Independent network is the key to the energy crisis

A  recent article  by SAPVIA’s chairperson, Davin Chown, puts into perspective the unacceptable situation that we again face with regard to our electricity supply in South Africa. The Minister of Public enterprises, whoon the 26th February was heard on 567 Cape Talk radio claiming that all government departments are working furiously to rectify the situation, failed to acknowledge the role of the private sector in solving our electricity crisis. The only new generation capacity added to our network in the last three years has been funded and is owned by private companies. Projects have been constructed on time and on budget and amount already to several hundred mega-watts.

As Chown correctly points out, there are 1000s of MWs of projects (renewable and otherwise), many with all the required permits and approvals, that are ready to construct and generate energy. There are also millions of consumers in South Africa that are desperate for secure and stable power that is not prone to hyper-inflationary escalations and load shedding.

Why can this supply and demand not be connected?

Because Eskom and the local municipalities own and regulate the connection network – and they don’t want to give that up.

Eskom encourages energy savings to save face, but as the minister himself pointed out, why would Eskom encourage people to save energy unnecessarily when it is their business to sell it? And why would a business open the door to a competitor to enter the market?

The solution to our energy crisis is the independence of the transmission and distribution network. Like in all aspects of state intervention, the government should facilitate not operate. That way independent power generators and power utilities can negotiate and sell energy to their customers, and their customers have the option of choosing another company if the service is bad. Regulation on pricing and quality of supply is required and can be enforced through control over the delivery network.

The network operator can charge a cost reflective fee, which government can subsidize if required, whilst still keeping the playing field equal between generation technologies and utilities.

The current “wheeling” and “bi-directional energy”  programs published by both Eskom and Municipalities, when investigated with any seriousness,  are nothing more than black holes of fruitless bureaucracy. Apart from a handful of “pilot” cases,  there is no evidence of these concepts in action. Even if there was, the proposed prices being charged to use the network are exorbitantly high.

Two pieces of legislation are urgently required, one the Independent System Operator’s Bill (ISMO) and two, legislation requiring municipalities to allow private generators to deliver energy to their customers using the distribution network.

Certain proponents who’ve seen the light  have been working on an Independent System Operator’s bill for several years, but unsurprisingly it gets caught up in parliament, where the interests of state owned enterprises seem to take preference over economic growth and development of the private sector. It is time we put pressure on our parliament and our legislators to do the right thing and open the door to more functional and reliable energy future. Chris Haw, Managing Director, SOLA Future.​