Extraordinary measures are needed to prevent power failures but Eskom will not enable this by letting go of its monopoly over power generation, a legal expert said on Monday.
“Eskom is not prepared to let go of the power it harnesses as a monopoly in electricity generation. Yet Eskom is equally aware of its inability to produce sufficient electricity to avoid these rolling blackouts,” said Happy Masondo, director at Werksmans Attorneys, in a statement.
The medium-term risk mitigation (MTRM) project team established by the department of energy has produced a national plan to deal with the shortage of electricity in the immediate medium-term, from 2011 to 2016.
This plan is part of the second integrated resource plan.
The MTRM project team has said that unless extraordinary steps are taken to accelerate the introduction of the independent power producers (IPPs), there will be power failures from 2011.
“This declaration provides very little comfort to the South African consumers … who are acutely aware of the underlying problems of … Eskom, the national electricity utility, which continues to be characterised by contradictory or conflicting behaviour,” said Masondo.
At the moment, Eskom has a maximum capacity of 41Â 000 megawatts while the country demands about 37Â 000 megawatts.
Extra money to sustain Eskom
Government announced earlier in the month that Cabinet has approved a R20-billion equity injection for Eskom over three years in a bid to strengthen the utility’s finances and tame tariff increases.
The money will have to be found as part of the regular budget process.
This leaves a reserve margin of about 10%, which is about half of what is internationally taken as acceptable, said Masondo.
Eskom and the Department of Energy are not keen on the acceleration of IPP or non-Eskom power generation.
“Instead, both Eskom and the [Department of Energy] have promised to move away from the unworkable single-buyer office (SBO) model.
“As currently contemplated Eskom is the SBO to purchase all the electricity produced by IPPs, and to sell such electricity to the consumers.”
Masondo said it seemed “short-sighted to continue to have Eskom in the driving seat of such a process when all indicators point to the need for South Africa to break the monopoly of the national utility”.
The Department of Energy should “allow the multitudes of IPPs lining up to make the energy production more competitive to operate within a free-market economy”.
“The simple and single reason is that Eskom is already crumbling under the weight of the existing energy crisis, how does it expect to add to its load before it sheds some of the weight causing it to crumble?” asked Masondo.
The IPPs should instead be allowed to generate electricity and sell it directly to consumers, instead of going through Eskom, argued Masondo.
Medupi: Brought to you by the World Bank
The World Bank approved a controversial $3-billion loan for the Medupi coal-fired power plant in in April, to the discomfort of a few members of the international community.
The United States, Britain, The Netherlands, Norway and Italy abstained from voting on the loan, thus showing their opposition without taking the less-diplomatic action of voting “no”.
Eskom was unavailable for comment. — Sapa