Cut power exports to solve crisis - DA, union
February 1, 2008
By Donwald Pressly
Cape Town - South Africa supplies about 6 percent of its energy to southern African states at about a quarter of the price of the local residential rate amid a power crisis.
The Democratic Alliance and the trade union Solidarity have proposed that South Africa consider ending power supplies to the region as the local shortfall was roughly the same as the amount exported.
With South Africa now in its third week of major power cuts, public enterprises minister Alec Erwin said that while the burden of reducing demand needed to be spread to the country's neighbours, Eskom was required to work with neighbouring states on "a customer basis".
The bottom line was that South Africa would be asking its neighbours "to share some of the shedding with us", he said.
Public enterprises portfolio committee chairman Fatima Chohan told MPs during a debate on the energy crisis on Wednesday that, in terms of contractual obligations to African states, supplies could be cut if South Africa was under domestic pressure.
At a press briefing at parliament, official opposition energy spokesperson Hendrik Schmidt said "charity starts at home".
He said the portion of electricity generated at home, but sold abroad, was "not insignificant" as its effect on local demand could not be underestimated, especially when Eskom was struggling to meet that demand. He put it at 5 percent, but T-sec economist Mike Schussler put it at 6 percent of production.
Solidarity deputy secretary-general Dirk Hermann contested the suggestion - made at a press briefing last Friday by Erwin - that South Africa was a net importer of power. "That is simply not true if you look at the statistics," said Hermann.
Schussler, who has done a study of Eskom annual reports over the past 10 years, said this week an analysis of Eskom electricity supply from 1996 to last year showed that residential and international usage had increased strongly. International use rose from 3 percent to 6 percent, as had residential use. Municipalities made up the biggest component at 40 percent of use last year, down from 42 percent in 1996.
He said South Africa was not a net importer of power. Not only was South Africa a net exporter of power, but it also sold its power at "far below" the average price that South African customers paid.
"Even the cheapest industrial electricity Eskom sells to our big industrial customers is more than 33 percent more expensive than the price neighbouring countries pay," said Schussler.
The Eskom annual report for 2007 notes that residential users paid 41.7c per kilowatt-hour, municipalities paid 17c, commercial entities 23.5c industrial users 16c, mining 16.9c, agriculture 33.7c, while international users paid 11.1c.
Meanwhile, Statistics SA reported that the actual quantity of electricity produced from September to November last year was 65 605 gigawatt-hours - up from 63 728GWh in the same period the previous year.
While Stats SA does not break down the countries from which South Africa imports or exports its power, it reports that 2 856GWh were imported during this period, up from 2 515GWh the previous year. Erwin noted that Cahora Bassa in Mozambique and the Inga hydroelectric project in the Democratic Republic of the Congo were important parts of South Africa's supply link.
Last year's production figure from September to November was 13 percent up on the same period in 2006.
Power exported from South Africa amounted to 3 569GWh down 4.5 percent from the previous year. The total electricity available for distribution in South Africa was 3.8 percent up, at 60 068GWh in this period last year compared to 57 894GWh the previous year.
This figure excludes the exports and 4 822GWh consumed in power stations and auxiliary systems between September and November last year - the latter figure being up 4.5 percent from the previous year.
While Erwin said power supply was stopped to Zimbabwe "some months ago", Eskom supplied Lesotho, Zambia Botswana, Swaziland and Mozambique. Schmidt said that electricity-supply contracts to South Africa's neighbours "must be examined with a view to cancelling them wherever legally possible".
"This process must be managed carefully to minimise unnecessary penalties owing to contractual obligations and to avoid straining relations with these neighbouring countries.
"There is no genuine justification for continuing with these exports when there is a desperate lack of reserve capacity in our domestic market," said Schmidt.
Meanwhile, the MP noted that policy reserved Eskom's right as the sole purchaser of all electricity generated in South Africa. Therefore, while provision was made for independent power producers (IPPs) to generate up to 30 percent of South Africa's total electricity output, the power must be sold to Eskom and not any other users.
"This monopoly power is one of the fundamental reasons why we are faced with such a severe shortage of electricity generating capacity," he said.
Amending the legislation would mitigate the threat posed by the current power crisis to South Africa's industrial strategy. He said large industry would no longer rely on Eskom's "erratic supply" and could make use of private power utilities to build dedicated power plants.
Erwin acknowledged the market for IPPs may have opened up but the government had resisted giving into making excessive guarantees to them "just to bring in a private producer" which demanded higher returns on investments.
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