HomeNewsSupport for SA energy minister’s independent systems market operator plan

Support for SA energy minister’s independent systems market operator plan

The Free Market Foundation NGO has expressed its support for South Africa’s energy minister Ben Martins related to his statement to the country’s parliament urging the assembly to fast track key legislation to level the playing field between Eskom and independent power producers (IPPs). This will help create jobs, lower the price of electricity and release taxpayers’ funds, which are currently being diverted from providing services for the poorest in society.

The foundation says that Martins has recognised that the Independent Systems Market Operator (ISMO) bill must be implemented as soon as possible. This will allow the National Energy Regulator of South Africa (Nersa) to implement Department of Energy (DoE) regulations effectively and manage the electricity sector efficiently instead of state utility Eskom acting as player, referee and linesman by its sheer monopolistic dominance.

In its statement the Free Market Foundation says, “We fully support the minister in his quest to use the ISMO to further develop the IPP industry, increase the independence of Nersa and thereby unlock the vast power generation treasure chest for all of South and southern Africa.

Despite multiple and simultaneous challenges, the DoE and Treasury have done excellent work in managing South Africa’s renewable energy IPP procurement (REIPPP) process, preparing for the coal and base load programmes and advancing crucial legislation. “These achievements are finally putting South Africa on the road to modernising the electricity supply industry and getting rid of the apartheid dinosaur of Eskom being the exclusive electricity supplier,” the Free Market Foundation says.

“South Africa is desperate for growth and for the jobs that this growth will create. Industry needs affordable electricity prices and a reliable consistent supply. Introducing IPPs and a more competitive market in the mainstream energy market, not just in renewables, will achieve this faster and quicker than Eskom can ever deliver.

“Not only will the taxpayer benefit from not having to pay for Eskom’s projects, the tax base will increase due to an expanded, more inclusive economy. This will enable the government to provide more and better services for all especially the poorest in society who are currently subsidising Eskom’s protracted new build programme.

“Finally it seems that the government has realised that IPPs can provide investment opportunities, save the cash-strapped Treasury from this task, and support Eskom in dealing with its generation shortages. Keeping the lights on can and should be a partnership between IPPs and Eskom whose credit rating, as with the successful REIPPP programme, can only improve.

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