While the British government is making climate-change combat its priority, South African officialdom is squabbling over who should administer a green tax worth up to R600-million a year.
Electricity users pay between R400-million and R600-million annually as a tariff on electricity usage to promote energy saving. A directive from the minister of minerals and energy says the bulk of this money should go to the Central Energy Fund (CEF) where a set of new agencies are charged with moving the economy to a more green footing. But Eskom is refusing to give up the money.
Having Eskom control these funds is like requiring SABMiller to promote alcohol abstinence, CEF head Mputumi Damane told a committee of parliamentarians two weeks ago.
Eskom has in part been using these funds to switch electricity users in Cape townships to gas after the sustained power outages in the Western Cape last December. But later gas shortages saw some township residents requesting to switch back to electricity.
Data supplied by the World Wildlife Fund (WWF) shows that South Africa is a significant contributor to global warming, being a disproportionate emitter of greenhouse gases.
The WWF says South Africa’s carbon dioxide production doubled from 1980 to 2004 and is higher than that of Brazil, which has four times the population. It says South African emissions per capita are half that of the United States and slightly lower than Russia’s, but three times higher than China’s.
Critics have said that part of the problem is that Eskom plays the role of both poacher and gamekeeper. Separate agencies have been set up at the CEF, in cases manned by former Eskom staffers who remain on the Eskom payroll.
These have been mandated to fast-track the development of greener environmental policies. But notwithstanding a ministerial directive from minerals and energy to this effect, funds that could be used by the CEF agencies to promote energy conservation and renewable technologies, remain under Eskom’s control.
At least one minister, public enterprises’s Alec Erwin, appears to support the status quo. Erwin’s spokesperson, Gaynor Kast, told the Mail & Guardian recently that “Eskom is not meant to pay any money [to the CEF]”.
“Of course they are resisting, but we will take it away from them,” Damane told the parliamentary committee on minerals and energy.
The squabble has come to light as a 600-page report on climate change was tabled in the UK. The Stern report warns that by not taking urgent action to combat climate change, the world faces economic catatrosphe. (See pages 4 and 5)
South Africa, with its energy intensive (and inefficient) economy, will run out of generation capacity by 2008. About R60-billion will be spent on new generation capacity between now and 2015. But if we succeeded in reducing energy demand by 15%, as targeted by government, it could amount to a R9-billion saving, according to the WWF.
South Africa’s energy efficiency programme, Demand Side Management (DSM), is at present being implemented by Eskom. Electricity users fund the programme through a tariff system. But as Eskom both implements the DSM programme and supplies electricity, there is a clear conflict of interest, as acknowledged by Eskom chief executive Thulani Gcabashe in 2004.
Gcabashe and then-minister of minerals and energy Phumzile Mlambo-Ngcuka agreed two years ago that the DSM funds should be transferred to another entity. A ministerial directive was issued to the CEF, instructing it to set up the National Energy Efficiency Agency. Another was issued to the National Energy Regulator, instructing it to transfer responsibility for DSM to the new agency, including the annual budget allocation for DSM funding. Eskom, which is controlled by the department of public enterprises, received a letter explaining the change in policy.
But Eskom has refused to hand over the funds. CEF head Damane told the parliamentary committee on minerals and energy, during hearings into the CEF’s finances, that Eskom was not complying with the policy. “Eskom gets the levy for Demand Side Management. There is a ministerial directive that they must stop and give it to us. But they don’t. Eskom is big and they don’t listen to anyone … Eskom is bullying all of us.”
“They [Eskom] are losing 40% of the power just transmitting it from Mpumalanga to Cape Town. Can you give it [the energy efficiency mandate] to them? Of course not,” Damane told MPs.
Eskom did not deny the allegations.
“There has been no transfer of the funds from Eskom to the CEF. Currently, we are engaged in a dialogue with CEF with the view to facilitating the transfer of funds in question. We are also wanting to discuss several other issues relevant to the transfer of the energy efficiency programme,” Eskom spokesperson Fani Zulu told the M&G recently. He did not clarify what the other issues were.