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'Time for govt to act on electricity crisis'

Published Jun 20, 2011


The time has come for government to take determined action to solve the country's electricity shortage problems and end the regular blackouts that have done great harm to the economy, according to the Free Market Foundation.

In May, the Department of Energy presented a bill to Parliament that has the objective to provide for an Independent System and Market Operator (ISMO), which would act as the buyer of electricity from companies that generate it and then resell it to its own customers.

What it means is that Eskom would be split into two different companies, one that produces or generates electricity by operating the power stations, and a second one that would operate the grid that distributes the electricity to end-users, such as large companies and local authorities.

Energy Minister Dipuo Peters suggested when the draft law was unveiled that Eskom would concentrate on the supply of electricity from coal- and nuclear-powered stations, while the private sector, in the form of independent power oroducers, would concentrate on alternative and sustainable power generation, such as wind and solar farms.

The country is also under pressure to increase the use of renewable energy sources to 42% of its total supply by 2030 as part of its overall commitment to reduce carbon emissions. However, none of this is completely settled yet.

In its reply to the ISMO Bill, the Free Market Foundation said it was essential that transmission must be made as independent and neutral as possible.

The foundation said that while the objects of the ISMO Bill included responsibility for planning and supply of electricity, the Bill did not mention taking responsibility for ensuring that there were no electricity shortages.

“It also says nothing about ownership and maintenance of the electricity grid and how its independence from Eskom (as the dominant supplier) and from political interference will be ensured. The bill therefore leaves many crucial questions unanswered. This deficiency must be remedied,” the Free Market Foundation said.

The foundation also pointed out that if the ISMO was not to be the owner and maintainer of the transmission grid, this should be clearly stated.

“If shifting the operation of the grid to ISMO, without the transfer of ownership and control, is intended to resolve the 'conflicted grid problem' as it is described in the trade, it is bound to fail,” it said.

The Free Market Foundation submission said that in attempts to find ways to eliminate the electricity shortage, the main obstacle had been that independent private electricity producers had not been able to gain access to the grid. - I-Net Bridge

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