[DEBATE] : (Fwd) Eskom crits mount
pbond at mail.ngo.za
Tue Nov 13 13:05:11 GMT 2007
RE: R1,13 TRILLION FOR ELECTRICITY?
In a small story titled "Eskom may increase tariffs" a story in the
Daily Dispatch, Sat 10 Nov, stated that Eskom wants to raise electricity
tariffs by 18 per cent because power stations will cost - R1,13 trillion
over the next 20 years. This was blamed on the rise of coal prices.
There was no mention of the word "nuclear".
Eskom CEO, Jacob Maroga said: "One power station is about R8 billion. To
be able to afford these big cables what it means is that the cost of
electricity we're accustomed to will have to go up".
The National Energy Regulator of SA (NERSA) will make a decision in
December - based on Eskom's request for the 18 per cent price hike.
What is strange, is that this story says nothing about Eskom's ambitious
nuclear programme for South Africa. According to Terrence Creamer on
SAFM live, Eskom plans to use not only one, but all five sites that are
currently being investigated for the construction of a Pressurized Water
Reactor (PWR). They plan to build 3 200 MW/3 300 MW nuclear plants at
Oyster Bay, Pearly Beach, Bantamsklip, Koeberg and Kleinzee.
If these high costs - 18 per cent increase - are due to the nuclear
programme, then Eskom is negligent in not informing the public that this
is what they will be paying sky-high electricity bills for. Surely it
cannot be acceptable for the government to simply leave the word
"nuclear" out of all further stories about price hikes? How is the
public supposed to make informed decisions and participate in governance
The people of South Africa must address their complaints about this
steep price hike to NERSA. How are the poor of this country going to
cope? Some do have "free basic electricity subsidised" but it still
means that prices of everything - basic necessities like food and
services will go up. We do not have the social welfare system and high
employment rates of other nations that can cope with more expensive
People of South Africa also need to make a firm statement about who is
using most of our electricity supplies. It is time for Eskom to stop
blaming the domestic consumer and start taking industry to task. It is
time for Eskom to stop courting mega-industries like Rio Tinto's
aluminium smelters and arms manufacturers Thyssen-Krupp and offering
them beneficial deals, while local businesses suffer cut-offs.
10 Bower Street
SUSTAINABLE ENERGY NEWS on EMAIL (SENSE)
Number 47: November 2007
Welcome! SENSE is a service of the Energy Policy Unit of the Sustainable
Energy and Climate Change Project (SECCP) of Earthlife Africa
Johannesburg (ELA Jhb).
SENSE is a regular publication, edited by Tristen Taylor. We welcome any
feedback and submissions. Also, let us know if you wish to get more
information from ELA Jhb, or know someone else who should be receiving
SENSE. Please note that the material in SENSE (in particular the
Editorial) does not necessarily reflect the positions or policies of
Earthlife Africa Jhb and/or the SECCP.
Tel: +27 11 339-3662
Email: seccp at earthlife.org.za
To download a PDF copy of this SENSE edition, go to:
2. SECCP News—Eskom Shreds the Economy, Eskom's Tariffs Explained,
Energy Caucus Meeting, Two Views on the Energy Summit
3. SA Sustainable Energy News—Solar Water Heaters and the Poor, Cape
Town's Solar-powered Robots
4. SA Unsustainable Energy—Industry Gets Some Stick, Transnet's
Pipeline, Sugar Industry Punts Biofuels, SASOL to Expand Secunda Plant,
SA's Enriched Nuke Addiction, Backdoor Privitisation of Eskom
5. SA Energy Policy & Analysis—Ignoring Peak Oil, Peak Oil and the
Militarisation of Africa
6. African Energy News—Oil Bazaar in Tanzania, Uganda's Biofuels, Eskom
Turns off the Lights in Namibia
Nearly a hundred dollars for a barrel of oil. So much for the age of
cheap oil, and welcome to the peak in global oil production. If many
leading geologists are correct, global rates of oil production are
either in or about to begin terminal decline. Simply put, we are running
out of oil on a global scale, and this is the underlying reason for the
ever increasing price of oil; not market jitters over a possible Turkish
invasion of Northern Iraq.
As any classical economist would tell you, when the supply of a good is
less than the demand for that good, the price will rise. Under the
standard view of resource scarcity, informed market consumers would then
purchase an alternative resource or reduce their demand (i.e.
consumption). Neither of these looks likely for oil. One, there is no
alternative to petroleum as a major source of global energy at present.
Two, demand will keep on increasing as the modern global economy is
based upon using petroleum as an energy source (Will shipping, flying,
agriculture, plastic manufacture stop? I think not.). Three, emerging
economies such as China and India require additional petroleum to fuel
economic growth. Therefore, the price will continue to rise.
Nor are biofuels and coal to liquid technology the solutions. In regards
to biofuels, we simply do not have enough arable land available for
biofuels production to replace petroleum to a significant degree. End of
story. SASOL-like technology is incredibly inefficient, produces massive
C02 emissions (trading oil supply woes for the greater headache of
climate collapse), and will hasten the crisis of Peak Coal (another
finite resource). The only worthwhile future is a transition away from a
fossil fuel economy on a global scale, and no one is talking about that.
What does this mean for South Africa & Africa? In the SA Energy Policy &
Analysis section of this edition, the Association for Peak Oil South
Africa gives its predications, and the effects of peak oil on the
militarisation of Africa are illuminated.
While SENSE does cover Eskom recent load-shedding (wet coal...sure) and
points out the role of industrial users in supply problems, it also
covers the sticky issue of tariffs. The SECCP has recently completed a
study of Eskom's domestic tariffs, with the conclusion that poor suffer
unjustly. SENSE also notes that the backdoor privitisation of Eskom has
begun, with private industry to generate 30% of all power. Here's
another prediction; this will mark the beginning of a long and dirty
road to a deregulated energy industry with spot markets, greedy
electricity traders, rising prices, and the end of the dream of free,
basic electricity for all. SENSE will continue to cover further
The good news is that robots in Cape Town get solar power. That should
help prevent traffic congestion when Eskom next flips the switch on us
and not (due to penalty clauses in supply contracts) to the big
Finally, this edition of SENSE includes a recap of the Energy Summit.
Rewriting the 1998 White Paper? We'll see.
Energy Policy Officer
Earthlife Africa Jhb
7th of November 2007
2. SECCP News
Press Release: Eskom’s Load Shedding and Industrial Power Usage
Earthlife Africa Jhb
11th of October 2007
Over the past few days, Eskom has been engaged in load shedding and
encouraging domestic users to conserve electricity. In the process, a
few key facts have been conveniently omitted.
The greatest users of electricity are not domestic users, who account
for only 17% of electricity users. The greatest users of electricity are
industrial factories; 29 companies consume 40% of all electricity.
Furthermore, the demands on electricity supply up to 2050, according to
the Department of Minerals and Energy figure, are primarily due to
Despite being the most-intensive users of electricity, industry pays
half the tariff that domestic users do (an average of 29c per kwh
compared to an average of 17c per kwh). This has an obvious effect on
Eskom’s ability to generate, transmit and distribute electricity.
Furthermore, Eskom and the Government have committed themselves to
large-scale supply of electricity to individual and foreign companies at
reduced tariffs; this at a time when Eskom struggles to supply citizens
with electricity. Thirty percent of all South Africans are still not
connected to the electricity grid.
An example of how Eskom and the Government are favouring foreign
companies over the interests of South African households is the
electricity supply deal to the Canadian aluminum-smelting firm Alcan.
For the past two years, Earthlife Africa Jhb has consistently called
upon the Department of Trade and Industry (DTI), the Department of
Public Enterprises, Eskom and Alcan to disclose the details of
electricity sales to Alcan for its proposed smelter. Both the South
African Government and Alcan have hidden behind a profoundly
anti-democratic clause in the Developmental Electricity Pricing
Programme (DEPP). Alcan is the first foreign company to benefit from the
DEPP, and has signed a 25-year deal for 1350MW supply of electricity.
This represents about 4% of the entire country’s usage.
What is the DEPP? Essentially, the DEPP provides for uniquely discounted
electricity tariffs for foreign industries that are heavy consumers of
electricity (over 50MW) in South Africa. In return for investment in
South Africa, the DEPP will ensure that electricity tariffs are
internationally competitive (our nearest competitor is Australia, which
sells electricity at US$0.053 per kwh and is 30% more expensive) and
that the industry in question can achieve an profitable internal rate of
return; i.e. if electricity is a major overhead (such as in aluminum
smelting), it the tariff will be low enough to ensure profit.
This is a significant incentive for heavy industry to invest in South
Africa and is supposed to provide significant jobs. However, what it
really does is commit Eskom to tariffs for heavy industry at a rate
lower (or, at most, on par with the next cheapest supplier of
electricity) than anywhere else. It is, in effective, a subsidy for
foreign industries, similar to a tax break or import duty waiver.
The most worrying factor about the DEPP is the “built-in” secrecy
clause. Eskom is a public enterprise, ultimately owned by the citizenry
at large. However, the DEPP guidelines ensure that any contracts signed
under the DEPP are to remain secret. This is profoundly anti-democratic.
The DEPP states (clause 12.1):
"All officials, employees or members of the Department, the adjudication
committee, NERSA, Eskom and non Eskom distributors shall regard as
confidential all technical information, records, particularly any
strategic commercial information and all knowledge that pertains to any
project that applied for benefits in terms of DEPP, whether such
information is recorded on paper or in an electronic manner."
The very next clause (12.2) in the guidelines bounds individuals with
knowledge about the contracts to silence for the rest of their lives.
If the DEPP is a method for promoting growth and development in South
Africa, why then the secrecy? Why shouldn’t this be in the public
domain? This clause gives foreign corporations like Alcan the right to
build electricity-intensive industrial plant in South Africa, get
electricity on favourable terms in relation to their expected rate of
return, and not to have to tell the country at large what rate they
purchased electricity from the South African state.
Further, this clause seems at odds with the spirit of the Promotion of
Access to Information Act, through a pre-emptive strike against the
releasing of information.
The DEPP deal with Alcan means that the citizens of this country won’t
know the answers to the following questions:
* What is the price of electricity agreed upon by Alcan and Eskom?
* What are the conditions of supply of electricity?
* Will the price paid to Eskom cover the indirect costs of smelter? For
example, the environmental group TWIG has calculated that the indirect
costs of harm to the environment based on Eskom CO2 emissions to supply
the smelter with electricity would be R6.4 billion.
The question that should be asked when Eskom turns off the lights is;
why, if Eskom can’t supply electricity to the citizens of this country,
is it offering foreign companies large amounts of power at reduced
tariffs? Must individuals and small businesses suffer so that large
industries can be assured profit?
ESKOM’S Tariffs - A Briefing for Activism
by Lerato Maregele, SECCP, Earthlife Africa JHB
ESKOM is a South African corporation dealing with the generation,
transmission and distribution of electricity in South Africa (SA), also
active in other African countries. Ownership of ESKOM is vested in the
SA government and the electrical utility is acknowledged as the
lowest-cost producer in the world.
Eskom operates a number of notable power stations including Kendal Power
Station, the largest coal-fired power station in the world and Koeberg
Nuclear Power Station. While ESKOM generates up to 95% of the
electricity used in SA it is not the only distributor. ESKOM sells
electricity to industries, mines, distributors (such as municipal
councils), and other stakeholders.
Distributors re-sell the electricity to their customers – sometimes at
exorbitant prices, which frequently their customers cannot afford. This
re-distribution scheme can have considerable negative impact on the
socio-economic life of the customers, especially domestic users. There
are different tariffs for the electricity used by households in South
Africa, with rural areas often subject to higher costs. Township
residents will often pay more for electricity than their more affluent
suburban counterparts, despite being based in the same city. Residents
of Tembisa in Ekurhuleni are paying about 31% more than residents in the
nearby wealthy suburb of Sandton.
Industry, particularly energy-intensive industry, benefits the most in
this regard. Average electricity prices for the manufacturing and mining
sector in South Africa have been in the order of 16c per kWh, while
deals are negotiated with large consumers (e.g. ALCAN COEGA) for lower
tariff rates. In fact, South African industry enjoys the lowest charges
for electricity in the world, around 40% lower than the next cheapest,
This paper explores the practice of Eskom’s various charges for
electricity to its different customers. Further, it will demonstrate the
difference in tariffs between Eskom-supplied customers and those
customers whose electricity is provided by municipalities. Section 2
will cover the average tariff rates charged by Eskom in South Africa to
different customers. Section 3 will look at a case study for the
Ekurhuleni Metropole, one of the municipalities in the country that is
selling electricity to its different customers at relatively high
prices. Poor people are the ones who suffer most from these pricing
Download the Entire Document:
Energy Caucus Meeting
The Energy Caucus will be meeting in Cape Town from the 14th to the 15th
of November 2007. Key issues under discussion will be renewable energy,
electricity tariffs and transport.
The South African civil society Energy Caucus is a grouping that
includes organised labour, faith and indigenous peoples' groups as well
as NGOs and CBOs that are committed to working for a just transition to
sustainable energy. The Energy Caucus, which was first convened in June
2002, is held together by a set of 33 principles.
For more information on how to attend, please contact: Maya Aberman,
Earthlife Africa Cape Town, coordinator at earthlife-ct.org.za, 021 447 4912
Energy Summit I
By Richard Worthington
The Department of Minerals and Energy (DME) ran a National Energy Summit
25-27 September to initiate a review of energy policy in the light of
evolving national circumstances. While climate change did receive some
attention, the primary focus was on security of energy supply. At the
risk of being cynical, one might conclude from the balance of
proceedings that the objective of the Summit was to legitimise a massive
expansion of the use of coal and nuclear power. However, the process for
policy review will run through next year and include a series of
provincial ‘mini-summits’ to provide for public participation, as well
as compilation of all stakeholder submissions on the department’s website.
In addition to the three new coal-fired power stations proposed by Eskom
in the short term and Sasol’s proposed new coal to liquid fuels (CTL)
Maphuta project – at 80 000 barrels per day, half the size of Secunda –
now PetroSA is apparently also keen to build a CTL plant. With CTL
product involving a carbon footprint double that of oil-based fuels,
South Africa is clearly looking at rapid growth of greenhouse gas
emissions before any substantial effort to limit emissions is initiated.
It would be a bitter irony if concerns about the international depletion
of fossil fuels is used to justify massively expanded and accelerated
Climate change is, of course, sited as a major motive for planning for
20 000 MW of new nuclear power, but it is acknowledged that the
timeframe for this is a lot longer. What does not seem to be have been
thought through is the contribution that expansion of the nuclear
industry (including the proposal to enrich uranium for export – another
energy-intensive industrial initiative) will make to growing energy
demand, and thus security of supply challenges, in the short to medium
term. While the rate of greenhouse gas emissions from the nuclear fuel
chain are disputed, and vary according to the source of energy for
enrichment, the fact that nuclear power plants have the longest energy
pay-back period of any bulk generation option is uncontested.
It was dismaying to hear that well below half of the R14.2 million made
available to the DME’s Renewable Energy Finance and Subsidy Office has
been utilised, due to a lack of “bankable” projects being developed, and
that the balance has been retained by Treasury. This makes work on a
mooted top-up feed-in tariff all the more urgent – a study commissioned
by the energy regulator is underway and the DME is commissioning “our
own” study. With this measure now adopted in
41 countries, a protracted process would be indefensible. Given the
suggestion by Eskom that their target of 2% of electricity from
renewable resources by 2025 (yes, in 18 years) is ambitious, it seems
high time that the concentrating solar power project (100 MW of
generation capacity with thermal storage to allow for supply during the
highest demand peak) is located elsewhere.
Why is government prepared to risk R6 billion on a speculative nuclear
technology (the PBMR, moved outside of Eskom) but not implement the
commitment of the 1998 Energy Policy White Paper “to ensure that an
equitable level of national resources is invested in renewable energy
technologies” – as reiterated in a paper released by DME at the Summit?
Clearly the review of policy needs to look at why some key provisions
have not been implemented, particularly those that are most consistent
with the current context of a developmental state.
In his Summit speech DME DG Nogxina said "The democratic state would
[therefore] have to clearly define the beneficiaries of its energy
policy. The success of implementation of the White Paper of 1998 should
be measured by the degree to which it would have changed the fundamental
framework of the previous apartheid regime."
To achieve such a transformation, energy must be liberated from the
minerals sector. For our children to be counted amongst the
beneficiaries of energy policy, we must start the transition to
sustainable energy now. Thus a logical conclusion of the policy review
would be to split the DME.
A sweet irony that may arise from this would be the realisation of the
folly of the assumption expressed at the summit as: “We have 300 years
of coal and we must burn it!” We are constantly finding new ways of
utilising hydrocarbons and simply burning all our coal (particularly in
power plants in which up to two-thirds of the energy is wasted on the
spot) is far from the most value-adding option. CTL is even more
wasteful. Following current planning trends our coal reserves are
unlikely to last even 100 years, but competing applications and
escalating costs would bring us to our senses long before that. However,
climate change requires that we come to our senses now.
It will take time, starting from our very small base, to scale up the
utilisation of the renewable resources from which we currently fail to
derive any value. It will probably take more than eighteen years to
reach the point at which the use of fossil hydrocarbons as combustion
fuels becomes the exception rather than the norm – though this very much
depends on the level of effort on the global scale. What would be
ruinous to our economy, as well as our climate and local environment, is
if the contribution of renewable resources to electricity supply is
anywhere close to only 2% by 2025.
Increasingly the world is realising that minerals and energy has become
a marriage made in hell. It is a union that has brought many benefits,
but is clearly not sustainable into the future. A divorce is one that
even the pope would have to bless. While we’re at it, let’s also
liberate renewables from Eskom.
Energy Summit II
By Sibusiso Mimi
The South African government, through the Department of Minerals and
Energy (DME), has launched a process to review the main South African
energy policy – the 1998 Energy White Paper. The DME Energy Summit, held
in September 2007 was a commencement of a process to review of the South
African premier energy policy document. The following objectives are set
in this document:
- increasing access to affordable energy services;
- improving energy governance;
- stimulating economic development;
- managing energy-related environmental impacts; and
- securing supply through diversity
According to Sandile Nogxina (DG of DME), “These objectives reflect the
need for achieving a balance between sustainable growth, economic
growth, environmental management and securing of supply issues in the
energy sector. They also sought to undo the distortions created by our
In essence, the 1998 Energy White Paper is measures to manage the fierce
contestation between various vested interest involved in the energy
sector. For example, stimulating economic development does not in any
way imply disregard of safety measures in mines resulting to tragic
fatal accidents as reported through media during the past few months.
The question we therefore should be asking ourselves is whether the 1998
Energy White Paper provides an enabling legislative framework with which
to manage this fierce contestation of vested interests?
We should be cognizant of the fact that the distortions created by our
apartheid past could create misleading impressions to think that
economic growth and development is more urgent than the rest of other
interests involved in the energy sector.
For example, the Developmental Electricity Pricing Programme (DEPP)
which opens South Africa to international intensive-energy users by
luring them with ridiculously-low electricity tariffs prices; tariffs
that won’t contribute towards the revitalization of our energy sector.
The economic reliance on energy-intensive and polluting heavy industry
was a hallmark of the Apartheid regime, and the new South Africa should
be looking at energy policy that provides for all citizens, not a select
Therefore, the policy review process affords us an opportunity to first
assess whether the 1998 Energy White Paper did uphold its mandate to
manage the contestation of interests involved in the energy sector. In
essence, has it provided an enabling legislative environment to deliver
on objectives as set? Has the environment in which the objectives were
set changed in anyway and, therefore, do we need to give priority to
some other interests or omit others?
In sake of a vigorous debate on energy issues in South Africa, we need
to review the interpretation of the objectives as set in the 1998 White
Paper – energy security issues seem to have lost their meaning. For
example, securing supply through diversity has lost its meaning as
resources are inequitably channeled through nuclear and coal-fired
plants for new generation leaving renewable energy out in cold. Another
example of falling short to the objectives is a delay in passing the
National Energy Bill which would provide a regulatory and legislative
framework and improved energy governance.
Nonetheless, the Energy Summit and the review process of the 1998 Energy
White Paper provide the stakeholders in the energy sector an opportunity
to reconsider priorities. Provincial energy summits will also impart
grassroots-level an opportunity to be heard provided that the
consultation process is genuine and the communities are prepared for a
genuine participation rather than the practiced statements seen at the
Summit from youth and children!
3. SA Sustainable Energy News
The Poor Fly Under the Solar Water Heating Radar
By Gail Jennings
CAPE TOWN, Oct 12 (IPS) - Earlier this year, IPS reported that the South
African coastal city of Cape Town was debating a "first of a kind" bylaw
that would make solar water heating compulsory for relatively costly new
buildings, and certain renovations. This got us thinking: what of solar
water heating for less expensive structures -- especially homes being
built under the country's extensive low cost housing programme...Are any
initiatives on the drawing board in this regard?
Since coming to power in 1994, the African National Congress government
has spearheaded the building of low cost, subsidised houses to overcome
the homelessness created by apartheid. However, many of these structures
are what is termed "core houses", meaning they lack flooring, geysers
and other amenities.
Solar water heaters (SWHs) can be somewhat expensive to install; but
this cost is normally recovered within a few years through energy
savings that continue long after the units are paid for. The heaters can
provide an environmentally friendly source of hot water for low income
housing residents, and cut their household water heating bills in the
long run -- good news all round, surely, especially if financial aid
were provided to help people get a foot on the SWH ladder.
Not necessarily, it seems.
Low energy usage
"Generally, people living in low income households don't spend enough
money on energy for water heating," Andrew Janisch of Sustainable Energy
Africa, a Cape Town-based consultancy, told IPS. "As a result, the
saving from using solar energy for this purpose would not repay the
upfront cost of the solar water heater, even with attractive financing
A solar water heater is made up of a hot water storage tank or geyser,
and a roof-mounted panel (called a "collector") that absorbs the sun's
energy and uses it to heat the tank water.
The cost of SWHs ranges from about 500 dollars to 2,200 dollars,
depending on factors such as the volume of the tank and the square
meterage of the collector -- and whether a high pressure water flow from
the tank is required for bathroom and kitchen equipment.
"It's a tough issue," said a project manager at a Johannesburg-based
company that is co-ordinating an initiative offering incentives for the
installation of solar water heating systems in several houses for the
middle and upper income brackets.
"We used to look at government subsidised houses, but it was just too
expensive in the greater scheme of things," the manager told IPS. "Add
the cost of a geyser to the 49,000 rand (about 7,000 dollars) per house
subsidy, and it would not fit the bill."
"We're still taking our lead from our previous minister of minerals and
energy: she directed us not to force technologies onto low income
housing," the manager added. "These things must go on the houses in
Sandton to create the aspiration among low income households, was her
message." (Sandton is a wealthy suburb of Johannesburg, South Africa's
These observations are echoed by Peter Lukey of the chief directorate
for air quality management and climate change in South Africa's
Department of Environmental Affairs and Tourism.
"We must avoid the 'ghetto-ification' of renewable energy. Solar should
never be seen as second class power," he told IPS.
"In South Africa, we need to take into account our vulnerability to
climate change, and focus on where we can make the biggest impact. It is
not the poor who are polluting with their energy use -- it's middle and
upper income households."
As a result, SWH initiatives remain focused on the relatively wealthy,
and the downright rich. In the case of low earners, "Either the
government must pay, and it's too expensive, or the individual must pay
-- and it's too expensive," said Lukey.
Red more: http://www.ipsnews.net/print.asp?idnews=39639
Robot the blackouts can’t stop
By Anton Ferreira
14th of Oct. 2007
Solar traffic light shines through load-shedding.
As blackouts plague South Africa once more, there’s one set of traffic
lights in Cape Town that keeps working regardless — it’s powered by the
sun. Switched on two weeks ago as a test project, the lights run off
batteries charged by a solar panel that converts the sun’s energy to
If the lights prove reliable and cost-efficient, the city plans to
install more of them. The solar-powered traffic lights have been
equipped with light emitting diodes, which use far less power than light
bulbs and last much longer.
Barry Bredenkamp, operations manager for the National Energy Efficiency
Agency, said the solar robots were the first of their kind in the country.
“Cape Town could be at the forefront of a significant technological
revolution if it works,” he said. “Every other municipality will want to
jump on board because they all have serious problems with traffic
signalling and power failures.”
What happens when the sun is obscured by cloud for days on end, as it
often is during Cape Town winters? The lights will continue working
because they have a back-up connection to the Eskom grid.
4. SA Unsustainable Energy
Spot those power gobblers
17th of Oct. 2007
My sympathies to all fellow load-shedders who Eskom treats like
mushrooms - kept in the dark and fed copious loads of deceptively
Now I'm all for saving as much electricity as possible by switching off
the geyser, installing compact-fluorescent light bulbs and other
We have a crisis on our hands, and it's too easy to blame Eskom alone.
Every South African needs to use electricity wisely - not just to avoid
blackouts, but because we have a wider international role to protect the
world from global climate change and harmful levels of air pollution.
Our electricity is among the cheapest in the world. The nation produces
1.4% of global greenhouse gas emissions, yet makes up less than 0.8% of
the world population. But it is very misleading to talk collectively
about "us" or "we", because some South Africans use vastly more
electricity than others. In fact, much of our power is not used by South
Africans at all - but by multinational industries, which remit profits
to shareholders overseas.
This is not a unique situation. Most countries fall over themselves to
woo foreign investors. The point, however, is that when a country faces
a major electricity crisis one would expect the government to discourage
more energy-intensive foreign investment until the crisis is resolved.
Yet it's still business as usual here.
Which is why Eskom's selective load-shedding and energy-saving campaign
smacks of hitting soft targets rather than profligate users.
It's all very well asking Joe Citizen to curb electricity use in the
national interest, but I've yet to see serious attempts by Eskom to
target big-industry holy cows, which gobble the largest chunks of South
Eskom spokesman Andrew Etzinger assured me some large industries also
"took a big hit" during the latest bout of load-shedding last week.
Though he had no detailed statistics to hand, Etzinger said one example
was the BHP Billiton aluminium group, which apparently cut production by
50% to 90% for part of last week.
Finding reliable data on SA electricity consumption is tricky, but
National Electricity Regulator statistics suggest that the residential
sector (you and I) use 17% to 19% of the total. By contrast, heavy
industry uses 60%, with the remainder going to the commercial farming
The environmental group Earthlife Africa alerted me to the presence of a
very influential group of industrial holy cows known as the Energy
Intensive Users Group (EIUG).
This powerful lobby group has 25 members who collectively use 40% of
SA's electricity. It was set up in 1999 to ensure "internationally
competitive" (read cheap) prices for members. Unfortunately, its website
seems to be on the blink, its Rivonia telephone number rang unanswered
yesterday and I was unable to reach the EUIG chairman or deputy chairman
at Anglo HQ before deadline.
But I think it would be very illuminating to identify them and find out
what contribution they made to load-shedding over the past year - before
we are forced to swallow nuclear power at their behest.
Transnet gets nod to build R11bn pipeline
14th of Sept. 2007
TRANSNET pipelines, formerly Petronet, has been granted the coveted
licence to construct the R11bn multi-product pipeline that will
transport petroleum products from Durban to the industrial heartland of
Gauteng. Transnet pipelines beat the black economic empowerment firm
Ipayipi Consortium for the lucrative licence.
Transnet CEO Maria Ramos said yesterday the company was “heartened” by
the decision of the National Energy Regulator of SA (Nersa). She said
the decision recognised Transnet pipeline’s role as a key strategic
player in the effort to achieve security of fuel supply in SA.
“Our track record as an operator is clear evidence that we are a good
option and we are heartened by the faith bestowed on us to deliver this
vital economic infrastructure on time and within budget,” said Ramos.
Ipayipi was dejected, CEO Deyar Natha saying: “We are disappointed that
we didn’t get the licence. We received a very bland letter from Nersa
and we don’t know why our application was turned down.”
Nersa said it would provide reasons for its decision “in due course”.
The regulator would make an announcement on Transnet pipeline’s tariffs
in due course.
Nersa said the new 24-inch pipeline was expected to be operational by
the third quarter of 2010, by which time the existing pipeline was
expected to be short of capacity.
The new pipeline is intended to mitigate the shortfall of petroleum
products in the interior of the country.
Industry players said current demand exceeded product pipeline capacity
by two billion litres a year. Consumption in the inland market was
expected to reach 17-billion litres by 2010, up from the current average
of about 14-billion litres.
The demand was expected to increase to 40-billion litres a year by 2030.
Read more: Link:
S.Africa sugar industry pushes for biofuels policy
By Muchena Zigomo
22nd of Oct. 2007
JOHANNESBURG (Reuters) - South African sugar producers will be loathe to
invest in biofuels until the government finalises a long-delayed biofuel
policy, the chairman of an industry body said on Monday.
Rodger Stewart, chairman of the South African Sugar Asociation (SASA),
said until there was a definitive policy on biofuels the local industry
would invest little in ethanol production.
South African officials have released draft biofuels policy documents
with proposals on issues like ethanol and biodiesel blends but an
apparent wrangle over the more contentious matter of state subsidies has
stalled a final policy.
The Southern African Biofuels Association says it needs between 2
billion rand and five billion rand a year from the government to get the
capital intensive industry off the ground.
"I think the problem is that we're in a policy vacuum at the moment.
What we need first for ethanol (production) to work is a clear policy
and at the moment the policy environment is not clear," Stewart told
South Africa is expected to unveil its own biofuels policy this year and
officials hope it will open up new markets for producers in the
struggling farming sector.
The government wants biofuels to provide up to 75 percent of its
renewable energy needs by 2013, joining the global push for cleaner
energy alternatives to harmful fossil fuels.
Ethanol and biodiesel are eco-friendly by-products of crops like sugar
and maize and are already being widely used in cars in countries like
Brazil, the world's largest sugar producer.
"There are things like mandated ethanol content in fuel mixes, among
other issues, that we would need in the policy in order for this to be a
success in South Africa," Stewart said.
Science and Technology Minister Mosibudi Mangena said in July the
government was unlikely to meet demands for subsidies to help a nascent
biofuels sector but industry players say without such support they would
battle to make profits.
Mangena said subsidies would not go down well with many parts of the
farming community which have seen their livelihood shrink since
post-apartheid South Africa cut agricultural subsidies.
However, without some assurance of assistance from the government to
ensure profitability, local sugar industry players would remain
reluctant to invest in ethanol production, Stewart said.
"I would say there would definitely need to be an economic incentive for
farmers to move into ethanol," he said.
Sasol Orders New Reactor as Part of Synfuels Expansion to Meet SA
Growing Demand for Fuel
18th of Oct. 2007: 06:38 AM EST
JOHANNESBURG, South Africa, Oct. 18 /PRNewswire-FirstCall/ -- Sasol
today confirmed that it had awarded a contract to Japanese manufacturer,
Hitachi Zosen Mechanical Corporation (HMC), a wholly- owned subsidiary
of Hitachi Zosen Corporation, to construct a Sasol Advanced Synthol
The new SAS reactor is needed for Sasol to increase its 150 000 barrel a
day (b/d) synthetic fuels operation at Secunda in South Africa by 20% to
180,000 b/d by 2015. Sasol uses it's advanced Synthol reactors to
produce synthesis gas which is converted into a large range of valuable
liquid fuels and chemical products.
"Sasol supplies about 35% of South Africa's liquid fuel needs. The
Secunda expansion project will help us meet major growth opportunities
in both our domestic and international markets. We will use both natural
gas and coal as feedstock to produce our advanced range of synthetic
transportation fuels," says Sasol executive director Dr Benny Mokaba.
South Africa seeks partners to develop nuclear fuel: The government is
in the "early stages" of talks with international companies...
By Patrick Donahue
19th of Sept. 2007
South Africa is seeking foreign partners to enrich uranium as part of a
strategy to expand the country's nuclear-energy program in the next few
decades. The government is in the "early stages" of talks with
international companies and countries that could enable it to use
centrifuges in producing low-enriched nuclear fuel, Tseliso Maqubela,
the chief nuclear director of the Energy Ministry, told reporters.
"We would prefer to do enrichment with partners," Maqubela said at a
briefing in Vienna, part of a meeting of the International Atomic Energy
Agency. "The timeline that we have is going to depend on how much
progress we make in attracting partners," he said.
The government is targeting partners that have mastered centrifuge
technology, which produces atomic fuel by spinning uranium gas at high
speeds, he said. In 1993, South Africa became the first nuclear-armed
country to verifiably dismantle its weapons after the fall of the
Energy Minister Buyelwa Sonjica said the country aims to generate 20 000
megawatts of nuclear-produced electricity by 2025. The government plans
to reach an agreement with vendors in the next six months to build an
advanced pressurized water reactor that will initially generate as much
as 3 500 megawatts of electricity by 2016.
Sonjica in February announced plans to tighten control over uranium
reserves to ensure adequate supplies for the country's nuclear program
for 40 to 60 years.
The country plans to use more nuclear energy as it runs out of coal, its
main source of electricity.
The announcement came as South Africa reaffirmed its opposition to
"Nuclear weapons ownership does not serve any deterrent purpose
whatsoever, but fosters insecurity and instability," Henk Roodt, a
counselor at the South
African High Commission in London, said yesterday at a conference on
weapons of mass destruction. "South Africa remains one of the only
countries to unilaterally disband its nuclear weapons arsenal, thereby
demonstrating to the international community that disarmament is not a
political illusion," Roodt told the London meeting.
Private Electricity Producers Receive State Backing
By Hilary Joffe
26th of Sept. 2007
THE government hopes to see the private sector come in to build new
coal-fired power stations to help meet SA's electricity needs in the
next couple of decades, as it gives effect to its plan to get
independent power producers to build 30% of the new capacity the country
will need by 2030.
This could add large private coal-fired base-load stations to the two
smaller gas turbine plants that a private sector consortium led by US
AES is to build, at a cost of R5bn, after the state awarded the
consortium the contract last month.
Eskom will buy the electricity from the new plants in terms of a
decision by the government to make Eskom the single buyer of power
generated by new independent power producers.
Public enterprises department director-general Portia Molefe said
yesterday it was logical coal-fired power plants would be included in
the new capacity independent power producers would build, given that the
government wanted new producers to build 30% of the new capacity, but
the private sector would not be participating at all in the nuclear
The government's draft nuclear energy strategy makes Eskom the only
provider of nuclear power in SA, and nuclear generated power is expected
to account for about half of the 40000MW of new generation capacity SA
will build in the next 20-25 years.
Molefe said it was up to Eskom to figure out how to reintroduce private
sector players on the coal side. No plans for new privately owned
coal-fired power stations had been proposed at this stage.
Eskom CE Jacob Maroga said it was keen to see independent power
producers develop in SA. It would mean the big build programme would see
more people coming
in to risk capital in the market. Some of the independent producers
could also unlock new supply lines and bring in skills.
Molefe emphasised the potential importance of independent producers in
giving SA access to equipment which was in short supply globally.
Eskom will spend more than R200bn to expand its generation, transmission
and distribution capacity. It has said it would announce details next
year of its plans for at least one nuclear power plant. It has already
started building one new big base-load coal-fired power station, the
R80bn Medupi, which will generate about 4500MW, and was completing plans
for another. It is also recommissioning three power stations --
mothballed in the 1980s -- and has installed two open cycle gas turbines
to supply power during peak times.
Molefe said the mothballed power stations would account for 8% of the
country's new build programme, while 27% would come from coal, 46% from
nuclear, 12% from pump storage schemes and 7% from gas.
5. SA Energy Policy & Analysis
Implications of ignoring Peak Oil for South Africa
From the "Energy Futures"
The Association for the Study of Peak Oil and Gas South Africa
Economy: Inflation spikes driven by rising oil pricies; interest rates
rise to quell inflation, but depress consumer spending further; the US
economy, and the world economy slide into recession; unemployment rises
Transport: Massive price rises for air flights, road transportation;
South Africa's inadequate public transport infrastructure provides no
viable alternative; demand for motorcycles and bicycles increase, and
also for people to work from home; road maintenance costs soar and road
Food: Rising prices and fuel shortages place commercial farmers under
pressure; food prices rise significantly and severe food shortages
increase; government intervenes in the pricing and supply of food.
Climate and environment: Governments abandon negotiations to lower
carbon emissions and CO2 concentrations increase to dangerous levels
setting the course for a 2 degree increase in temperatures and
catastrophic, irreversible climatic conditions later in the century.
Download the Executive Summary of Energy Futures for South Africa at:
Download the entire report at:
Petroleum Murder: Peak Oil, Militarisation, and America’s Proxy War in
By Tristen Taylor
“We’ve embarked on the last days of the age of oil.”
-- Mike Bowlin, CEO of the US oil company ARCO (1999)
Something unheard of in human history is occurring – the global scarcity
of a number of key material resources. The word in financial quarters is
that it is impossible to buy zinc futures as the price is escalating too
fast for the market to keep up. Essentially, the global demand for
resources is beginning to outstrip production abilities, and financial
markets have entered a long and very profitable commodity boom. Mining,
oil, drilling and associated retail companies are making money as fast
as stockbrokers can cash in.
In this general climate of increasing resource scarcity, one resource
towers above all others - petroleum. Oil, fondly referred to as black
gold, is the basis of the global economy. Everything around us owes its
production and distribution to oil. Food is grown using machines burning
diesel, transported in trucks and packaged in plastics that use
petroleum as a feedstock. Our current method of civilisation is utterly
dependent on oil and if the oil supply were to dry up tomorrow, the vast
majority of us would starve to death in a matter of weeks. At best,
survivors would be scratching out a Dark Age existence amidst the ruins
of rusting BMWs and everlasting plastic Coca-Cola bottles, making snares
for rats out of computer mouse cords.
The petroleum industry is vital to the life of every human being in the
modern economy, yet it is a tightly controlled industry with only a
handful of key players (see table next page), divided amongst state and
private control. Of the ten biggest corporations in the world (as ranked
by Fortune 500), five are oil and gas companies with a combined annual
revenue of US$1,271,058,300,000.00, or 1.271 trillion dollars.1 By way
of comparison, South Africa’s Gross Domestic Product is
US$215,511,134,393.14, or 215.5 billion dollars.2
Not a great deal has changed in the petroleum market since 1900 when
Standard Oil controlled 50% of global sales.
Read the rest at: http://www.earthlife.org.za/Files/Petroleum%20Murder.pdf
6. African Energy News
Tanzania offers six oil blocks for exploration
22nd of Oct. 2007
NAIROBI, Oct 22 (Reuters) - Tanzania has invited energy explorers to bid
for six blocks in the east African nation that is fast becoming a new
frontier in the hunt for oil and gas.
According to a statement by the Tanzania Petroleum Development
Corporation seen by Reuters on Monday, the six blocks are all inland and
stretch from the southeast of the country to the northwest. Bidders have
until December 3 to submit their documents.
Tanzania has at least 14 companies exploring at sites both on and
offshore, and it has so far found three areas with natural gas deposits.
Its last licensing round was in 2004.
Prospectors are studying east Africa afresh as insecurity in other parts
of the continent and increasing energy nationalism elsewhere push them
to seek new sources.
Gas discoveries in Tanzania, and oil discoveries on the border between
Uganda and Congo has peaked interest in the region, which had been
Among the companies exploring in Tanzania are Dutch group Shell
International (RDSa.L: Quote, Profile, Research), France's Maurel and
Prom (MAUP.PA: Quote, Profile, Research), Petrobras of Brazil (PETR4.SA:
Quote, Profile, Research) (PBR.N: Quote, Profile, Research) and Ras
al-Khaimah Gas Commission of United Arab Emirates.
More information on the Tanzanian offer can be found at
Country to Get a Biofuel Plant
By Salome Alweny
The Monitor (Kampala)
21st of Oct. 2007
A local investor is planning to set up a plant which will use foodstuff
like maize, cassava and sugarcane to manufacture oil and gel for
lighting and cooking respectively. The investor, who currently imports
the biofuels (synthetic oil and gel) from their South African-based
parent company Liquifier Pty Limited, hopes to set up the plant in east
and western Uganda, by the end of June next year.
According to the General Manager of Liquifier Uganda limited, Mr Michael
Musoke, the plan is to reduce carbon emissions in the atmosphere through
reduced deforestation and consequent charcoal burning.
"Plans are underway to set up a local manufacturing (biofuel
manufacturing) plant in Uganda. It will be the only Gel manufacturing
plant in Uganda, the East and Central African region,"Musoke told Sunday
"There is a lot of garden surplus in Uganda, which we shall use," Musoke
adds, to justify where the feedstock (crops to be used to produce the
fuels) will come. He says since their operations will depend mainly on
farm produce "we shall also support the farming sector by offering them
more seeds to plant, provide farm inputs and provide the necessary
Liquifier Uganda limited became operational in Uganda two years ago but
its products were only launched last month.
Today, their products with a brand name Liquifier have found their way
in most super markets in Kampala.
Among their products are synthetic oil, which burns in specially
designed lamps (liquilamp) made of durable, hard plastic, which does not
get destroyed when used for lighting.
The Liquilamp, which takes half a litter of synthetic oil, goes for
Shs26,000 giving 60 hours of burning or lighting. According to Musoke,
the synthetic oil has been mixed with a chemical called citronella,
which is a mosquito repellant.
"When you use the liquilamp, you can also be sure you are well protected
from mosquitoes and malaria,"he says of the Liquifier product. Other
products are gel, which comes with specially designed stoves, made of
A litre of gel, which burns in the stove, goes for Shs3,600. A
five-litre gel pack goes for 18,000 and according to Musoke, it burns
for a period of three to four weeks for light cooking.
A double plate stove goes for Shs55,000 while a single plate stove goes
for Shs 42,000.
The gel is packed in consumer friendly quantities ranging from one litre
to 200 litre drums, which caters for big institutions like schools,
hotels, restaurants, and hospitals.
For hotels that have long been using spirit for warming foodstuffs
during the buffet method of serving, Musoke says the gel is a better
option as it burns longer.
Musoke describes the products as smokeless, odourless, highly portable,
leaves minimal residue after use and produces twice as much energy,
compared to gas and paraffin.
"It's also none poisonous and can be used as anti-septic on the skin,"
"Research on our products found Liquifier is a better alternative
compared to other products (such as gas and paraffin)," he adds.
Biofuels are gaining firm ground in Uganda with many companies and
individuals opting to convert arable land to enable production of the
feedstock used to manufacture fuel from the crops.
Last year, Sugar Corporation of Uganda Ltd (Scoul) requested the
government to provide 7,100 hectares of land from within Mabira Central
Forest Reserve to enable it expand it's sugar production from the
current 50,000 tonnes to 100,000 tones per annum, in line with their
plans to increase sugar production and produce power alcohol.
Read more: http://allafrica.com/stories/200710220522.html
Namibia rations power after South Africa reduces supply
9th of Oct. 2007
Windhoek, Namibia - South African electricity supplier, Eskom has cut
electricity exports to Namibia by 30 MW, triggering power rationing
which is likely to hit hard on huge energy consumers such as mining
companies in Namibia. National power utility, NamPower, which imports
238 MW from Eskom, said it is now in consultations with large power
users such as mines and local authorities to reduce their energy
"NamPower received a request from Eskom this morning to reduce
electricity demand by 30 MW due to technical problems experienced on
Eskom side," said John
Kaimu, NamPowe corporate communication manager.
NamPower said that the request also applies to Botswana, Swaziland,
Lesotho, Zimbabwe, Zambia and southern parts of Mozambique.
Eskom warned early in the week of possible power failures and called on
consumers to use energy sparingly.
The state power utility said that in addition to the continued tight
supply and anticipated severe weather conditions could cause damage to
its pylons and other critical electrical infrastructure.
NamPower said that local generating capacity remains constrained. The
Ruacana Power station, a small hydropower generating plant situated in
the northern parts of the country is only operating at full capacity
during peak periods due to low water levels.
Meantime, water levels are as low as 27 cubic meters per second, only
enough to run the station at full capacity during peak hours.
The coal fired Van Eck power station, which NamPower management says is
too expensive to run, is only generating about 80 MW. The third power
station, Paratus is generating 8MW, NamPower said.
The power utility urged consumers to turn off nonessential lighting and
office equipment during the day and overnight.
"We are not aware of how long it is going to last, and until we get
further information from Eskom, in the interim we have to implement
these measures," Kaimu said.
ENERGY EFFICIENCY AT WORK
Date: 25th to 26th October
Venue: Emperors Palace, Gauteng, South Africa
Contact: Christina den Heijer
Tel: +27 (0)18 294 7174
Cell: +27 (0) 82 334 0923
E-mail: cemanager at intekom.co.za
20TH WORLD ENERGY CONGRESS - THE ENERGY FUTURE IN AN INTERDEPENDENT
Venue: Rome, Italy
Date: 11 – 15 November
Contact: Arrivederci a Roma, Rome 2007 Organising Secretariat
Tel: +39 06 333 99 397
Fax: +39 06 333 99 401
E-mail: organisingsecretariat at rome2007.it
TPWIND FIRST GENERAL ASSEMBLY
Venue: Brussels, Belgium
Date: 13 – 14 November
E-mail: secretariat at windplatform.eu
4TH WEST AFRICAN POWER INDUSTRY CONVENTION (WAPIC)
Venue: Sheraton Hotel, Abuja, Nigeria
Date: 19 – 21 November
Contact: Nicole L. Smith, Conference Manager NAPIC 2007, Spintelligent
Tel: +27 21 700 3500
Fax: +27 21 700 3501
E-mail: nicole at spintelligent.com
Websites: www.spintelligent.com and www.esi-africa.com/events
THE 4TH EUROPEAN CONGRESS ON ECONOMICS AND MANAGEMENT OF ENERGY IN
Venue: Hotel Ipanema Porto, Porto, Portugal
Date: 27 – 30 November
Contact: Prof. Albino Reis, ECEMEI, Rua Gago Coutinho 185 – 187,
4435-034 Rio Tinto, Portugal
Tel: 351 22 973 4624 / 22 973 0747
Fax: 351 22 973 0746
UNITED NATIONS CLIMATE CHANGE CONFERENCE
Venue: Bali, Indonesia
Date: 3 – 14 December
EUROPEAN OFFSHORE WIND CONFERENCE (EOW2007)
Venue: Berlin, Germany
Date: 4 – 6 December
Contact: Jonathan Collings, EWEA
Tel: +32 2400 1056
E-mails: info at ewea.org and jonathan.collings at ewea.org
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