Firms face electricity fines

Pretoria - Lower electricity demand will be enforced as legislation "with teeth" when government's Integrated Resource Plan (IRP) is finalised.

Newly-appointed director general of energy Nelisiwe Magubane said that in the short term the country's electricity problem could be solved only by reduced consumption, also known as demand-side management.

This was certainly part of the process of setting up the IRP, she said. Her department was busy negotiating agreements with various industries, such as the mining industry, on saving targets.

For instance, agreement still had to be reached with the mining industry on whether the saving would be 7% or 10%,  depending on the type of mine involved.

This was the only way to get quick results in terms of energy efficiency and demand-side management, Magubane continued.

Analysts predict that at current economic growth rates electricity shortages will again confront the country in 2011.

Demand would have to be reduced before one could feel comfortable about the reserve margin, Magubane said.

On Monday she opened a consultative conference with players in the electricity sector to get everyone's input for the IRP – the comprehensive plan for the country's energy requirements over the next 20 years.

In September the IRP will be presented to cabinet for approval, after which it will be promulgated.

The department of energy is having discussions with Eskom on creating an independent systems operator that should be unbundled from Eskom as part of the process of setting up private power producers.

Ompi Aphane, deputy director-general of the department, pointed out that this would however not lead to a breakup of Eskom, because this role formed a fairly small part of its operations, although strategically it is one of its most important functions.

The creation of the new systems operator, which will buy electricity from suppliers and sell it to consumers, is crucial for the establishment of independent, private power producers which have to be attracted to the industry to provide the country with sufficient future sources of electricity. 

This role has so far been played by Eskom, but the new producers will become Eskom’s competitors.

The systems operator will have to enter into long-term electricity purchase contracts, allocate Eskom, other government enterprises and independent power producers opportunities for generating electricity, and ensure the short-term security of electricity supply.

It will have to build and maintain its own transmission network.

- Sake24.com

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