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South African Energy Minister Dipuo Peters announced that the process of establishing an Independent Systems Operator (ISO) for the electricity industry was moving at a “faster pace” than anticipated, and that the establishment legislation would be tabled before April 2010.
Addressing Trade Ministers and Commissioners, and business people during the South African State visit to the UK on Wednesday, Peters explained that the ISO was intended to level the playing field between electricity producers and consumers “in a manner that protects the smaller players from potential market abuse by the bigger players”.
The need for an ISO was first outlined by President Jacob Zuma in his State of the Nation address, and further dscussed by Peters in her Budget Vote Speech of 2009/10.
Peters further stated that the generation license, renewable energy feed-in-tariff, the ISO, the power purchase agreements (PPAs) and the liquidity of the ISO were the essential characteristics of viable independent power producers (IPPs).
“We are currently working on parallel processes. Our ultimate objective is to ensure that all these systems are in place as quickly possible. The National Energy Regulator of South Africa (Nersa) is currently putting together procurement guidelines as prescribed in the New Generation Regulation and through the collaboration of the Department of Energy (DoE), Nersa and the National Treasury there will be a standardised PPA,” assured Peters.
She noted that governments were responsible for the creation of an atmosphere conducive for uninterrupted business activity, and said that South Africa would continue to do this through appropriate policy formulation and implementation as well as by providing regulatory certainty.
“We have, however, noted that the investment by the private sector has not happened on the scale that was originally envisaged. In 2006, South Africa committed itself to a target of a minimum of 30% participation by the private sector in our electricity generation,” Peters admitted.
She also said that the government recognised the need to diversify its energy supply by developing advanced, nonpolluting, more efficient, affordable and cost-effective energy technologies to meet the rising global demand for energy, and particularly in developing countries.
“Cognisant of the threat of climate change, we also recognise that it is important to balance our exploitation of fossil fuel resources with alternative energy options that could help mitigate and even reduce the impact of increasing greenhouse gas emissions.”
She spoke of the government’s 10 000 GWh target for renewable energy generation by 2013, and added that the Department was in the process of reviewing the Renewable Energy White Paper in order to come up with more ambitious medium-term and long-term targets.
She emphasised that the DoE would continue supporting renewable energy project developers in order to scale up the development of these technologies as rapidly as possible.
She explained that the department was collaborating with the Clinton Foundation on a concentrating solar power “solar park concept”, and anticipated that South Africa would continue to see more large renewable energy projects being comissioned.
“South Africa seeks capacity and skills development for methods and data that would enable the authorities, investors, power sector and industry to investigate and plan for large-scale exploitation of wind power for electricity generation. The Wind Atlas can find applications in at least two areas, namely to assist in the development of large grid connected wind farms and to provide more accurate wind resource data to identify potential off-grid electrification opportunities.”
The DoE, Eskom and Council for Scientific and Industrial Research were also said to be jointly funding the development of an off-grid electrification planning tool based on harnessing renewable energy resources. However, this off-grid electrification planning tool was dependent on good quality resource data and inputs.
She also highlighted that because of limitations in skills on the necessary technologies, it was anticipated that through relations with countries such as the UK “we could be able to get assistance”.
Peters also drew attention to potential opportunities and links between the two countries with regard to the Clean Development Mechanism. She discussed the country’s nuclear energy ambitions, and said that involvement in the envisaged PetroSA refinery was the “opportunity of a lifetime”.
“We have an open door policy in respect of our policy formulation processes and we are therefore issuing a specific invitation to you as business people from our two countries to play a role in our energy projects. This has the potential to benefit our two countries and could be extended to the sharing of lessons, expertise as well as good practices,” Minister Peters said.
- Engineering News
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