Eskom go-between to be appointed

Cape Town - Deputy President Kgalema Motlanthe said an independent system and market operator would be introduced to resolve and mediate between Eskom's "conflicted role" as generator and buyer of electricity. This, according to government, is a "critical element" preventing private operators entering into and competing in this market.

Answering questions in the National Assembly, Motlanthe told MPs this decision was taken by the Inter-Ministerial Committee on Energy which is made up of the departments of energy, public enterprises, national treasury, economic development, science and technology, trade and industry as well as the presidency.

"The cost recovery mechanism, in terms of which private sector generators are given the assurance that their costs will be recovered from the electricity tariff over the term of the power purchase agreement, has been concluded in consultation with Nersa (the National Energy Regulator of SA)," said Motlanthe.

Aside from the push to increase private sector participation, Motlanthe outlined other progress that has been made since the Electricity Advisory Council meeting in December 2009.

He announced, for example, that a comprehensive strategy has been completed to "address the rehabilitation of municipal distribution infrastructure, as a specific focus in the current government programme of action".

Furthermore, he said that the Integrated Resource Plan, which aims to pinpoint what technologies South Africa will require over the next 20 years to diversify its energy mix, would be promulgated by the last quarter of 2010.

"The process to revise the regulations promulgated under the Electricity Regulation Act of 2006 has been completed after consultation with lenders and potential investors.

"The draft regulations, licensing framework and standard power purchase agreement provisions, together with the evaluation criteria for independent power producers, will be issued by end-November 2010 to coincide with the conclusion of the Integrated Resource Plan," said Motlanthe.

One of the other initiatives introduced since the last Advisory Council meeting, he said, involves providing solar water heaters to all residential users of hot water, in place of electric geysers.

"The public consultation process was concluded in July 2010 for the solar water heaters financial incentive scheme," said Motlanthe, who added that Nersa would decide what the financial incentive for this programme would be later this month.

- Fin24.com