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DA: Ian Ollis: Address by DA’s Shadow Minister of Labour, on behalf of the DA's Shadow Minister of Energy, Gordon Mackay MP, during the budget vote debate on Energy, Parliament (19/05/2015)

DA: Ian Ollis: Address by DA’s Shadow Minister of Labour, on behalf of the DA's Shadow Minister of Energy, Gordon Mackay MP, during the budget vote debate on Energy, Parliament (19/05/2015)

19th May 2015

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Thank You House Chairman,

Our Country is in crisis.

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In the first 100 days of 2015, South Africa experienced approximately 33 days of blackouts. That sets a new record of shame for the country – exceeding our previous blackout total of 22 days in 2008.

While this might sound to some as a mere inconvenience, as it evidently does to acting Eskom CEO, Brian Molefe, load shedding is in fact delivering a death blow to our already faltering economy.

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According to analysts at Deutsche Bank the impact of load shedding has already shaved 0.4% off South Africa’s GDP in the first quarter alone. By the end of this year that figure could rise to 1,5%, leaving us with an anemic growth rate of just 1.9%.

Such a low economic growth rate is well below the 5% required by the NDP to reduce unemployment and meaningfully address the extreme poverty experienced by almost half our population.

Such a growth rate also makes a mockery of this government’s commitment to economic growth and radical economic transformation.

In light of this existential threat to our nation’s economy, it would be reasonable to expect decisive leadership on behalf of the President and his Ministers of Energy and Public Enterprises.

Instead House Chairperson, the nation has had to suffer the dithering and ineptitude of two clueless Ministers who have been forced to hand over aspects of their executive authority to the War Room – the clearest admission that both Ministers are completely out of their depth.

So clueless is the Honorable globe-trotting Tina Joematt-Petterson that more than a year into the job she has yet to update and refine the institutional framework for securing and expanding South Africa’s energy mix known as the Integrated Resource Plan (IRP).

A strange oversight considering the extent of our Energy crisis wouldn’t you agree House Chair?

The absence of the IRP can be compared to knowing you want to bake a cake but being completely clueless as to the necessary ingredients.

How might this be explained?

Well you see House Chair, an update does exist. It’s called the IRP 2013 Update. The Minister just doesn’t like what it says, namely that it’s harsh on nuclear, and so the Minister hasn’t ever bothered to submit the updated IRP to cabinet.

That the Department is rumored to be preparing a more palatable 2015 update should raise more than a few red flags – what standing will this document have considering the 2013 update was never formally rejected by cabinet?

Or does the Minister simply plan to “colour outside the lines” again as was her wont, and which was her downfall at Agriculture and Fisheries?

On energy sector reform the Minister’s performance is similarly abysmal.

However, to be fair, it can’t be easy to implement policy when the Party you belong to talks the National Development Plan but walks the National Democratic Revolution.

One such example is the shelving of the Independent Systems Market Operator Bill (ISMO), first approved by the Portfolio Committee on Energy in the 4th Parliament. Tasked with allowing private energy producers into the market to introduce some much needed competition, this Bill has become as elusive as Disney’s similarly named lost little fish Nemo – to the point where we can only but earnestly ask: Minister please Find ISMO.

ISMO is critical to the long-term alleviation of South Africa’s energy crisis as it will be instrumental in replacing the cronyism and cadre deployment of state monopoly Eskom with the competition of multiple independent public producers.

It will achieve this – all the while significantly boosting generating capacity and lowering electricity prices by ensuring that the public doesn’t pay for the capital costs of new build programmes – but only for the electricity they consume. (That’s not true for Medupi or Kusile and other similar builds.)

An area where the Minister has acted with remarkable speed has been the nuclear build programme. As already indicated, the Minister has already nixed the problematic IRP 2013 Update – essentially turning her back on her own Department’s recommendation that nuclear be postponed, or even avoided completely.

An announcement on the nuclear new build programme now seems imminent /has now been made, this despite a myriad of problematic facts.

None more damning perhaps than the findings of the International Atomic Energy Agency on South Africa’s Nuclear Preparedness which finds SA deficient in more than 40% of its assessment criteria, strongly indicating that South Africa is simply not ready to expand its nuclear capability safely.

Echoing these findings are a series of reports from the World Association of Nuclear Operators which found the capacity of management staff at Koeberg to be sub-optimal and identifying the cash crunch at Eskom as negatively impacting on long-term nuclear safety at SA’s sole nuclear power station.

This is to say nothing of the capacity constraints being experienced at the National Nuclear Regulator – a body that lacks the requisite skill to oversee any new build programme.

In light of these severe challenges, we in the DA find the Minister’s announcement to go ahead with the nuclear build programme to be downright confusing, premature and irresponsible.

Perhaps we should remind the Minister that ignoring the facts will not change the facts. The truth is simple. There simply is no real case for expanded nuclear capacity in South Africa.

House Chairperson, on the issue of tariff increases let me simply say this: the DA cannot and will not support above inflation tariff increases that will do nothing more than ravage our economy and ensure that electricity becomes even more unaffordable for the poor.

In closing let me be unequivocal – the DA is calling for nothing short of the rapid and progressive reform of the energy sector.

It is only through real reform that we can ensure that the sector delivers sustainable and reliable electricity; relieves the existing fiscal burden faced by the state; and finally, ensures that electricity is affordable and usable by the millions of poor who need its benefit most.

I thank you.

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