After 15 gloomy years, SA urgently needs to flip the switch on its power policy
Our entire electricity regulatory environment is archaic and overly bureaucratic with Nersa largely a handbrake on investment and self-generation
2021 marks 15 years of load-shedding. Or, to put it more realistically, 15 years of rolling blackouts, broken promises, ratings downgrades and sheer incompetence and corruption on the part of the ANC government.
While much of the blame can be laid firmly at the feet of a bloated and dysfunctional Eskom, the reality is that the ANC government as a whole — from national to local level — has failed to keep the lights on.
At a local level, municipalities have employed incompetent and/or corrupt management, which has resulted in a complete failure to maintain distribution infrastructure. It is a sad truth that in towns and cities across SA we lack competent electrical engineers in municipalities capable of ensuring a safe and reliable electricity distribution infrastructure. When substations and transformers blow (often as a result of the load-shedding), municipalities frequently do not have the replacement parts to get the distribution system back up and running quickly — resulting in further lengthy blackouts, economic losses, and inconvenience to residents.
It is true that SA has embarked on a much-needed Integrated National Electrification Programme to connect power to residents across the length and breadth of the country. But the fact is that — as with so many other projects undertaken by this government — the back-end systems have not been put in place before new consumers are connected to the grid.
We have seen this before, with overburdened sewage treatment facilities because too many households have been connected without upgrading the treatment plant. And we see it with electricity generation, transmission and distribution, where thousands of new connections are made without providing additional generation, transmission and distribution capacity.
A further concern is the complete lack of consequences, or significant efforts to eradicate illegal connections. It is estimated that this has a negative economic impact on Eskom of about R1.3bn annually (according its 2016/2017 annual report), and in the region of R8bn to R12bn to the country’s economy (according to the SA Revenue Protection Agency). The damage such connections cause to local electrical infrastructure cannot be downplayed — overloading, shorts and other faults cause entire suburbs, townships and municipalities to be without power, sometimes for days on end.
Then there is the danger to human and animal lives: exposed live wires lying across open ground, often in puddles of water, have resulted in countless children being electrocuted.
It is a sad fact that SA, not 10 years ago a leading light in the renewable energy sector, has squandered that lead and all but destroyed its manufacturing capacity in this industry
A culture of non-payment and a lack of political will to resolve this crisis have resulted in the enablers of this illegal activity acting with near impunity. The City of Cape Town, under the DA, has successfully traced and prosecuted hundreds of cases of illegal connections, cable theft and bypassing of meters through its highly effective Copperheads law enforcement unit. This is a model that should be rolled out nationally.
It is estimated that the rolling blackouts we have been experiencing for the past 15 years cost the SA economy R1bn per stage per day. Since January 1, we have had more than a week (thus far) of load-shedding stage 2. That works out to a loss to our economy of R14bn in just the first month of the new year, at a time when we can least afford it. With roughly 11-million South Africans unemployed and international ratings agencies putting the spotlight firmly on Eskom and the country’s failure to provide a reliable electricity supply as the single biggest drag on our economy, surely the time has come to deal with this decisively?
We are now receiving reports of Covid-19 deaths in hospitals because the generators didn’t kick in quickly enough when load-shedding started. And what of the cold chain for the vaccines? If we cannot keep these sensitive medications refrigerated to the correct temperature we have no guarantee of their efficacy. Yet it appears that keeping the lights on is not a high priority for the government of the day.
The empty promises of the ANC go back 15 years. Various ministers, former president Jacob Zuma and President Cyril Ramaphosa have all misled the nation as to how long it will take to restore our electricity system to a reliable state. We can no longer believe them. The time has come to implement the 1998 white paper on energy — still SA’s defining energy policy.
It proposed introducing competition among suppliers and giving South Africans the right to choose their own electricity supplier. Yet every time this is mooted (even though it was adopted by the ANC and cabinet back in 1998), it is rejected as being “anti-transformation” and “promoting the interests of white monopoly capital”. The ANC government has forgotten the lessons of the past and imbibed the Kool-Aid of the radical left.
We need to incentivise investment in our electricity generation sector, both on a utility and consumer scale. From a utility perspective, it is vital that we make it easier for independent power producers (IPPs) to supplement the unreliable supply we receive from a bloated and dysfunctional Eskom. This entails easing the regulatory environment and providing a structured programme for the incentivising, licensing and monitoring of new IPPs.
It is a sad fact that SA, not 10 years ago a leading light in the renewable energy sector, has squandered that lead and all but destroyed its manufacturing capacity in this industry. But the potential remains, as our country is uniquely positioned with abundant natural resources to maximise its utilisation of the green economy.
From a consumer perspective we should be incentivising homeowners to put up solar panels and geysers. One of the most shameful examples of government mismanagement and wasteful expenditure was the stalling of the National Solar Water Heater Programme for more than five years, while the geysers intended for indigent households languished in costly storage. The DA has proposed a R75,000 tax rebate for households that install solar panels, to ease the demand on the national grid.
This is already provided for in the Income Tax Act and would merely need to be incorporated in the national budget and tax code. And we must ease the registration and licensing requirements for such installations.
Our entire electricity regulatory environment is archaic and overly bureaucratic. The National Energy Regulator of SA (Nersa) is largely a handbrake on investment and self-generation. Businesses wanting to invest in generation for own use, municipalities wanting to procure their own supply, and IPPs wanting to create large-scale generation for sale to the grid, all report lengthy delays in licensing processes and unnecessary nit-picking to restart the application process from scratch.
Much has been made of mineral resources and energy minister Gwede Mantashe’s amendments to schedule 2 of the Electricity Regulation Act. The reality is that these have been largely cosmetic and not followed through with practical implementation that would rapidly enhance our generation capacity or the ability of consumers, businesses and municipalities to self-generate.
Instead, Mantashe is dead set on a new nuclear build of 2,500MW and the pursuit of new coal generation, neither of which is likely (or even particularly desirable) in the current economic climate.
SA urgently needs a reset in terms of its energy policy. The 1998 Energy White Paper, now 23 years old, is a good starting point. Let’s get the experts around a table and map out a truly modern, visionary and sustainable plan to get the power flowing and keep the lights on. And most importantly: let’s implement it. If that were to occur, all South Africans would get behind it.
• Mileham is DA shadow mineral resources and energy minister.
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