Talk of establishing a second electricity utility owned and operated by the government to “compete with Eskom” is of grave concern and only stands to exacerbate the power crisis in South Africa, says think tank the Free Market Foundation (FMF). The foundation added that the country’s load shedding crisis can be solved with a legislative change to a single word in law.
Section 8(1) of the Electricity Regulation Act provides that ‘no person may’ generate, distribute, transmit, or trade-in electricity without a licence.
The FMF argues that ‘no’ be replaced with ‘any’, meaning the nature of the provision will change entirely. If amended, it will provide that ‘any person may’ generate, distribute, transmit, or trade in electricity without a licence.
“South Africa’s rolling blackouts are caused in the final analysis by Eskom’s de facto monopoly in electricity generation – particularly generation that makes use of coal and nuclear sources of power. No independent power producer is authorised to make use of these sources, giving Eskom a significant leg up over its potential competitors.
“This monopoly must be brought to an end by, as a start, changing a single word in the Electricity Regulation Act,” the group said.
Electricity generation and distribution is technically complex, meaning it would not be safe or efficient for any person to simply plug into the grid and start feeding their home-produced power into it. While this might be true, the FMF is convinced that this problem is uniquely Eskom’s and Nersa’s, and potentially that of municipalities.
“These institutions ought to be begging ordinary South Africans to generate power and transmit it into the national grid,” said FMF executive committee member Martin van Staden.
“And as part of this ground-up initiative, they should be offering to – at their own cost – help South Africans set up these systems and feed excess electricity into the grid safely and efficiently.”
He said that such an approach would immediately start taking pressure off the beleaguered national power grid.
“In the longer term, independent power producers must be allowed to generate electricity from whatever source they can profitably, safely, cleanly, and efficiently utilise; whether coal, wind, nuclear, solar, or gas. South Africa is not in the luxurious position of being able to pick and choose its sources of electricity.”