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DA: Revoke Eskom's status
07/04/2008 17:18 - (SA)
Cape Town - Eskom's status as the country's sole buyer of electricity needs to be revoked to encourage independent power producers to enter the sector, the Democratic Alliance said in Cape Town on Monday.
The party also proposed that Eskom's transmission of electricity be unbundled from its generating division and transformed into a separate state-owned company, said spokesperson on minerals and energy Hendrik Schmidt.
"A prohibitive regulatory environment continues to keep independent power producers at bay, and will continue to do so unless steps are taken to dismantle Eskom's monopoly and ensure private sector participation," he said.
Despite Eskom's R350bn capital expenditure programme, its reserve margin - the difference between peak electricity use and installed capacity - was expected to decline from 5.90% at present to 3.50% in 2014, said Schmidt. Ideally it should be 15%.
By the time Eskom's first new coal-fired power plant was operational in 2012, the population and energy use would have "increased markedly", leaving Eskom once again lagging behind in electricity provision.
The utility's new open-cycle, diesel-fired turbines were also extremely expensive to operate and would add significantly to Eskom's operating costs.
The party proposed drawing up a timetable for reducing Eskom's market share, from generating 95% of the country's electricity at present, to a minimum of 35% by 2015. At the same time more independent producers should be encouraged to enter the liberalised market.
In 2000 a draft paper by the Minerals and Energy Department had proposed such a reduction, which the utility had lobbied against.
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