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Southern African Faith Communities Environment Institute

Southern African Faith Communities Environment Institute. Liz McDaid – Cape Town. Presentation 23 rd May 2012. Context Key issues: Transmission Structure Planning Link with legislative amendments. Why is the ISMO Important?. New generation investment decisions since 2001.

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Southern African Faith Communities Environment Institute

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  1. Southern African Faith Communities Environment Institute Liz McDaid – Cape Town

  2. Presentation 23rd May 2012 • Context • Key issues: • Transmission • Structure • Planning • Link with legislative amendments

  3. Why is the ISMO Important? New generation investment decisions since 2001 Eskom ~16,000 MW • We have had favourable Government policy on private investment in power generation since the 1998 White Paper on Energy – but very little has been achieved. • By 2012 private investment decisions account for less than 2% of new generation capacity. • Even if the entire REIPPPP (3,725MW) is included, private investment is still under 20%. 14,620 MW IPPs 273 MW 1,000 MW 1,000 MW 273 MW 2003 2004 2001 2006 2010 2012 Government targets 30% Independent Power Producers Cabinet decision. DOE to procure 1,000MW of OCGT peaker from IPPs. Eskom to build 1,000 MW Government approves Eskom investments: Camden RTS (1,520MW) Grootvlei RTS (1,200MW) Komati RTS (1,000MW) Medupi (4,800MW) Kusile (4,800 MW) Ingula (1,300 MW) Government approves additional 1,000MW of Eskom OCGT peaker plant Eskom signs Power Purchase Agreements (PPAs) with IPPs under the MTPPP for 273MW DOE announces Preferred Bidders for 1,415 MW of renewable IPPs Parliamentary Hearings on the ISMO Bill

  4. DoE Context 1998 • Energy policy • IEP • Legislation ERA, NERA • ISMO • IRP • Energy policy • IRP • ISMO • Legislation ERA, NERA • IEP 2013

  5. Want Have • Build DoE and maintain transparent, accountable governance structure • Diversify generation to increase renewables • Transmission to match generation planning • Tariffs to ensure ISMO focussed on EE/DSM and not only increasing supply • Lack of DoE capability • Reliance on private sector (vested interests) • Eskom failure to implement renewables • Eskom transmission aligns centralised generation • Eskom modelling capability but lack of political will for EE/ DSM led IRP

  6. Transmission current Tx ESKOM ISMO DX HOUSE ISMO ? DX -eskom Tx ISMO HOUSE ESKOM ISMO ? Tx ISMO HOUSE DX ESKOM

  7. Independent regulation/ central planning DOE : IEP integrated with IPAP, NDP, MDGs, CC policy etc DSM/EE/ SWH/ IEP/IRP NERSA: Regulate tariffs Set,Monitor and enforce license conditions IRP ISMO: Scheduling, procurement Input into IRP Eskom generation IPPs

  8. ISMO bill DOE : IEP integrated with IPAP, NDP, MDGs, CC policy etc DSM/EE/ SWH/ IEP/ IRP NERSA: Regulate tariffs Set, Monitor and enforce license conditions IRP ISMO: Scheduling, procurement Input into IRP NERSA exemption Eskom generation Increase parliamentary oversight IPPs

  9. ERA/ NERA amendmentslack of accountability, transparency DOE : IEP integrated with IPAP, NDP, MDGs etc DSM/EE/ SWH/ IRP Decide who gets licences and determine tariffs and conditions NERSA: Regulate tariffs Monitor and enforce license conditions IRP (optional) finalise plan procure generation ISMO: Scheduling, procurement Input into IRP public participation in irp but irp can be ignored Public participation in tariff hearings but minister can dictate tariffs

  10. ISMO • Transmission – support transfer of physical assets • ISMO as a not for profit state institution. • Accountable, transparent governance – linkages with electricity act amendments

  11. suggestions • Transitional arrangements – include transmission in ISMO but put timeframe into transitional arrangements • Ensure strong public participation in all procurement and planning functions • Legislate to ensure accountable, transparent governance

  12. Archbishop Thabo Makgoba • “…a mark of true moral leadership, of genuine wisdom: to be able to see with clear eyes what is the right course of action to pursue, and not only to follow it, but to give others the encouragement to do the same.” Thank you

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