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Finweek English Edition - - COVER -

It is likely that in fu­ture the pro­vi­sion of new elec­tric­i­ty­gen­er­at­ing ca­pac­ity in South Africa will come from the pri­vate sec­tor and will utilise a wide va­ri­ety of tech­nolo­gies, in­clud­ing diesel, oil, wind en­ergy, gas, waste and nu­clear en­ergy.

This was the view ex­pressed at the Met­als and En­gi­neer­ing Ind­aba by Chris Yel­land, en­ergy ex­pert and man­ag­ing direc­tor of EE Pub­lish­ing. He said SA needs to move away from be­ing solely de­pen­dent on the state-owned util­ity Eskom for elec­tric­ity pro­vi­sion and also from depend­ing on coal as a sin­gle source of en­ergy.

“In the past a ‘com­mand econ­omy’ ap­proach saw huge power sta­tions be­ing built close to sources of coal to cap­i­talise on economies of scale. How­ever, in the cur­rent eco­nomic en­vi­ron­ment, where lev­els of un­cer­tainty re­lated to de­mand and rates of ex­change, among other things, is high, South Africa needs to man­age risks by de­cen­tral­is­ing power gen­er­a­tion and build­ing smaller gen­er­at­ing units, which are more flex­i­ble,” he said.

He said that Eskom does not have “space” to catch up with its huge main­te­nance back­log, as it is un­der pres­sure to limit load-shed­ding.

“Af­ter fin­ish­ing the long de­layed Medupi power sta­tion and its suc­ces­sor, Kusile, I be­lieve Eskom will have a limited role to play in new elec­tric­ity pro­vi­sion. The fi­nan­cial con­straints un­der which it is op­er­at­ing are sim­ply too oner­ous – the R23bn in eq­uity pro­vided by the gov­ern­ment is in­suf­fi­cient to meet its ap­prox­i­mately R200bn fi­nanc­ing gap. The ANC is ap­par­ently con­sid­er­ing pri­vatis­ing Eskom with men­tion of the ‘Chi­nese op­tion’. I be­lieve that gov­ern­ment will have to sell part of its stake and that in fu­ture the pri­vate own­er­ship of the util­ity could be as high as 30%.”

Speak­ing at the Ind­aba, Natasha Maz­zone, the DA’s shadow min­is­ter of public en­ter­prises, said that se­cure en­ergy sup­ply was the lifeblood of any econ­omy and that SA’s cur­rent en­ergy sit­u­a­tion could be de­scribed as “ut­ter chaos, born out of a lack of proper main­te­nance and fur­ther ex­ac­er­bated by the util­ity’s cur­rent fi­nan­cial con­straints”.

“We be­lieve the min­is­ter of public en­ter­prises should end the mo­nop­oly that Eskom has over elec­tric­ity gen­er­a­tion and dis­tri­bu­tion, some­thing that Pres­i­dent Zuma has made ref­er­ence to in three State of the Na­tion Ad­dresses but which has now qui­etly dis­ap­peared from the ta­ble. We also need to have ac­cess to the lat­est en­ergy plan for the coun­try. Fur­ther­more, we ad­vo­cate that the Gas Utilisation Mas­ter Plan be fast-tracked as this op­tion can, we be­lieve, be put into op­er­a­tion in a few years,” she said.

It is un­der­stood that the gas op­tion for the econ­omy is also be­ing looked at by the dti, fol­low­ing the big­gest gas dis­cov­ery in the world for many years in Mozam­bique.

ed­i­to­rial@finweek.co.za

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