Monday, September 27, 2010

SA: Is our new energy policy good enough?

by Rachel Browne and Na-iem Dollie*|
27 September 2010

Is our new energy policy good enough?

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.

*This article was written jointly by Rachel Browne, a researcher at
the Helen Suzman Foundation, and Na-iem Dollie, an independent
consultant in the Office of the Energy Ministry's Special Adviser.

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