A brewing dispute over energy distribution licences could be an early litmus test of the Government of National Unity’s stated commitment to economic reform and public-private partnership.
Eskom is calling on the National Energy Regulator of SA (Nersa) to reject applications for private trading in energy production, according to a report in Business Day this week. Eskom reportedly told Nersa that current legislation only provides for a single supplier of power in any given area.
No doubt Eskom finds this legislative arrangement — if it in fact pertains — rather convenient given its market position.
But maintaining the status quo of Eskom domination would be a decade-long setback for just about everybody else except Eskom, particularly the poor who are most affected by the soaring electricity tariff. Experts say liberalising the energy generation and distribution market would be a massive tonic for the economy, evidenced by the sizeable investments already made.
Private energy stakeholders say government needs to make a clear distinction between contracts for energy capacity and usage of the transmission network. Misplaced concerns about duplicating physical infrastructure should not be used as a ruse to prevent private players entering the market.
The issue is particularly significant given the potential massive investment in the energy market, and the need for potential customers to shop around for affordable and sustainable energy sources.
Government should appreciate how local energy systems allow for a strengthened circular economy, where ‘prosumers’ – those who benefit from self-generation for self-consumption — can freely trade energy via local distribution networks – yet all the while acting as good grid citizens to support a strong stable national grid.
Both at the technical and economic level, local energy systems are the foundation of the shift to a fair and inclusive clean energy system.
Power engineering organisations (represented globally by the IEEE, IEC, EPRI, CIGRÉ ) are preparing electrical standards to allow for the millions of local and community energy systems to form the foundation of a future smart grid. As these technologies align, our government must take advantage and lead a paradigm shift forward towards a ‘Smart Grid’ for all.
Energy reform has particular relevance to the Western Cape given the province’s burgeoning renewable energy sector, which has huge job creation potential. The province has already seen huge investment and innovation in this space.
The regional economy would also see immediate benefit from accelerated public-private partnership, particularly in the logistics sector.
Government’s approach to energy reform could give a clear indication as to its overall willingness to allow more private sector participation in key areas of economic activity previously the preserve of state-owned enterprises.
John Lawson
CEO of the Cape Chamber of Commerce and Industry
