Why government’s proposed new power company is a mad idea – DA

The Democratic Alliance (DA) says it unequivocally rejects statements attributed to the minister of mineral resources and energy, Gwede Mantashe, that the ANC Government is looking to set up an alternative electricity generation entity.

“This is utter madness,” said Kevin Mileham, DA shadow minister of mineral resources and energy. “Instead of making the South African electricity supply sector more competitive, Government is seeking to extend its monopoly over electricity generation,” he said.

Mantashe said that the government will talk to investors about funding a new electricity generating company ‘outside’ of Eskom. He said that this decision is being taken as a ‘security measure’ as Eskom struggles to provide power to the country.

“As Eskom is grappling with crises and problems, we must have a fail-safe option of getting energy,” he said at the African Mining Indaba in Cape Town on Monday (3 February).

“Particularly with the pressure to close a number of coal-generating power stations. We must start generating energy so that we go back to the comfortable days when we had a surplus (of energy).

“When we have that surplus of energy and competition in electricity generation, the price of electricity will be pushed down.”

Speaking on the sidelines of the conference, Mantashe told reporters that he had invited investors to either partner with the government or invest on their own in the creation of an alternative power generation entity.

“By this time next year, we hope we can say we have a site for energy generation outside of Eskom. We want people to sell energy through transmission. We want to take the pressure off of Eskom,” he said.

Mileham said that South Africa doesn’t need another state-controlled entity for electricity generation when there is a myriad of Independent Power Producers (IPPs) who are ready and willing to generate electricity to diversify South Africa’s energy mix, making it more reliable and cheaper.

“Furthermore, the minister’s comments that government is planning on revising Schedule 2 of the Electricity Regulation Act to enable mines to generate electricity for own use is an admission by the ANC that Eskom’s monopolistic stranglehold on the energy sector is simply not feasible,” he said.

The DA said it has long held the view that Schedule 2 be amended to allow for self-generation and municipal generation.

“While minister Mantashe’s comments indicate a step in the right direction it will by no means address the utility’s debt spiral, massive skills deficit, and deteriorated infrastructure.

“Minister Manatshe’s comments and commitments are all good and well but mean nothing if it fails to amount to any tangible change,” Mileham said.

“What South Africa needs is a competitive electricity generation sector to ensure energy security.”

The DA again called on Parliament to pass its Independent Electricity Management Operator private members Bill, which will allow all power producers to compete on a level playing field.

“The minister should also take the necessary steps to open the next bid window for Independent Power Producers as a matter of urgency.”

Read: Government wants to build a new power company – outside of Eskom

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Why government’s proposed new power company is a mad idea – DA