Daily Maverick
Dailymaverick logo

Opinionistas

This is an opinion piece. The views expressed are not that of Daily Maverick.....

The money ties that bind the ANC – are they the barrier to fixing South Africa’s energy woes?

Liz McDaid
By Liz McDaid
18 Jul 2022
Facebook
6
Mr President, we don’t need an energy state of emergency, or more bending of the laws. Eskom’s crisis was created by the looting of the state. We now urgently need a National Energy Plan.

There can be no argument that South Africans have been thoroughly tested over the past few years, with several service delivery issues, across various portfolios, and now an all-but-failed electricity system.

Unprecedented – yet avoidable – rolling blackouts and increasing electricity and liquid fuel prices have put immense pressure on South Africans, with far too many in survival mode.  

We need a National Energy Plan. An energy plan that is developed in a consultative manner and which all South Africans can buy into. Such an Integrated Energy Plan (IEP) is provided for in the National Energy Act, assented to by Parliament and promulgated in 2008. But it is basically toothless at this point since the relevant section imposing an obligation on the minister of mineral resources and energy to compile and annually review an IEP (with public consultation) has not yet been brought into operation by the President.

And yet, this is the crux of our energy problems.

We all know that Eskom has been limping along for years, even though the government knew that additional electricity generation capacity was needed. Some of our oil refineries are closing – and how much liquid fuels do we need in the short term, given the international trend towards electric vehicles?

These are some of the issues that need a coordinated planning response, but it seems that the Department of Mineral Resources and Energy (DMRE) is unwilling to finalise the country’s energy plan, which would enable open public debate and discussion about our energy future.

Section 6 is at the heart of the National Energy Act, and (once brought into operation) will impose a number of mandatory obligations on the minister. These require the minister to develop and annually review and publish an IEP. The IEP is in turn required to deal with issues relating to the supply, transformation, transport, storage of and demand for energy in a way that accounts for:


  • Security of supply;

  • Economically available energy resources;

  • Affordability;

  • Universal accessibility and free basic electricity;

  • Social equity;

  • Employment;

  • The environment;

  • International commitments;

  • Consumer protection; and

  • Contribution of energy supply to socioeconomic development.


The IEP is supposed to, among other things, serve as a guide for energy infrastructure investments and guide the selection of the appropriate technology to meet energy demand.

While the minister continues to promote oil and gas for economic growth, research by the World Bank in 2020 on 12 sub-Saharan countries that discovered considerable oil and gas resources between 2002 and 2020, revealed that in each of these countries the resources were overvalued, the timeline from discovery to production took longer than expected, and that government revenues were lower than predicted.

So why ignore the research?

What are some of these “unholy” alliances that appear to be the obstacles to finalising a proper energy plan for the country and which currently appear to be threatening to topple our hard-fought democratic principles, which are supposed to be characterised by increased inclusivity and giving the people a voice?

Read in Daily Maverick: “Wanted: A real emergency energy plan – yesterday”

Let us start with Shell, the Dutch multinational that in December 2021 was interdicted from continuing its oil and gas exploration on the Wild Coast of South Africa because it did not consult with affected coastal communities, who rely on a healthy ocean for cultural practices and livelihoods.

Many of us were quite astonished that Minister Gwede Mantashe entered the fray on the side of Shell. Given the climate crisis, why would the minister be pushing for more fossil fuel projects? Is it a coincidence that we learnt via the media that Shell had donated R15-million to the ANC, via the Batho Batho Trust?

Read in Daily Maverick: “Mantashe suggests forming second state-owned power utility to solve energy crisis – Ramaphosa agrees” 

Shell is also a partner with Total Energy in a current application for further oil and gas offshore of Cape Town, and in 2011, Shell were the ones who applied for a licence to frack the Karoo, causing a massive public outcry because of its potential to harm the water-scarce region. Fracking seems to be back on the agenda and one has to wonder who will be applying for licences this time around.

It is also worth noting that Karpowership – another “unholy” alliance – has a contract to obtain its liquefied natural gas from Shell. From the get-go, Karpowership appeared to be a curious choice.

Why were the Karpowership projects given the bulk (1,200MW) of the additional power allocated through the Risk Mitigation Independent Power Producer Procurement Programme?

The programme was supposed to add 2,000MW to the grid, which should have come online within two years from when it was announced in September 2020. We are already in the second half of 2022, and only 150MW of this “emergency power” has reached financial closure. It seems highly unlikely that any additional power from the programme will reach the grid within the original timeframe.

Read in Daily Maverick: “One year on, the Karpowership deal is stuttering and staggering along but is by no means dead in the water”

Read in Daily Maverick: “Energy regulator to oppose court application by ecogroup to review Karpowership licences”

However, similar to Shell, the Karpowership projects have been mired in controversy, having initially obtained an exemption under an emergency provision of the National Environmental Management Act (Nema) to avoid conducting environmental impact assessments (EIAs), purportedly because the projects would provide emergency power required due to the Covid-19 pandemic.

After this was revoked, Karpowership then embarked on an EIA, but again this was not straightforward and ended up with the Department of Forestry, Fisheries and the Environment refusing authorisation, which Karpowership is appealing.

Although intended to address the short-term electricity gap, the Karpowership contracts are understood to run for 20 years. Experts have shown that Karpowership electricity prices are likely to increase fivefold over that time, compared with other more affordable renewable options.

However, despite this, the National Energy Regulator still authorised electricity generation licences for the Karpowership projects, a decision being challenged in court by civil society organisations OUTA and The Green Connection.

 In June 2022, Meridian Economics released a report saying that since 2016, if South Africa had implemented the renewable allocation in the IRP2019, we would have had an additional 5,000MW on the grid, which would have significantly reduced power outages.

This dragging of feet when it comes to renewable energy has been accompanied by a host of oil and gas companies appearing on our oceans, determined to drill for fossil fuels. Many of these exploration rights were issued during the Jacob Zuma era, without small-scale fishers and fishing-dependent communities being adequately consulted. In the recent Shell and seismic cases, these fishers have had to go to court to protect their rights to be consulted.

Mr President, we don’t need an energy state of emergency, or some other justification for more bending of the laws. It is time to face the facts: Eskom’s crisis was created by a government which was characterised by looting of the state. We have seen decades of attempts to undermine the Constitution and the rule of law.

The Zondo Commission has revealed that party interests trumped public interest in the past. Is this continuing? We need decisive leadership that puts evidence-based planning above party interests.

It is time to promulgate Section 6 of the National Energy Act to make it mandatory for the minister to compile an Integrated Energy Plan after a lawful public consultation process. This would in turn force DMRE to update and revise the IEP annually, enabling us to take advantage of trends and opportunities, and to keep the lights on permanently and in an affordable way!

The answer is in your pen, Mr President. DM

Categories:

Tags: