The Department of Public Enterprises (DPE) is mandated to ensure that the business strategies of the State Owned Enterprises (SOEs) are aligned with government's policy objectives and regulatory requirements, while ensuring that the SOEs are sustainable businesses that provide economic benefits to the country. If we are to reach our growth targets and prosper as a country then it is imperative that this Department fulfils its mandate and ensures that SOEs perform optimally and achieve their stated objectives. We hope that the decision taken by the Department to re-align its Programmes based on the SOEs residing within the various sectors will enable it to perform its functions more effectively and efficiently and ultimately ensure the successful operation of the SOEs. 

Having emphasised the critical role that SOEs play, the performance and ultimate failure of Eskom overshadows the performance of the other SOEs.

Eskom's failure to guarantee a reliable and sustainable supply of electricity to meet the demands of a growing population and a growing economy has had an adverse effect on the lives of all South Africans. I appreciate Government's admission of guilt that they ignored the early warning in the nineties, by Eskom, of a looming energy crisis. This however does not exonerate Eskom and Government of the present energy fiasco. 

For years we were told how fortunate we were to have the cheapest electricity in the world. This was true with regard to industrial sales, but definitely not so with regard to ordinary households which are paying up to 200% more than larger industries and foreign neighbouring Countries. Through a lack of foresight and leadership any advantage gained from so-called cheaper electricity has disappeared. There are many areas where Eskom has been found wanting, for example the management of its stockpile of coal which was allowed to reach unacceptably low levels and the inadequate maintenance of the power stations and generators. There is clearly a lack of suitably skilled and experienced personnel within this SOE and this has no doubt contributed to the dire situation that Eskom finds itself in today.

This is a situation that must be corrected as soon as possible. 

I was very surprised to learn that our electricity exports, in the three months to March this year, increased by 6,1 percent compared to the same period last year while electricity imports over the same period were down by 22,4 percent. To me this does not make much sense seeing that Eskom cannot meet the demand for electricity inside South Africa. For instance, why was the plug pulled on South African consumers while supply to Zimbabwe increased, despite them owing South Africa R70 million. Surely the wrong plug was pulled! 

Innovation and strong insightful leadership are needed if we are to move forward and bring normality to the power supply situation in our country.

Initiatives like the Pebble Bed Modular Reactor (PBMR) are a step in the right direction and I believe it will ease our power shortage. We, in the IFP, support the roll out of the PBMR as a clean and effective energy source. We do, however, envisage problems and scepticism from certain groups opposed to nuclear energy and especially the disposal of the waste. We would encourage these groups to engage constructively with government as well as other role players in order to find a suitable solution to this problem. If the environmentalists complain about the sensitivity of a location site they must propose an alternative site, if not their objection should be dismissed as pure filibustering.  

Eskom sien besparing slegs as 'n element wat hul altyd moet befonds. Dit is nie noodwendig so nie want besighede is bereid om self te finansier indien hulle erkenning (recognition) daarvoor kry. 

Kalifornie het 'n voorbeeld vir almal geword toe hulle aangedui het dat dit R8 miljoen per MW kos om 'n kragstasie te bou en dan moet jy dit nog bedryf ook. Die bedryf kos ongeveer 16c per KiloWatt uur. Dit maak dit duur.

Besparings inteendeel kos ongeveer R4m per MW en dit duur vir ewig met geen verdere koste. 

Oudits wys dat die normale besigheid ten minste 15% krag vermors. Ons moet eenvoudig die vermorsing, of WASTE verminder  en analieses het getoon dat by verskeie organisasies is besparings van 9% tot 34% behaal. Besparing is baie goedkoper as om nuwe kragstasies te bou. Ons het reeds 'n CO2 probleem en ons gaan dit  net vererger. 

Die strategie wat Eskom tans volg is nie volhoubaar, of sustainable nie en is per definisie nie 'n strategie nie maar meer 'n kort termyn "knee jerk".

Ons sien dit met die "moer" en die beurtkrag. Dit verander van dag tot dag. 

We must implement sustainable strategies that will result in a better future than the present short term knee-jerk exercises present. The problem is that the technologists of Eskom lean more towards the planning and building of the essential, but costly, generating capacity instead of primarily focusing on the essential savings. The building of additional generating capacity is important, but a balance must be reached regarding the essential and possible savings which indeed is a holistic approach. 

Eskom's current capacity is 38500 MW. The country's current shortfall reaches levels of up to 9000 MW at times. When capacity drops to below 30 000 MW this shortfall has severe impacts upon the country's future economy.

To this end government has announced certain drastic measures to save energy which is indeed a holistic approach. 

To Eskom's credit it must be mentioned that they have accepted a three tier approach with three detailed and distinctive elements which include:

Security of Supply, Alternative Energy Sources and Savings. 

Households are encouraged to investigate the possibility of standby UPS's and generators. Current negotiations are in place for the supply of UPS's which may be offered to households at favourable conditions. 

The approach to savings, however, requires a 3 pronged approach with regard to the residential sector that should focus on behaviour, pricing and new technology.   

Human behaviour is the most powerful determinant of the success of any intervention. A commitment and change in behaviour from households can be achieved through understanding the problem and through incentives. Eskom and municipalities should implement a discount (or rebate) to any user who implements energy saving strategies that reduce consumption.  

The bottom line of this is that each person can make a difference at home and at work. 

A second way that savings can be achieved is through pricing strategies.

Pricing is a powerful way of managing demand and consumption. It can be applied through usage pricing and incentives. 

The third way is that electricity users in the residential sector should be encouraged to install technology that would save energy.  

These may include:       

.     Load Management Technology. i.e. solar geysers and equipment  

.     Geyser Blankets 

.     Compact Fluorescent Lamps 

.     Gas Stoves 

The load management technology that is planned will regulate the times that electrical loads like geysers, swimming pool pumps, under floor heating, air-conditioning and less essential loads may be switched on. 

It is acknowledged that business is the most powerful institution on earth.

If South African business is compared to Europe and the UK, we have to admit that European business has displayed a more responsible approach to energy savings for the last 6 years. European business integrates energy savings in their business strategy and even includes their performance in their annual reports. SA Business has to also accept a similar responsibility.  

The business sector must be encouraged to develop energy efficiency strategies. Business should be required to report actual savings to a central web-based system as well as to report their actual consumption trends in their annual reports and board members should be requested to manage this. 

Businesses should also be encouraged to have their savings interventions certified in order to disclose their achievements. 

Eskom and municipalities should implement rebates for energy efficiency where businesses and households can prove energy efficiency interventions that can be verified. Where business and households do not implement any energy efficiency interventions, they should be penalized.  

Businesses in particular will have to consider the installation of energy efficiency technologies like: 

.     Load management systems and procedures 

.     Process changes  

.     Retrofitting (replacing of existing equipment with more energy efficient alternative technologies or modernized equipment) 

- Energy efficient lighting,  

- Efficient motors,  

- Heat recovery,  

- Improved insulation,  

- Industrial solar water heating -  

- Co-generation: various opportunities and technology exist in large and medium industry, flaring of excess gasses, zone heating, recycling of wastage material as fuel sources, is some ways to facilitate the use of waste material from industrial processes.  

We have to accept that the only solution is to implement energy saving strategies that will focus on: 

.     The optimization of savings  

.     The reduction of energy waste 

.     The implementation of alternative energy resources. 

The implementation of such strategies, as listed, can result in a saving of at least 8000MW in the country.  

SOEs are crucial to the growth of our economy; it is for this reason that the errors and oversights which contributed to the power crisis must not repeated. Eskom and all the other SOEs must learn from these mistakes. We must move forward and find solutions to the problems that have been identified and ensure that they do not occur in future. The Department must ensure that our SOEs perform their duties and fulfil their mandates. 

The IFP supports the budget.

FOR MORE INFORMATION
Mr Hennie Bekker MP
083 255 4520