: What should this mix be? And, how open will the energy mandarins be to civil society interest groups such as Earthlife Africa and Groundwork as well as engagement with diverse private sector innovators?

Cabinet has just endorsed a flagship Energy Ministry project. The Solar Park project is to be located in Upington, Northern Cape, and the envisaged energy hub is being modelled along the lines of an industrial development zone without a harbour. The estimated costs are in the region of R150 billion. When completed and within ten years, the Solar Park, which may well be a public-private partnership, will provide 5 gigawatts (5 000 megawatts) of solar power to the national grid. Conceived as a high technology electricity generation project, the Solar Park project will provide long-term employment opportunities to many citizens of the Northern Cape. It will also pave the way for further partnerships that will form part of the Department of Energy’s Integrated Resource Plan 2010 and its Integrated Energy Programme.

As the new energy policy direction begins to find traction, it is the role of civil society, political and business organisations to raise the level of information and comprehension about this key delivery area. The starting point is that the future of energy supply concerns all of South Africa’s people. The Helen Suzman Foundation is one such organisation that is strategically positioned to bridge the gap between political decision makers and the wider community. On September 28, the Foundation will be holding a Roundtable discussion and hosting Minister Peters, Clinton Foundation Climate Change Initiative chief Ira Magaziner, Business Leadership SA chair, Bobby Godsell and Independent energy analyst Hilton Trollip at a Roundtable in Johannesburg. The Roundtable will be attended by a wide range of stakeholders in the energy industry and is open to the public. This event underscores the Foundation’s belief that it is crucial for channels of information concerning South Africa’s energy planning and development, to be created and sustained in the interests of the well being of all who live in this country, as well as in the region.