Walk and chew gum

27th January 2017

By: Terence Creamer

Creamer Media Editor


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Much attention is rightly being given to the composition of South Africa’s future electricity generation mix. Warts and all, the much-delayed process of updating the Integrated Resource Plan (IRP) is at least under way.

It is also arguably positive that the deadline for comment has been extended to allow for proper debate on the contents of the base case and the assumptions. Whether or not this will be sufficient to deliver a rational plan remains far from certain, though.

Besides generation, however, a sustainable and robust electricity supply industry depends on several other factors and components – a reality that should not be forgotten amid the oftentimes polarising deliberations on the mix.

For instance, it is going to be as important for South Africa to have a mature, far-sighted conversation on the future design and operation of the entire system so as to future-proof it (as best as is practically possible) in the face of the ‘disruption’ that is already under way, as well as the disruption that is to come.

Naturally, any restructuring of the domestic industry will take time, particularly given the political sensitivities associated with such an overhaul, not to mention the technical and financial pitfalls associated with any effort to transform. Nevertheless, the debate cannot be held off forever and, once the IRP process is completed, the Department of Energy should take the lead in initiating an inclusive discussion on the options.

However, as with any contemporary challenge, it will be a case of walking and chewing gum. This is because there are various pressing issues that need to be dealt with urgently to ensure ongoing and expanded electricity access, as well as affordable and stable supply.

Two issues come to mind immediately: strengthening the transmission grid and interventions to support and/or restructure those distributors that are currently failing.

Strengthening the grid, including into the Southern Africa region, is arguably the lowest risk investment that can be made to shore up security of supply, create the platform for pursuing a least-cost deployment of generation assets and facilitate cross-border electricity trade.

The attention currently being given to the IRP should also be used to emphasise the importance of grid investment, the absence of which could preclude South Africa from taking full advantage of its energy resources and raise the cost of supply for the region as a whole. That is not to say that there are not also major opportunities for expanding off-grid programmes, particularly in areas where the cost of extending the grid is prohibitive. However, there is a strong argument that transmission infrastructure not only lowers overall system costs, but also opens up far more generation choices.

On the distribution front, more effort needs to be made in defining the short-, medium- and long-term plans required for improving sustainability. Recent moves by Eskom to curtail power to over 20 chronic municipal defaulters has, once again, brought to the fore the urgent need for reform. A one-size-fits-all solution, as envisaged under the so-called ‘Reds’ (regional electricity distributors) reform is unlikely, not least because of constitutional limitations. However, South Africa needs to break out of a cycle that is profoundly unfair to those households and businesses that are paying power bills to delinquent municipalities.

Edited by Terence Creamer
Creamer Media Editor


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