Published on Parliamentary Monitoring Group website, http://www.pmg.org.za.
Energy Portfolio Committee summary of Meeting.
Date of Meeting: 27 Mar(sic) 2013
Chairperson: Mr S Njikelana (ANC)
Summary:
The Department of Energy provided an overview of purpose, mandate, and logic of the Independent System and Market Operator Bill. ISMO would be an autonomous state owned company, mandated to assist in the development of Generation Resource Planning, buying of power from generators, as the Department was currently not well established to be procurers of energy so ISMO would be the dedicated procurer. Currently, the Department was the procurer of energy but trading took place within an Eskom function, and this was not an ideal structure. it would also deal with electricity trading at a wholesale level and system operations. Bias could not be eliminated unless an autonomous entity was set up to deal with these issues and the playing field was levelled. However, key policy and finance considerations still needed to be made by DoE as well as by government.
Independent Power Producers (IPPs) had not been forthcoming in significant volumes due to:
∙ Perceptions of conflict of interests in vertically integrated Eskom
∙ Perceptions that government was not serious about reforming the industry
∙ Perceptions about long-term viability of present electricity supply industry (ESI) structure
∙ Lack of clear policy specifically aimed at IPPs
∙ Lack of enabling legal/ regulatory framework to facilitate IPPs.
The Committee commented that what came up strongly in the public hearings was that there needed to be a long term vision for the electricity industry and its end state. More concrete work was needed in formulating relevant policy by the DoE to reach agreement on what the ultimate objectives in the energy industry were. DoE needed to revisit some of the issues which had failed in the past and re-cast a new framework. The Minister should therefore address the restructuring of the electricity sector as a matter of urgency, which included policy renewal, legislation, programmes and road map. It was suggested that DoE should hold another energy summit to address some of these issues.
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