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Energy Crisis was foreseen

16 September 2009

eskom-logoRemember the rolling blackouts and load shedding we experienced at the beginning of 2008? It was the reason we set up this blog.

Well, it turns out that Eskom got expert analysis six months before pointing out the rampant mismanagement and incapacity at Eskom’s Generation Primary Energy (GPE) – responsible for keeping the (coal) fires burning. Read the rest of this entry »

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From bonuses to bailouts – Eskom’s financial mismanagement

28 August 2009

Eskom’s negative financial results exposed the fallacy that the ANC government was able to run state owned enterprises (SOEs) in “the public interest”, the Democratic Alliance said on Thursday.

The parastatal last week reported a R9.7 billion loss for the last financial year.

In 2007/8 Eskom had to be bailed out to the tune of R60 billion.

“It appears that Eskom needs an additional R 283 billion for its capital expenditure program,” said DA Shadow Minister of Public Enterprises Manie van Dyk. “As a consequence, it seems likely it will once again have to be bailed out, a cost that will be borne by the South African taxpayer.”

Van Dyk said Eskom’s results called into question whether government was either willing or able to manage SOEs to the benefit of the public, and whether it was not simply a way to entrench the system of cronyism that was eating away at the social fabric.

“The awarding of bonuses to senior management, despite the financial crisis, exacerbates Eskom’s situation,” he said.

Click here to read more >>

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DA condemns tariff hike, calls for sector reform

25 June 2009

Today’s decision to grant Eskom a 31.3% tariff rise for the 2009-10 financial year illustrates the failure of the ANC’s policies that have promoted an uncompetitive, inefficient energy sector, says DA Shadow Minister for Energy, Sej Motau.

“The Democratic Alliance (DA) has stated repeatedly that a tariff hike of this nature will have vastly detrimental consequences for South Africa’s poorest citizens, and we are deeply concerned that government is sitting idly by while the fundamental problems within Eskom, and the energy sector more broadly, are not adequately addressed.”

Read the full statement >>

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Further bad planning by Eskom leaves the South African economy holding the torch

17 March 2009

2008 was a calamitous year for Eskom, in which it failed to keep the lights on regularly. The announcement today that Eskom has yet to finalise its electricity tariff application for the next financial year is clear evidence that its poor corporate planning record has continued into 2009.

The electricity supply and its pricing are crucial in determining the competitiveness of our economy. This uncertainty has a hugely detrimental effect on service delivery and on South Africa’s attractiveness as an investment destination.

Read the full statement on the DA’s website >>

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Video – Helen Zille endorses Earth Hour

9 March 2009
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Renewable energy proposal shelved by ANC

24 February 2009

The legislative proposal for a feed-in-tariff on renewable energy is an excellent initiative that was brought to parliament by my colleague, Ruth Rabinowitz of the IFP, last year. Although it is in her name, the initiative is supported by myself and Lance Greyling MP of the ID, as well as hundreds of private citizens and business stakeholders. In fact, I have personally corresponded with over 400 businesses and individuals who support this proposal.

Regrettably, the proposal has now been shelved. The private members’ legislative proposals committee gave it tentative support and recommended that an ad-hoc committee be established to further examine our proposal. This never happened, but a debate on the matter was held in parliament last week. The proposal is for the moment dead, but we intend to revive it when the new parliament is established in May.

This legislative proposal was opposed by the Department of Minerals and Energy because it believed that the required legislation for a feed-in-tariff was already in place. As I said in the debate last week, the question then is why has this country made practically no progress on renewable energy in the last decade. It is because the South African government is fixated with large state-driven energy projects which limit choice and have, in effect, contributed to undermining GDP growth. Further, it is because our state energy planners believe that, just because we have 200 years of coal reserves available, we have to use these resources. Not only is this latter view nonsense, it is irresponsible.

The subject of the appropriate role of the state is often debated in parliament, yet this debate has not been sufficiently directed at the role of the state in the energy economy. Naturally there is an important role for the state in conducting integrated energy planning, something which has been severely lacking over the last decade, and which has been a major cause of insufficient generating capacity during several periods over the last three years. However, the state, more particularly Eskom, needs to understand that it cannot be the sole producer of electricity to satisfy the needs of a growing economy – it does not have the skills, nor does it have access to the required capital.

The DA believes that the state’s primary role, besides planning, is to appropriately regulate the energy sector and to provide incentives for an increased number of players in electricity production. Yes, it will be necessary for some time to come that Eskom remains the primary generator of electricity. However, it is the policy of the DA that the natural monopoly of transmission needs to be unbundled from the potentially competitive activity of generation. Eskom’s transmission division must be transformed into a separate state-owned company to ensure that all sector participants receive equal access to the national grid.

And this is where the feed-in-tariff for renewable energy will truly thrive. It will allow a massive increase in micro-generation, increasingly giving individuals, businesses, and rural communities that are currently off-grid, improved energy independence. The feed-in-tariff for renewable energy is a sensible and progressive policy.

Renewable energy must not be treated as an afterthought in energy planning. It must become central to energy planning. The DA believes that a target of 15% of electricity generation from new renewable energy sources is achievable by 2020. Not only will a renewable energy revolution help to mitigate climate change, it will also be a source of new “green” jobs.

A 2008 report from World Watch entitled “Jobs in Renewable Energy Expanding” shows the potential for new job creation. There are, for example, 259 000 jobs in the renewable energy sector in Germany.

South Africa can be one of the top ten producers of renewable energy in the world, and we can create new jobs in the thousands as well.

The feed-in-tariff for renewable energy is the way to stimulate this market. But not only is the existence of the tariff important, but the tariff must be set correctly. NERSA currently has proposals on a feed-in-tariff up for discussion. We must thank them for trying; but regrettably, the tariff proposals are far too low and will not offer the required stimulus.

I believe that parliament must be centrally involved in providing a specific legislative framework for renewable energy and that the state, whether DME, Eskom, or NERSA, should not be left alone to manage these matters. Hence the proposal will be revived at the earliest possible opportunity.

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DA MP joins cross party initiative to introduce feed in tariffs for renewables.

29 October 2008

Renewable energy is much spoken about in South Africa, although there never seems to be any progress. It is frustrating to watch the South African government plan massive investments into coal and nuclear which will lock this country into a particular (mostly uncertain) energy future while there are at the same time numerous other technologies that need a small leg up, but can then flourish on their own.

A couple of MPs from various parties have decided to take a stand on this matter. Dr Ruth Rabinowitz (IFP), myself (DA), Lance Greyling (ID) and Judy Chalmers (ANC) have come up with a private members legislative proposal aimed at introducing Feed In Tariffs for renewable energy production. The proposal has gone forward in the name of Dr Rabinowitz. Read the rest of this entry »