Budget Debate On Vote 26: Energy

Budget Vote Debate- Extended Public Committee
National Assembly
Mr JA Esterhuizen, MP

Honourable Chairperson,

We could never underestimate the impact and severity of continued rolling power constraints to socio-economic growth in South Africa.

This coupled together with long project delays and spiralling budget costs of construction of State owned power utility Eskom’s, Medupi and Kusile coal power stations, place Eskom in both an energy supply side and budget crisis.

Eskom must repay the long term loans used to build these new plants in the next few years which total approximately R110 billion. If they were fully operational by 2014 and 2017 respectively, as had been planned, the incurred debt would have been paid through normal cash from operations.

Why should the citizens of this country have to pay for such incompetence? NERSA has just further rewarded their inefficiency by allowing above inflation increase of 9.4%.

Electricity tariffs have now reached the point where every increase in price results in less demand.

The Departments lack of transparency on Nuclear is a concern.

Also there is a real risk that South Africa could experience an outright recession in the last quarter of this year. How would it be financially viable then to justify the enormous financial impact of a R1 trillion build on an already strained economy?

The rand’s plunge, which might erode its credibility, will in turn make international projects much more expensive.

This Government has shown conclusively that it is unable to manage simple coal-fired electricity builds. Going the nuclear route will make the financial disasters of Medupi and Kusile seem small in comparison.

South Africa signed a treaty with the DRC in 2013, for hydropower, construction to start October 15 last year – (Inga 3). SA was obliged to pay a $10 million deposit, 15 October came and went without a sod being turned. Will the R170million be paid back if the project is stillborn?

We as the IFP feel that the maturing renewable energy sector will make South Africa’s power system more sustainable and equitable.
With exceptional solar and wind resources, South Africa could become a hub and lead the way for the production of renewable energy in Africa.

Fossiel brandstof wat verantwoordelik is vir 90% van ons krag opwekking is nie net skadelik vir die atmosfeer nie, dit het ook n onsaglike negatiewe impak op die onmiddelike omgewing waar bevoorbeeld kool myne gelee is, asook op die gesondheid van die mense in die omgewing.

Case studies have also proved that gas can be a great success in energy efficiency.

Economic hurdles hindering South Africa from developing gas and its infrastructure include a persistent lack of clarity regarding the economic feasibility of regional gas supplies, the need for a stable legislative environment, a lack of commitment and the significant capital investment required to do so.

In conclusion, we are encouraged by government’s support and recognition of the value and contribution that renewable energy can play in our energy mix.

The Minister and Department must also be commended on the 280,000 new-grid and non-grid connection’s that will be delivered in this budget cycle.

The IFP supports this budget vote debate.

Honourable JA Esterhuizen, MP
083 3792391
IFP Media, Parliament