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ANC says transparency, affordability must guide South Africa’s electricity-mix choices

ANC says transparency, affordability must guide South Africa’s electricity-mix choices

Photo by Duane Daws

12th October 2015

By: Terence Creamer

Creamer Media Editor

  

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The governing African National Congress (ANC) has emphasised the need for transparency and affordability when determining the “optimal energy mix” for South Africa, while also underlining the importance of economic and environmental sustainability.

Delegates to the National General Council (NGC) agreed that priority should be given to making clear decisions on future baseload power investments, so as to avoid economically debilitating supply instability medium- to long-term. In fact, the country’s ongoing electricity shortages were held up as one of the “specific domestic weaknesses” in the economy undermining growth, investment and confidence.

The NGC determined that investment decisions on coal, renewable energy, gas, hydropower and nuclear should follow “open and transparent processes”.

The policy stance, which arose out of the ANC’s Economic Transformation Commission, reinforced the sentiments of a pre-NGC document, which argued that government should “commit to a full, transparent and thorough cost-benefit analysis of nuclear power as part of the procurement process”.

The pre-NGC document also said that government “must announce publically that nuclear energy can only be procured in line with the legal prescripts and after a thoroughgoing affordability assessment”.

The expanded role of independent power producers (IPPs) was also affirmed, together with the desirability of extending the success of the renewables procurement programme to technologies such as coal and gas. But the ANC also said that Eskom should remain at the centre of South Africa’s electricity industry.

It also called for the IPP Office, led by the Department of Energy and the National Treasury, to be restructured so as to ensure improved governance and to strengthen its impact in achieving national policy objectives.

The proposal might raise some opposition, particularly in light of the fact the IPP Office had been heralded locally and internationally for having ensured a material expansion in the contribution of renewable energy over the past four years. Following four bid windows, the office had procured over 6 300 MW of renewables capacity since 2012, nearly 2 000 MW of which was already operational.

The ANC also emphasised the role of gas in South Africa’s future energy and electricity mix, arguing gas, including shale gas, could be a “game changer” for the South African economy.

Delegates agreed, too, that the differing stages of development between the country’s hard minerals sector and the oil and gas sector should be acknowledged through splitting the Mineral and Petroleum Resources Development Act into two separate pieces of legislation. However, the party reaffirmed the policy of incorporating a ‘free-carry’ for the State in oil and gas developments.

The party also said that the creation of additional oil-refining capacity at Coega, in the Eastern Cape, remained important for the liquid fuels sector. However, no mention was made of the perilous financial position of the national oil company PetroSA, which was meant to sponsor the project.

Edited by Creamer Media Reporter

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