Question No. 09
Mr N Singh (Inkatha Freedom Party) to ask the Deputy President:
Whether the key proposals as outlined in his speech to the Energy Advisory Council on 8 December 2009 are being implemented; if not, why not; if so, what are the relevant details?
Reply:
Yes Honourable Singh, there has been progress with the implementation of the key agreements made at the Electricity Advisory Council meeting on 8 December last year.
For those in this house that are not aware, the Electricity Advisory Council arose out of the Energy Summit convened by the National Economic Development and Labour Council (NEDLAC) in May 2008.
It consists of government, business, labour and community as represented at NEDLAC. The Advisory Council is supported by a national electricity response team comprising all social partners.
I would like to highlight some of the key areas of implementation, as more details can be obtained from the Minister of Energy.
Improvement in efficiency of generation
Since the last Advisory Council meeting, Eskom's generator performance level has improved to the required levels.
Support municipalities in maintenance for high demand period of June 2010
In anticipation of increased electricity demand during the world cup, a programme was initiated at all the Host Cities to identify critical infrastructure that needs urgent attention.
A more comprehensive strategy has since been completed to address the rehabilitation of municipal distribution infrastructure, as a specific focus in the current government programme of action.
Policy framework for private sector participation and introduction of non-conflicted independent system and market operator
Since the last meeting the issues have been addressed through various processes under the Inter-Ministerial Committee (IMC) on Energy that was created through a Cabinet decision. The committee comprises the departments of Energy, Public Enterprises, National Treasury, Economic Development, Science and Technology, Trade and Industry and The Presidency.
The following have been achieved in relation to each of the elements above:
- The integrated resource plan will be promulgated by the last quarter of 2010. The plan will indicate the generation technologies that South Africa will require over the next 20 years, in a manner that diversifies our energy mix from being coal dominated.
- The process to revise the regulations promulgated under the Electricity Regulation Act of 2006 has been completed after consultation with lenders and potential investors. The draft regulations, licensing framework and a standard power purchase agreement provisions, together with the evaluation criteria for independent power producers (IPP) will be issued by end November 2010 to coincide with the conclusion of the Integrated Resource Plan.
- Perhaps the most critical element for private sector participation relates to the resolution of the conflicted role that Eskom plays as both a generator and buyer, the introduction of an independent system and market Operator will address this conflicted role of Eskom.
- The cost recovery mechanism, in terms of which private sector generators are given the assurance that their costs will be recovered from the electricity tariff over the term of the power purchase agreement, has been concluded in consultation with the National Energy Regulator of South Africa (NERSA).
Solar water heating and standard offer incentive
One of the other initiatives introduced since the last Advisory Council meeting involves providing solar water heaters to all residential users of hot water, in place of electric geysers.
The public consultation process was concluded in July 2010, for the solar water heaters financial incentive scheme. The process will culminate in the determination of the level of the incentive in rands by NERSA and this is scheduled for later this month.
I thank you.
