Southern African Faith Communities Environment Institute Liz McDaid – Cape Town
Jan 14, 2016
Presentation 23rd May 2012
• Context• Key issues:
– Transmission– Structure – Planning– Link with legislative amendments
Why is the ISMO Important?
• We have had favourable Government policy on private investment in power generation since the 1998 White Paper on Energy – but very little has been achieved.
• By 2012 private investment decisions account for less than 2% of new generation capacity.• Even if the entire REIPPPP (3,725MW) is included, private investment is still under 20%.
23-04-21Parliamentary Hearings on the ISMO
Bill3
2001 2004 2010 20122006
New generation investment decisions since 2001
Government targets 30%
Independent Power
Producers
Government approves Eskom investments:Camden RTS (1,520MW) Grootvlei RTS (1,200MW) Komati RTS (1,000MW)Medupi (4,800MW)Kusile (4,800 MW)Ingula (1,300 MW)
Cabinet decision. DOE to procure 1,000MW of OCGT peaker from IPPs. Eskom to build 1,000 MW
2003
Government approves additional
1,000MW of Eskom OCGT peaker plant
Eskom signs Power Purchase
Agreements (PPAs) with IPPs
under the MTPPP for
273MW
DOE announces Preferred
Bidders for 1,415 MW of
renewable IPPs
Eskom ~16,000 MW
273 MW1,000 MW
14,620 MW
1,000 MW
IPPs 273 MW
DoE Context
• Energy policy
• IEP
• Legislation ERA, NERA
• ISMO
• IRP
• Energy policy
• IRP
• ISMO
• Legislation ERA, NERA
• IEP
1998
2013
Want Have • Build DoE and maintain
transparent, accountable governance structure
• Diversify generation to increase renewables
• Transmission to match generation planning
• Tariffs to ensure ISMO focussed on EE/DSM and not only increasing supply
• Lack of DoE capability• Reliance on private sector
(vested interests)• Eskom failure to
implement renewables• Eskom transmission aligns
centralised generation• Eskom modelling
capability but lack of political will for EE/ DSM led IRP
Transmissioncurrent
ESKOM
ESKOM
Tx ISMO DX HOUSE
ISMO ?
ISMO ?
ESKOM Tx
Tx HOUSE
HOUSE
DX -eskom
DX
ISMO
ISMO
Independent regulation/ central planning
DOE :IEP integrated with IPAP, NDP, MDGs, CC policy etcDSM/EE/ SWH/ IEP/IRP
ISMO:Scheduling, procurementInput into IRP
NERSA:Regulate tariffsSet,Monitor and enforce license conditions
IRP
Eskom generation
IPPs
NERSA exemption
ISMO bill
DOE :IEP integrated with IPAP, NDP, MDGs, CC policy etcDSM/EE/ SWH/ IEP/ IRP
ISMO:Scheduling, procurementInput into IRP
NERSA:Regulate tariffsSet, Monitor and enforce license conditions
IRP
Eskom generation
IPPs
Increase parliamentary oversight
ERA/ NERA amendmentslack of accountability,
transparencyDOE :IEP integrated with IPAP, NDP, MDGs etcDSM/EE/ SWH/ IRP NERSA:
Regulate tariffsMonitor and enforce license conditions
ISMO:Scheduling, procurementInput into IRP
IRP(optional)
Decide who gets licences and determine tariffs and conditions
finalise plan procure generation
public participation in irp but irp can be ignoredPublic participation in tariff hearings but minister can dictate tariffs
ISMO
• Transmission – support transfer of physical assets
• ISMO as a not for profit state institution.
• Accountable, transparent governance – linkages with electricity act amendments
suggestions
• Transitional arrangements – include transmission in ISMO but put timeframe into transitional arrangements
• Ensure strong public participation in all procurement and planning functions
• Legislate to ensure accountable, transparent governance