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A great degree of uncertainty over South Africa’s renewable energy procurement programme has made international players shaky about investing in the sector. However, this situation was resolved recently when the South African National Energy Regulator (NERSA) concurred with the Department of Energy’s (DoE’s) proposal to abandon the renewable energy feed-in tariff (REFIT)… (more)
by Chris Yelland, EE Publishers
On 23 August 2011, EE Publishers hosted an open panel discussion and debate in Midrand, entitled “Renewable Energy in South Africa – going backwards or forwards?” At the debate, key players in the renewable energy (RE) sector of South Africa covered the background on where the country finds itself now, as well as the road ahead in the implementation of the ambitious renewable energy targets detailed in the national integrated resource plan for electricity, IRP 2010 – 2030. This will involve the installation of some 9200 MW of wind generation capacity, 8400 MW of solar photo-voltaic (PV) capacity, and 1200 MW of concentrating solar plant (CSP) capacity by 2030… (more)
The South African Wind Energy Association (SAWEA) are looking forward to the national energy regulator’s imminent announcement of the revised renewable energy feed-in tariffs and see this as a positive step in the implementation of renewable energy in South Africa. However, SAWEA are concerned that the Department of Energy’s intention to pursue a competitive bidding process for the first rounds of South Africa’s renewable energy procurement could adversely affect investor confidence and destroy South Africa’s nascent renewable energy industry… (more)
Phindile Nzimande, former CEO of EDI Holdings (Pty) Ltd, has been appointed CEO of the National Energy Regulator of South Africa (NERSA) with effect from 1 May 2011. This follows a decision by the cabinet announced in December 2010 to disband EDI Holdings by 1 April 2011… (more)
The National Energy Regulator of South African (Nersa) has approved the introduction of preferential rates for those who change behaviour and invest in solutions for reduced energy consumption. Those households that invest in solar water heating can not only take advantage of the subsidy of up to 40% which Eskom is offering on such equipment, but can also further reduce their exposure to higher energy costs through the preferential rate being offered… (more)
by Chris Yelland, managing director, EE Publishers
Phindile Nzimande, former CEO of EDI Holdings (Pty) Ltd, has been appointed CEO of the National Energy Regulator of South Africa (NERSA) with effect from 1 May 2011. This follows a decision by the cabinet announced in December 2010 to disband EDI Holdings by 1 April 2011… (more)
It is well known that the price of electricity in South Africa has been too low for years. The generation capacity crisis in 2008 prompted a review of Eskom’s build programme and associated funding plan. The original expectation was that there would be a short-duration adjustment to bring prices to the correct level, and thereafter electricity prices increases would follow inflation… (more)
by Chris Yelland, managing director, EE Publishers, www.eepublishers.co.za
Once again, public sector governance issues, and battles between the CEO, the board and the responsible minister have rocked South Africa. Eskom, SAA, Transnet, the SABC… and now, in the latest saga, the National Energy Regulator of South Africa (NERSA). On 15 November 2010, Chairperson Cecilia Khuzwayo indicated that the regulator had suspended its CEO, Smunda Mokoena, for “alleged gross transgression of NERSA’s code of conduct”. Whilst official spokesman Charles Hlebela would not be drawn on the specifics, an article in The Times on 15 November went a step further, quoting a source alleging that that “quite recently he (the CEO) chaired a meeting completely drunk”, and that “he had a drinking problem that was getting out of hand”… (more)
Reliable sources have revealed that the cabinet has decided to withdraw a bill published on 17 June 2009 proposing an amendment to the constitution of South Africa in respect of the existing entrenched rights and obligations of local government entities (i.e. municipalities) to distribute electricity. This decision by the cabinet is said to be the precursor to the disbanding of EDI Holdings (Pty) Ltd by 1 April 2011. EDI Holdings is a state owned company that was established by government on 1 July 2003 to project-manage the restructuring of the EDI… (for more see http://www.eepublishers.co.za/view.php?sid=23975)
An article by NUS Consulting “ Highest planned electricity tariff increase” on page 16 of the August 2010 edition of Energize magazine, indicated that the Ekurhuleni Metropolitan Municipality would implement the highest electricity tariff increase of all electricity distributors. This article by Ekurhuleni Metropolitan Municipality, in response to the article, refutes this claim… (more)
by Mike Rycroft, editor of Energize
This article was first published in Critical Thinking Forum, a supplement to the Mail & Guardian, www.mg.co.za.
Three announcements in the last few weeks have created new hope that the long-awaited renewable energy (RE) programme will get underway, namely: the request-for-information on renewable energy projects from the Department of Energy (DoE); the announcement by the minister of energy of the establishment of a solar park in the Upington area; and the release of the draft integrated resource plan for electricity (IRP2010) for public comment… (more)
After gazetting a flawed and widely criticised 3-year interim electricity integrated resource plan (IRP 1) on 31 December 2009, well after Eskom had submitted its initial (45% pa for 3 years) and revised (35% pa for 3 years) multi-year price applications to NERSA in the second half of 2009, the DoE is now franticly working on the long overdue real thing – a 20-year national integrated resource plan for electricity (IRP 2) as required in terms of the National Energy Act of 2008, the Electricity Regulation Act of 2006, and the Electrical Regulations on New Generation Capacity of 2009… (more)
by Chris Yelland, EE Publishers
On 16 April 2010, Fin24 sent out a report that may have startled some, and sent shudders through ideological die-hards within the Tripartite Alliance.
The article was apparently based on discussions with Eskom’s new finance director, Paul O’Flaherty, and human resources director, Bhabhalazi Bulunga. It stated that “Eskom is planning a major restructuring, which could involve a partial privatisation and a major shake-up of its labour force”, and that “the company may be split up, and certain of its assets privatised, in a similar fashion to that of arms utility Denel”.
The very same day, this was promptly and vehemently denied in a press release from Eskom’s media desk, in which O’Flaherty is quoted as saying that “Eskom is looking at standardising and streamlining its systems and processes across the business. We have had no discussions about reducing our workforce and have not made any changes to our labour policies”. The press release stated categorically that Eskom has no plans of restructuring as outlined in the Fin24 article.
Two apparently contradictory reports? Let’s take a closer look at the three pillars of Eskom’s business – generation, transmission and distribution – to try and understand what’s actually going on here… (more)
by Chris Yelland, EE Publishers
After gazetting a flawed and widely criticised 3-year interim electricity integrated resource plan (IRP 1) on 31 December 2009, well after Eskom had submitted its initial (45% pa for 3 years) and revised (35% pa for 3 years) multi-year price applications to NERSA in the second half of 2009, the DoE is now franticly working on the long overdue real thing – a 20-year national integrated resource plan for electricity (IRP 2) as required in terms of the National Energy Act of 2008, the Electricity Regulation Act of 2006, and the Electrical Regulations on New Generation Capacity of 2009… (more)
Many of the presentations given at the NERSA public hearings on the MYPD application point out the pain that high tariff increases will bring on individual sectors and the whole economy. Figures estimated give unemployment losses of from 200 000 to 500 000. It could hold back the recovery from the recession, require interest rates to be kept high and put hundreds or thousands of small businesses out of business. With such massive negative consequences from a decision by NERSA and Eskom they must take the alternative solutions offered very seriously… (more)
While everybody was focusing hard on the NERSA price increases for Eskom, a very important announcement in the decision paper went almost unnoticed. Appended almost as an afterthought to the price hike announcement were several tables setting out “inclining block tariffs” for residential customers (adding RIBT to the lexicon of an industry not lacking in arcane acronyms). I doubt very much, Sir, that many customers studied this closely after having survived – or not – the shocking numbers in the first two tables… (more)
The National Energy Regulator of South Africa (NERSA) at its meeting held today, Wednesday, 24 February 2010, approved an allowed revenue of R85-billion for 2010/11, R109-billion for 2011/12 and R141-billion for 2012/13. This will result in the average standard price of 41,57 c/kWh, 52,30 c/kWh and 65,85 c/kWh for 2010/11, 2011/12 and 2012/13 financial years respectively. This will result in a percentage price increase of 24,8% on the average standard tariff from 1 April 2010 followed by another average increase of 25,8 % from 1 April 2011 and a further price increase of 25,9% from 1 April 2012.
While Eskom has sent the nation into a tailspin by asking for massive electricity tariff hikes over the next three years, the government has failed to make public the plan upon which the increase is based – even though it is required to do so by law. And this just before the national energy regulator, Nersa, begins public hearings on January 11 on Eskom’s controversial bid for a 35% per year increase in the price of electricity compounded over the next three years… http://ow.ly/U9gi
Originally the South African Grid Code was developed with a view that the South African Regional Electricity Distributors (REDs) would have come into being rapidly, making the regulation of the industry much more efficient and simpler.With the delay of REDs, NERSA had to review its regulatory strategies to suit the current industry environment. The Distribution Code is also driven by the need to ensure standard rules for participation in the electricity industry especially from independent power producers… (more)
The renewable energy industry forms part of a greater social contract, a contract between all members of society. The contract entails the move from unsustainable energy sources, to renewable energy sources – at a rate commensurate with the (reasonable) cost and sustainability of this energy source migration. This industry should not become or be monopolised by governments, parastatals or even large private entities – for the purposes of becoming a cash-cow. Policy, ideally, should ultimately empower individuals to become self-sufficient in providing for their own energy needs – after all, we all own a little piece of sunshine… (more)
Informed sources within Eskom Generation have indicated to EE Publishers that significant further cost increases can be expected for both Medupi and Kusile power stations.
In the case of Medupi, provision has been made at a cost of “several hundred million rands” in the current R125-billion price tag to ensure that the plant is ready for the incorporation of flue-gas desulphurisation (FGD) plant. The FGD plant itsself will be installed under a seperate contract at the first general overhaul cycle of Medupi power station in about 2018.
Kusile, on the other hand, will have FGD plant installed from the beginning during the construction of the power station, and its cost is therefore included in the current overall R142-billion price tag. Further pushing up Kusile’s price will be a significant additional cost of interest during construction, as well as contract price escallation, resulting from construction delays and the moratorium on placing of contracts since December 2008 due to the absence of a funding plan for the Eskom new-build programme… (more)
The AMEU was recently approached for comment by the Treasury Department of a member municipality regarding some communication they had apparently received from NERSA. This followed some media reports (radio and internet, at least) on warrants being issued for the arrest of the municipal manager, the mayor and the financial head of Umsobomvu Municipality in Colesberg in the Northern Cape because they apparently ignored a court order prohibiting the practice of disconnecting consumers’ electricity because payments for other services were overdue… (more)
You are cordially invited to attend an open and interactive workshop, panel discussion and debate hosted by trade union, Solidarity. A panel of experts will discuss funding plans for Eskom and its MYPD (multi-year price determination) application to NERSA for an increase in the average price of electricity of 45% per annum for three consecutive years.
DATE: 3 December 2009
TIME: 09h30 for 10h00 to 13h00, followed by lunch, courtesy of Solidarity
VENUE: Centurion Lake Hotel, Centurion, Pretoria (directions below)
COST: No cost, free-of-charge
TIME: 09h30 for 10h00 to 13h00, followed by lunch, courtesy of Solidarity
VENUE: Centurion Lake Hotel, Centurion, Pretoria (directions below)
COST: No cost, free-of-charge
REGISTRATION: Click here to register online
Chris Yelland, managing director of EE Publishers, will act as the facilitator and chairperson for the discussion. The panel of experts will comprise:
- Chris Hart: senior economist at Investment Solutions, a provider of multi-manager investment portfolios, with assets under management of over R100-billion
- Andrew Kenny: consulting engineer, with degrees in physics and mechanical engineering, formerly of Eskom and senior research officer at the Energy Research Institute of the University of Cape Town
- Mike Schüssler: senior economist and partner of Economists.co.za, a specialist economics consultancy to government, business and industry
… (more)
Over the last 10 years the electricity reserve margin in South Africa, has been steadily declining, due to increasing demand for power and limited new generation capacity being commissioned. In 2006, regional load shedding was required due to network inadequacies and insufficient regional generation resources. In early 2007, the first incident of national load shedding occurred due to the inability to supply demand with the operational generation capacity… (more)
Sir
It is an incontrovertible fact that ever since that marvellous invention of that genius Faraday and that somewhat strange man Tesla, and that loud Yankee from Menlo Park, electricity has been harnessed for the greater good of man – and dare I say it, womanhood. Economies rise and fall not so much by the rise and fall of empires any longer, but by the price of electricity; nowhere more so than in a country that thrives on mines and heavy industry, smelters and furnaces. It is therefore all the more disturbing – disappointing? – in any case, outrageous, the way the price of electricity in your beloved country has escalated of late… (more)
An interview with Dr. Ian McRae, former Eskom chief executive and chairman of the NER
by Chris Yelland, managing director of EE Publishers
In this interview, Chris Yelland, managing director of EE Publishers, questions Dr. Ian McRae on the state of the electricity supply industry and the electricity issues facing South Africa.
Dr. McRae was chief executive of Eskom from 1985 to 1994, and was subsequently the first executive chairman and chief executive of the NER (National Electricity Regulator) from 1995 to 1997. It was during Dr. McRae’s time as head of Eskom Generation that the current fleet of large coal-fired power stations, the Koeberg nuclear power station, the hydro-electric power stations of the Orange River, and the Drakensberg pumped water storage scheme, were all built. In 1990, as Eskom chief executive, he also embarked Eskom on one of the world’s largest mass electrification programmes, under the slogan: “Electricity for all”.
Dr. McRae has written a book entitled “The test of leadership – 50 years in the electricity supply industry of Southern Africa”, published by EE Publishers. The first printing of the book was completely sold out, and the book is now in its second edition, available from EE Publishers, South Africa.
Read the full interview and get the answers to the questions:
- Dr. McRae, what has prompted you to speak out now on the electricity issues facing South Africa?
- What decisions or indecisions by government do you believe have contributed to the current electricity problems in South Africa?
- What do you believe is the role and responsibility of the Eskom board of directors in all this?
- As the first chief executive and chairman of the National Electricity Regulator in South Africa, do you think the Regulator has alleviated or accentuated the electricity problems facing the country?
- To what extent has inadequate planning, for example in the Western Cape, had on the security of supply of the country?
- What do you think has been the role of deficient coal procurement practices and coal supply in the problems experienced?
- Do you believe that there is a skills crisis in the electricity supply industry, and if so, what has been the impact?
- Do you believe that inadequate financial planning by Eskom and the responsible government departments is affecting the electricity supply industry and the country?
- So what should be done about it? Please can you give some pointers on what you think the leaders in the electricity supply industry should be doing?
… (more)
From the presentations and discussions at the SANEA “Action for Energy”, it was clear that very serious energy problems do exist in South Africa, and that greater efforts are required address and coordinate the currently inadequate research, policy, regulation, planning, funding, implementation and communication issues that are bedevilling the energy sector. These issues cut across all primary energy sources, including coal, oil and liquid fuels, gas, nuclear, hydro, wind, solar and biomass… (more)
The final determination of the renewable energy feed-in tariffs (REFIT) was announced on Tuesday 31 March 2009 at the National Energy Regulator of South Africa (NERSA) offices in Pretoria. NERSA electricity regulator, Thembani Bukula, delivered this long awaited ruling, which was originally scheduled for 9 March 2009, but was postponed to allow due consideration of the numerous submissions received in response to the consultation document issued by NERSA in December 2008 and the subsequent public hearings in February 2009… (more)
Audiocast: Ruling by NERSA electricity regulator Thembani Bukula (MP3 file)
Audiocast: Interview with Thembani Bukula by the editor of Energize (MP3 file)
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