29 September 2010 – Government is concerned that investment in electricity generation by the private sector has not happened at the magnitude originally envisaged, Energy Minister Dipuo Peters said on Tuesday.

Speaking at a wind energy seminar in Johannesburg, she said government had committed itself in 2006 to a target of a minimum of 30 percent participation by the private sector in the electricity generation industry.

This commitment was born out of the realisation that it was critical for Independent Power Producers (IPPs) to complement electricity generated by national utility, Eskom, to enable the country to achieve the goal of ensuring energy security.

"We have, however, noted with serious concerns that investment by the private sector has not happened at the magnitude that was originally envisaged," Peters said.

"As government, we are continuously evaluating our policies and are working tirelessly to create an environment that is conducive for IPPs to enter the electricity market and provide the much needed power to complement and boost up Eskom’s capacity."

At the beginning of the year, President Jacob Zuma established an Inter-Ministerial Committee (IMC) on Energy to finalise policy decisions on this matter.

Work had progressed well in this regard and the IMC was in the process of reporting back to Cabinet on its proposals, she said.

The energy department was in the process of facilitating the establishment of an Independent System and Market Operator (ISMO) to facilitate the procurement of power from IPPs.

The ISMO was intended to level the playing field and eliminate conflict of interest between the buyer and the seller of electricity in a manner that protected all players from potential market abuse.

The department was working closely with other key government institutions, such as the National Energy Regulator, Eskom and the National Treasury to ensure that processes for IPPs were streamlined, Peters said.