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On behalf of the National Energy Regulator of South Africa, NERSA, it is my pleasure and honour to be given the opportunity to say a few words at this Convention under the theme of “Supporting SA infrastructure and service delivery objectives.” This is indeed an important theme to explore over the next three days, particularly in light of the current infrastructure development programmes on which our country has embarked upon as well as quality of supply challenges as they are being experienced by customers. It is true that almost twenty years into democracy, the country still faces the triple challenges of poverty, unemployment and inequality. The country still remains a highly unequal society where too many people live in poverty and very few work. To eliminate poverty and reduce this inequality, there is an urgent need to grow the economy faster and in ways that benefit all South Africans… (more)

Most South African electricity utilities, especially within municipal jurisdictions, only monitor performance and compliance requirements of their business processes against the requirements of the Integrated Development Plan (IDP). Other important business aspects are ignored because they are not mentioned in the IDP… (more)

This month’s winning letter proposes a reason for the poor results in NERSA’s audit of municipal electrical infrastructure, while another letter uses the illustration of an old inefficient motor car to show how electrical energy is wasted in everyday activities… (more)

NERSA has released the results of licence condition audits of 18 municipalities which were undertaken in 2011 and 2012. Results show a range of compliance from extremely poor to excellent, with deterioration of plant featuring prominently in all cases. The question arises of what actions will be taken as a result of the audit and how can these municipalities be assisted to improve compliance… (more)

There are currently over 4-million prepaid electricity customers in South Africa and demand has been growing steadily due to their convenience for both customer and the supplier of electricity. Installations are now being extended to townhouse developments and blocks of flats… (more)

Board member of the National Energy Regulator of South Africa (NERSA), Thembani Bukula, addressing a SANEA meeting at Sasol’s offices in Rosebank on 16 April 2013, explained how NERSA determined municipal electricity price increases following the increase Eskom has been allowed to charge the municipalities. Eskom supplies approximately 60% of the electricity it generates to 40% of customers in South Africa, while municipalities supply 40% of the electricity to 60% of the customers… (more)

In order to understand the application by Eskom to the National Energy Regulator of South Africa (NERSA) for a review of the special electricity pricing agreements between Eskom and BHP Billiton for Hillside Potlines 1, 2 and 3, and the powers, authority and duties of the Regulator in such matters, it is necessary to look at the relevant South African legislation covering the regulation of electricity and its pricing… (more)

The third multi-year price determination (MYPD3) by the National Energy Regulator of South Africa (NERSA) for the five-year period commencing 1 April 2013 has further revealed a picture of the national electricity utility, Eskom, in distress. On the basis of the Treasury’s instruction that there would be no further government guarantees, subordinated loans or equity from the sole shareholder (government), Eskom has been between a rock and a hard place… (more)

The past two weeks have seen South Africans speaking in one voice. The accents of both messages and speakers may have differed at the NERSA hearings investigating Eskom’s MYPD3 application to increase the cost of electricity, but there was a broad consensus that the increase of 16% for the next five years is unsustainable for the economy… (more)

The third multi-year price determination (MYPD3) by the National Energy Regulator of South Africa (NERSA) for the 5-year period commencing 1 April 2013 has further revealed a picture of the national electricity utility, Eskom, in distress… (more)

The National Energy Regulator of SA (Nersa) and Energy Minister Dipuo Peters are to be congratulated for climbing yet another rung on South Africa’s ladder to a sustainable energy future. Sustainable Energy Society of Southern Africa (SESSA) Ombudsman, Carel Ballack said it had taken over eight months but power licences have now been approved for the 28 successful renewable energy bidders announced in December last year by Minister Peters… (more)

While government departments and Eskom are forging ahead with plans and programmes to ensure that all is in place to facilitate meeting the planned 9600 MW of nuclear power generation included in the IRP 2030, industry, who will have to provide the plant, are waiting in the wings, hamstrung by a lack of commitment to plans. Government has the National Nuclear Electricity Executive Co-ordinating committee (NNEECC or NEC2), and the Nuclear Energy Technical Committee, who advises the above, and both are busy with self-assessment exercise to establish the readiness of the country to proceed with the plan… (more)

The introduction of inclining block tariffs (IBTs) is benefitting low income domestic customers. This is according to the findings from a study conducted by the National Energy Regulator of South Africa (NERSA) into the impact of the implementation of IBTs on residential customers… (more)

NERSA has recently published on its website, regulatory rules for use-of-system (UOS) charges to facilitate transmission and distribution system access to “Sellers of the new generation capacity”. The “Electricity Regulations on New Generation Capacity” dated 04 May 2011 (Government Gazette No. 34262) provide the framework for the procurement of new generation capacity but are only applicable to such procurement by organs of state and not for wheeling arrangements… (more)

Aggreko and Shanduka Group have announced a project to provide a 107 MW power plant, which will use gas from Mozambique’s Temane gas field, to provide an interim power supply to South African power utility Eskom and its Mozambican counterpart, Electricidade de Moçambique (EDM). The project – following from discussions initiated between Aggreko, Shanduka Group, Eskom and EDM early in 2011 and approved by South African energy regulator NERSA and the country’s departments of energy and public enterprise – will come on stream early in the third quarter of this year… (more)

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)

by EE Publishers staff reporter

There’s been a lot of media coverage of the pending World Bank loan of US$3,75-billion for Eskom. According to analysts, it is unlikely that the loan will not be granted. But who is the World Bank, how does it make its decisions, and what are the stakes?

The current funding shortfall for Eskom’s new build programme (Medupi, Kusile and Ingula) will only partially be met by the World Bank loan, and one must not lose sight of what funding is still to be secured, namely: the $3,75-billion (R27-billion) World Bank loan itself; the R8,5-billion additional borrowings required as per MYPD2; the cash shortfalls of R14-billion and R7,9-billion as per MYPD2; a price increase of some R17-billion for Medupi in coming years; and R20- to R40-billion private equity funding for Kusile. This gives a total current funding shortfall of R94- to R114-billion!… (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
 
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:

  1. Dr. McRae, what has prompted you to speak out now on the electricity issues facing South Africa?
  2. What decisions or indecisions by government do you believe have contributed to the current electricity problems in South Africa?
  3. What do you believe is the role and responsibility of the Eskom board of directors in all this?
  4. 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?
  5. To what extent has inadequate planning, for example in the Western Cape, had on the security of supply of the country?
  6. What do you think has been the role of deficient coal procurement practices and coal supply in the problems experienced?
  7. Do you believe that there is a skills crisis in the electricity supply industry, and if so, what has been the impact?
  8. Do you believe that inadequate financial planning by Eskom and the responsible government departments is affecting the electricity supply industry and the country?
  9. 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)

Audiocast: Keynote presenter, Dr. Benny Mokaba, executive director responsible for Sasol’s SA energy cluster, speaks out on energy policy, regulation, investment and sustainability in South Africa (MP3 file)

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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