End Eskom's monopoly, says DA

Eskom's monopoly was the main cause of South Africa's electricity problems and the solution lay in Independent Power Producers (IPP), the Democratic alliance (DA) said today.

While provision was made for IPPs to generate up to 30% of South Africa's total electricity output, it had to be sold to Eskom and not to other users, party MP Hendrik Schmidt told journalists in Cape Town.

"[This] is one of the fundamental reasons why we are faced with such a severe shortage of electricity generating capacity. We have to ensure that Eskom's monopoly as the sole purchaser is dismantled."

The party was presenting its short and medium-term energy solutions, following the government's announcement on Friday of a plan to deal with the electricity crisis. The utility‘s low tariffs had also made other producers reluctant to step in.

South Africa's electricity was about 70% cheaper than Canada's, which had the world's second cheapest electricity. He said Eskom should have seen this coming years ago, and raised its costs accordingly. IPPs would provide capital, operating know-how and enable Eskom to buy power from neighbouring countries.

"We need to focus on security of supply, not cost," he said. "It is only where there are fair returns in an open, competitive market where IPPs will be able to assist, at least in the medium term, in providing relief."

Terminate supplying other countries
The party also proposed that Eskom terminate its supply to neighbouring countries. This had to be done where legally possible and taking the diplomatic fallout into consideration. Eskom currently exported a "not insignificant" 5% of its total generation to countries in the region.

The party's proposals also included renewable energy, reducing consumption, funding and dealing with the skills crisis. On the latter, MP Manie van Dyk called for Eskom to review its employment policies.

"The shortage of skills, particularly technical skills, is largely attributed to the aggressive implementation of affirmative action, resulting in high levels of de-motivation and a mass exodus of highly-skilled staff."

He also called for management bonuses to be linked to targets for electricity supply. MP Gareth Morgan expressed concern over the cost of the government's proposed rollout of solar water heaters. A family of four could expect to pay about R12 000 for a unit.

"There's always the potential that manufacturers could increase the price through increased demand," he said. The unit price could however be reduced to around R7 000 through a combination of large-scale manufacture, tax incentives and carbon funding.

He estimated that the party's proposal could save the country about 2000 Mega Watts in the next two years. Added to this could be about 5000 Mega Watts which small users generated.

The government's plan included installing one million solar water heaters in households across the country in the next three years. The DA wanted twice that number to be installed in metropolitan areas by the end of 2011.

The Klipheuwel wind power project in the Western Cape had to be expanded to other, suitable parts of the country, said Morgan. About 10 000 Mega Watts of electricity could be wind generated in the Western Cape alone, he said. - Sapa