Eskom’s Andrew Etzinger, a panellist at the Mail & Guardian‘s Critical Thinking Forum on energy efficiency held in Johannesburg last week, brought a strong element of reality to proceedings by telling the audience that the utility was back to the crisis levels of January 2008 in terms of electricity demand.
He said that in terms of reserve margin, the difference between demand and capacity, Eskom was back to January 2008 levels. This is the infamous period when Eskom, in an unprecedented move, cut off supplies to the mines.
Many of the country’s mines, a backbone of the economy, remained closed for weeks, while Eskom devised a plan to manage electricity demand.
‘Load-shedding†entered the consciousness of the nation as the utility shared out available electricity on a rotational basis.
Etzinger told the forum that we need to pursue energy efficiency in earnest. He said that significant new power production from Eskom would come on stream only in 2012. Electricity supply until then ‘would be very tightâ€.
South Africa is experiencing its first recession in nearly two decades as the global financial meltdown has made its effects felt across the globe.
Economic growth fell by an annualised 6.4% in the first quarter and 3% in the second quarter. Formal employment has fallen by hundreds of thousands of jobs. Yet, underpinning this gloom, demand for electricity, as noted by Etzinger, has continued almost as though there was no recession. We have, in a sense, two economies.
There is the real economy, where recession reduces growth and opportunity. Then there is the energy economy, where demand continues its upward trajectory seemingly independent of what pain consumers and taxpayers may be experiencing. It appears that negative economic growth does not offer a respite from energy demand. Neither does price increase.
The electricity regulator, Nersa, has approved two generous price increases in the past two years, 27.5% and 31.1%, but prices may be up by close to a nominal 60% on two years ago and demand is up by 10% from when the PCP, the power conservation programme, was implemented 18 months ago ‘In 18 months we have gone into complacency,†said Etzinger. It is clear from a number of comments by the panel that we use energy inefficiently.
Moderator Rod Crompton, a regulator at Nersa, noted that efficiency at our power stations is low, an average of just 30%. Etzinger noted that transmission resulted in further losses.
Professor LJ Grobler of the University of the North West said that heating water with electricity, as most consumers do, has an efficiency of just 22%.
Crompton noted that we are notoriously poor consumers of electricity — for instance, boiling a full kettle for a single hot drink. But it is also clear that no one is laying blame on the consumer for runaway energy demand and the inefficient use of energy.
The department of energy’s Ompi Aphane said that domestic users, who use less than 20% of our total electricity, cannot be thought of as the bad guys. ‘Key industrial users are also bad for not using energy efficiently,†said Aphane, noting that South Africa is in the top quartile of greenhouse gas emitters internationally. ‘We’re doing energy efficiency because we can’t build more power stations,†he said, adding that time was also against us. ‘We can’t build more power stations in the time frames available.â€
Aphane said the challenges the energy sector faced arose from the fact that South Africa had the least expensive electricity in the world. He said that cheap electricity had worked nicely for the economy in the past, but that it was now a negative, being ‘a low tariff on behaviourâ€. He said that there was no way out of the mess ‘without tariffs rising drastically. We have to hardwire energy efficiency into our behaviour.â€
Aphane said we enjoy the highest levels of solar radiation in the world but make little use of solar in our energy mix. He also asked if we could use coal more optimally.
The Free Market Foundation’s Terry Markman said that South Africa had failed on a checklist of good practice. This was because market prices and competition had not been used to guide energy provision in the country. He said that it could take 10 to 15 years to get market forces to shape energy policy in the country.